ITB Partners – Management Consultants
Our Business is Your Success
Jim Weber has completed the first phase of a Turnaround Management Engagement for a client in Chapter 11 Reorganization.
His work revealed a clear path for a successful exit from Chapter 11 and a strategy to generate sustainable growth for the client. The next phase will include a detailed plan and the introduction of performance metrics.
For more information about ITB Partners and what we can do for you, contact Jim Weber at; Jim.Weber@itbpartners.com
By Sebastian van der Vegt, Untold Communications
Thanks to a booming economy, the start-up scene is thriving. Co-working places everywhere are full of entrepreneurs with innovative new ideas, taking advantage of a digital economy that is providing unparalleled opportunities, the likes of which the world has never seen before.
Yet, statistics remind us of a sobering number. Among start-ups that manage to attract outside funding, around 70% never make a profit. Over half of all companies don’t even make it past their 5th year.
So how do you beat these miserable odds?
The answer is that it’s not simple. You need thick skin, a strong mind, a lot of determination and not just a little bit of luck. But you can greatly increase your odds by creating an awesome communications strategy and narrative.
By strategy, I simply mean the purposeful use of communication to fulfill your mission – the right message/content, to the right target audience, at the right time using the correct medium/messenger. Done right, it will inform investment decisions, win over potential clients and investors, and position a company for long-term growth.
Sounds like a no-brainer, but it’s not. Most start-ups have a business plan, a financial plan and even a basic marketing plan to establish an online presence. Very few have a sound communications strategy mapped out. In fact, among the start-ups that I’ve come across, I’ve yet to find one that had thought about this.
Some start-ups do decide they need good ‘PR’, usually after about six months to a year into their existence, but they often do it for the wrong reasons, or with little or no strategy.
Just last week, a prospective client asked me if I knew any journalists. “Of course, I do” I answered, “I know plenty,” but explained to him that it’s really the wrong question – see point 5 below.
Initially, most small companies also rely on communications and marketing themselves. After all, they can write, sell and know their product better than anyone. Thanks to a wide variety of new digital tools, everyone also has access to inexpensive solutions that help you build a website, post blogs, send mass emails, or do basic marketing.
Being an entrepreneur naturally means they should take advantage of these new tools. But there is a reason that large, successful companies spend millions on communications and marketing, and smaller companies would do well to adopt some of these same lessons.
So here are 6 of my favorite lessons that I learned while working at a fortune 500 company, that could benefit any start-up:
Most start-ups will have been advised to start with why (thanks to Simon Sinek). It’s a good start, and better than only talking about what you do, but it’s not enough.
The why is only part of the ‘context’ – which should include why you exist, what problem you are solving for your customers, what gives you the authority, and, implicitly, ‘who’ you are targeting.
Tell the story of how and why you were founded. If you can, try to make an emotional connection in the delivery, it will make for an audience that is a lot more engaged. Extra bonus point for telling the story of how you are helping your customers achieve success.
Any idea worth its time should be told in a natural way, in plain English, in less than 15 seconds. It’s more difficult than you think. For most, this will mean forgetting all the technical language they are accustomed to. It also means forgetting that 100 other companies make similar claims.
Too many start-ups try to differentiate themselves unnecessarily through complex wording or technical capabilities to prove that they are special. My advice: differentiate yourself through the way you fulfill a need and address a problem for a segment of the market, in a way that a prospective customer would easily understand.
A great business plan will benefit enormously from a great communications strategy.
That means that if you need to find software engineers to power your start-up, you need a strategy to boost your brand with the local university. Go give a lecture, a seminar, or sponsor a hack-a-thon.
It means that if you’re trying to get teachers to use your product in the classroom, you need the right language, the right content and the right medium to reach them. Partner with a teaching website or school district to give your company message.
It means that if you’re taking on a dominant competitor, be provocative – you don’t use ‘safe’ language that a multinational would use. Stand out by differentiation, and by not being afraid to ruffle some feathers.
I could go on, but you get the point.
While a company ‘boilerplate’ with standard messaging is a great tool to have, you’ll need to adjust your messaging depending on the audience. One size does not fit all.
Building on point 3, identify your top 5 stakeholder groups that are critical to your growth and write down the key message points and language you would use to communicate and win over each audience. Once you’ve done that, you can identify the channels/materials in which you can best reach these groups.
This again sounds like a no-brainer, but the discipline of this exercise will help everyone stay on message.
Many start-ups will look for a silver PR bullet. A write-up in a newspaper, a listing on a top 100 of hot start-ups, a mention on TV. Great – this may work for you if your story is there and you have something new or interesting.
For most start-ups, their story is not (yet) of interest to receive what we call ‘earned’ media, and they are much better off building their brand in the ‘owned’ space. This means writing blogs in a medium that you own; it means building a kick-ass website and content across different social channels; it means writing a regular newsletter and industry content for trade magazines.
Often overlooked is physical space – most companies own assets. You can also consider ‘shared’ media; using your content in partner owned channels can be a win-win.
Point is, start-ups have many options other than selling their story to journalists or buying advertising.
Audiences smell bull-sX#! from a mile away. In a world where we are bombarded with information and polished content, presenting the real, authentic you is a competitive advantage. Make sure you tell your story in a way that is compelling, with proof points that are real and relatable. Also, remember to include a vision that is purposeful and that has meaning.
The company vision is where communications strategy and company strategy really meet. Why does your company exist? What’s the ultimate goal?
The most obvious and easy answer is, of course, to sell more products & services, but try to dig one level deeper to think in terms of benefits to society. It will not only help focus your company, but it will help motivate your employees, attract investors and ultimately help improve your sales.
After spending years working with some of the biggest brands in the world, I love helping smaller companies achieve their goals and vision. It’s one of most rewarding aspects of my new role after leaving the corporate world behind.
That’s not to say they don’t have their own set of challenges; many don’t have revenue yet, lack good time management, have strong opinions, operate on limited budgets, and present solutions in search of a problem.
Yet, despite all of this they’re still my favorite clients (with apologies to my corporate clients). Quite simply, having a great communications strategy for start-ups can make the difference between failure or success – it’s that critical.
On my next blog, I’ll focus on the basic difference between good and great marketing. Until then, I look forward to your feedback.
Sebastian Van Der Vegt is the Managing Director of Untold Communications in Atlanta A native of the Netherlands, van der Vegt has lived in Canada, Brazil, Switzerland, and Turkey before settling down in the U.S. He has a degree in Psychology and has taught strategic communications at leading business schools. For more information, please contact him at Sebastian@untoldstrategies.com.
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Recently, a number of info-graphics comparing the habits of successful people to those that aren’t, landed on my Pinterest feed. A few of their points spoke to reading as opposed to watching television and a zest for continual learning as significant differentiating factors. Although I couldn’t disagree, I didn’t pay it much attention until a recent conversation with my friend, Faith. She was excited to tell me that she had just received a tuition reimbursement check from her employer. As she is working to complete a college degree, she is making good use of her company’s education assistance program.
She continued, saying that she valued that benefit and planned to take full advantage of the program. I agreed with her thinking and complimented her employer for offering the benefit. However, I lamented that too many employers have scaled back on their training programs and lack cultures that reinforce the benefits of life-long learning. Naturally, we agreed that it was a topic I needed to explore further.
A few days later, Dennis, an alumni buddy, and I were enjoying our cigars and adult beverages, talking about cars. He told me how another friend, John, got him interested in doing his own car repairs. John showed Dennis how to research the issue, find the right parts, and make the repairs. Over time, he gained confidence as he accumulated experience. He has resolved many maintenance issues, like replacing brake pads and rotors, saving a lot of money. This is a skill set he developed with a little encouragement from a friend. I know that he takes pride in this ability which gives him great satisfaction.
On the other hand, I am reminded of a colleague who had no interest in learning how to use a Personal Computer. It was a time when PCs were moving rapidly into the workplace but before the introduction of laptops. He told me, “why should I know how to use a PC, that’s why I have an assistant.” The irony is that the PC replaced the administrative assistant, except for the more senior level staff. I often wonder how long it took him to catch up to his peers?
Much has been learned about the brain that supports the value of lifelong learning. A healthy body and sound mind is the key to a long and happy life. The brain is like a muscle, either use it or lose it! Learning is like any other skill that requires practice. With practice one masters the subject. Lifelong learning or continual learning is an attitude, a mindset. If one believes in the importance of learning new information, or skills they will make the effort to pursue that course. If not, stagnation may develop, putting one’s career in jeopardy. As a commercial enterprise is a collection of people, an organization, it follows that it would benefit from continual learning. Building a learning culture is a viable strategy to keep employees interested and engaged, supporting innovation and productivity improvements. A learning culture creates competitive advantage.
I am a big fan of YouTube. The variety of their videos seems to be endless. Among others, I have viewed programs to improve my efficiency with Office 365, manage my websites, develop landing pages to build my contact database, and facilitate greater exposure for my brand. My time on YouTube has increased my productivity in so many areas that I’ve become an addict. The point is, YouTube is a free service. It’s a platform for brands to build customer loyalty by training to maximize the utility of their products. Tuning into YouTube seems to be a ‘no-brainer,’ for individual learners, and for employers.
It is all too easy for professionals to get into a rut, going on autopilot as it were, as the vicissitudes of daily life take president. Companies are no different. They develop successful business models and continue executing that formula, sometimes without noticing the changes happening around them. Brands that maintain long term relevance, do so by listening to their customers. They Learn. The best brands know that their employees are their customers too.
Creating a learning culture really isn’t difficult. One small change can spark a virtuous cycle of change. Providing education benefits to employees is a good step toward creating a continuous learning culture. At the end of the day, however, it’s the responsibility of leadership to build a culture for success.
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By Antony Francis antony.francis@lakehillpartners.com
April 11, 2109
About 20 years ago, I produced a diagram showing that there are 3 interconnected supply chains: The Physical, the Informational and the Financial. All three, of course, interconnected and feeding off each other.
This interconnection is important. The quicker you get information into the transaction set from physical activities, the quicker you get an ASN and the quicker you get a POD and can invoice your customer. Time is money.
There was also much talk about Global Inventory Visibility. We dreamt of the ability to know what was inside each box on a pallet, but the private batch processed networks and lack of internet-driven transactions made this a pipe dream. I remember discussing with a client in the late ’90s whether we could know within seconds at the UK HQ whether an item had been sold in a store in Tokyo and immediately pulse out a replenishment shipment that same day. Of course, today we would say: “no brainer, we can!”; back then, the lack of inter-connected systems and batch processing of file exchanges made this a dream scenario.
So, where does Blockchain come into the picture? Firstly, it is important to define what we mean by Blockchain. There are two pieces to Blockchain when it relates to supply chains. One is the distributed on-line ledger that enables one to track the work-flow process from PO to an approved A/P transaction on the buy-side and a sales invoice into A/R on the sell side.
A recent article described Blockchain as an open, distributed ledger that can record transactions between two parties efficiently, securely and in a verifiable and permanent way.
Some of the key elements of Blockchain were explained by Iansiti and Lakhani in a recent Harvard Business Review piece:
So, let’s focus on the transactional work-flow process side initially, the Distributed Ledger. Transparency is becoming increasingly important for retailers; more and more people want to know how and where goods are made. This goes hand in hand with ethics and sustainability. For retailers to understand if they are operating in the most sustainable way, if the products they buy are made in the factory they believe it to be, they need to know information about the supply chain. Blockchain can help with this type of data tracking. When transactions occur along the supply chain, a digital record occurs at each step, thus providing a full audit trail.
Consider how business works today. Keeping ongoing records of transactions is a core and necessary function of any business. Those records track past actions and performance and guide planning for the future. They must, however, operate as an event manager and keep a fully detailed history of who made changes and when. Many organizations have no master ledger of all their activities; instead, records are distributed across internal units and functions. The problem is reconciling transactions across individual and private ledgers takes a lot of time and is prone to error.
In a blockchain system, the ledger is replicated in many identical databases, each hosted and maintained by an interested party. When changes are entered in one copy, all the other copies are simultaneously updated. So as transactions occur, records of the value and assets exchanged are permanently entered in all ledgers. There is no need for third-party intermediaries to verify or transfer ownership.
“Smart contracts” may be the most transformative blockchain application. These automate transaction approvals as negotiated conditions are met. For example, a smart contract might send a payment to a supplier as soon as a shipment is delivered, and the 3-way match is completed. If the product had a GPS beacon, it would automatically log a location update that, in turn, would trigger receiving data. Some IoT devices can even record if there was a change in temperature or shock damage.
When the Internet cloud emerged and started achieving widespread use, technologies like XML were predicted to replace EDI. Rumors of the death of EDI have been greatly exaggerated. The short answer is that EDI works. Companies have invested in it over many years. It may well have been moderately painful to get it up and running, but now it works. Even today, a certain set of core EDI messages (around the buy-sell-ship-pay transaction lifecycle) have and continue to enjoy widespread adoption and are almost universally required by major retailers and manufacturers. It is very prevalent in the Freight Forwarder community. The good news is that Blockchain feeds of all of these data sources.
Consider the situation today with B2B networks: Suppose a given supply chain process involves a buyer, seller, and third-party logistics provider. Today, information flows between these entities are typically one-way and point-to-point, either through EDI or XML-based messages or other mechanisms, such as API-based interactions. It is often the case that a buyer and seller might exchange certain messages, but an intermediary logistics service provider doesn’t see those messages. Or a seller and logistics provider might exchange certain messages not exchanged with the buyer. Events representing the exchange of B2B documents, for example, could be recorded on a blockchain and made visible to all participants in a supply chain process. In addition, blockchain could record supplemental events, such as those provided by IoT and smart devices, providing a more detailed synthesized record of all information flows. The actual exchange of B2B documents that occurs today can continue to operate as is, and a blockchain could simply provide a shared visibility “overlay.”
Such platforms will save the global shipping industry billions of dollars a year by replacing the current EDI and paper-based systems, which can leave containers in receiving yards for weeks. What if tariff codes, classification data, origin information, import and export certificates, customs values, clearance status, and all further required information about goods were available for all involved parties to access and complete through one unique ID, anywhere and anytime, and protected against manipulation thus delivering the same significance as certificates, seals, and signatures?
Permissioning inside blockchain gives you the confidence that you can control your information and grant access only to those you want to grant access to.
Lakehill Partners has a long history of systems integration and business process redesign. Let us help you manage the way forward.
For more information on this subject, please contact Antony Francis at antony.francis@lakehillpartners.com.
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I swear, I must have been transported into an alternate Universe this week, where I was an actor in a sitcom. Something resembling “I love Lucy.” You know how sitcoms are written, there is always the main plot with a few sub-plots working. By the end of the show, all the plots converge on one common theme. Yes, I was living through a sitcom episode in my alternate Universe.
It began a week ago Friday evening when my wife’s car wouldn’t start. She was at a job site which required the car to be towed to the nearest Dealer. It sat there until Monday when the Service Department opened.
As she is a residential contractor, she rented a car to keep her projects on track. Unfortunately, she fell in love with the rental and decided it was time for a new car. It must have been the electronics package. Naturally, I protested! Her car is ten years old but hasn’t even cracked 100,000 miles. In fact, it is very reliable and has had few problems. From my perspective, the car isn’t even broken in. We have been married for 43 years, so I knew how this would unfold. My best logic would be deployed to no avail. I could only hope to minimize my losses by working at the margins. By the beginning of the week, we weren’t speaking much. Houston, we have a problem!
I realize that most purchases are made on emotion and later justified by tortured logic. Surprisingly, I have come to believe that is not limited to the consumer world. All too often I have seen that scenario play out in the business world. This is was our sub-plot.
Monday, I met with a senior consultant for the local office of a National outplacement firm. He invited me to explore an opportunity to collaborate. I told him how we help our members understand and adapt to the new employment paradigm. I explained my view that we are all ‘free agents’ in a dynamic environment. Professionals will move between W-2 and 1099 status as tenures become shorter and shorter. We have little control over the employment situation created by the digital transformation of the economy. He invited me back to speak to his clients.
Tuesday, I moderated the monthly meeting of the BENG Atlanta Chapter. Our featured speaker, Erica McCurdy, a Master Coach, and ITB Partner facilitated a discussion entitled “Not every problem has a solution.” The gist of her message was don’t confuse situations with problems. There is a difference. A situation is a state of being; a confluence of events beyond one’s control. Situations require one to adapt whereas problems require solutions. Was it merely a coincidence that I was hearing this message from Erica?
It’s useful to know the difference between problems and situations to focus your energy on things you can change. If you try to change things that cannot be changed, your state of mind will suffer. By resolving things that can be changed, you will reduce stress and improve your life, especially if you eliminate unproductive effort.
Successful people view problems as opportunities to grow, improve, and adapt. For them, problems are a part of life. Their positive attitude toward problem-solving improves their outcomes. Experience makes future events easier to traverse. We should accept problems as a normal, unavoidable condition of life.
I spent the rest of the week evaluating situations and problems. As I dissected what I assumed were problems, I realized that some were situations. In these cases, I found opportunities to employ my leadership skills.
This week unfolded within the context of my wife’s desire for a new car. I had a situation. She had a problem. When she sets her mind on a course of action, I become a spectator. During our marriage, I can’t remember winning a major battle, but I’ve had success at the margins. Guys, I think you know what I mean. While I became more obstinate, digging in my heals, she negotiated a better deal. I lost, of course. I knew I would. My life was imitating art. Today, she is very happy with her new car. I live on to fight another day.
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I enjoyed another productive week. Monday, I attended a cocktail/dinner reception for the Dean of the College of Business for my University. This reception included a small intimate group of staff and alumni. It was fun to catch up with old friends and make some new ones. I spent Tuesday evening with four alumni volunteers discussing ways to move the Atlanta chapter forward. Wednesday, I went Full Hemingway working at a cigar bar. I call it ‘Full Hemingway’ as I imagine Earnest at work, alternating between puffing on his cigar and sipping scotch. Working with a cigar in one hand and a Guinness in the other is my favorite way to read a contract, or to write my blog posts. Also during the week, I had productive discussions about potential assignments and signed a new consultant. Thursday was a bit of a hiccup, however.
At this point in my career, my favorite role is that of a mentor and coach. This style works well for me when interacting with alumni volunteers as well as leading my consulting group. I cannot say it’s always easy as my nature is that of an action oriented, ‘get-it-done-now’ kind of guy. Fortunately, I’m usually able to resist that urge. Sometimes, my coaching style will resemble playing a hand of Poker. Especially if someone tries to dump their perceived problem on me. An issue has been building. It came to a head this week. So, I moved into Poker mode.
It began a couple of months ago when two of my practice group leaders recommended a significant change in strategy for our consulting group. Their recommendation was based on personal beliefs, not data. Without speaking to the merits of their idea, their timing was perfect. We were beginning our strategic review and I needed someone to drive the process. Besides, the analysis would determine the viability of their thinking or not. As they had not presented a well-thought out strategy, and plan, I felt satisfaction by handing the issue back to them to properly evaluate.
Thursday, our leadership team reviewed the findings of the strategic analysis and discussed recommendations for our 2019 plan. It was noteworthy that our clients expressed almost no interest in the concept floated by my colleagues months ago. The data had spoken. My colleagues were silent on the issue so I let it die a natural death.
However, another more important issue had been revealed. I was not surprised by the finding, but it still needed further clarification. I’ve had enough expertise with marketing research to know that a customer’s stated need is often a symptom of some other issue. Reacting to a perceived need without additional analysis can become an expensive waste of resources. However, one of the two practice leaders who floated the other strategic change became agitated that we were not addressing this perceived need to his satisfaction. I did not respond to his comment, nor did anyone else. His outburst gave me pause, however.
Later, in a conversation with this colleague, I asked if he was interested in analyzing the issue; to recommend a course of action and create a plan. I asked if he would like to take the lead on this project. In poker terms, I just called his bluff. His response was, “gee, that’s a lot of work. What’s in it for me?” I thanked him for his honesty and ended the conversation. He had told me everything I needed to know. I realized that I have a coaching issue to address.
Early in my career, I was coached to bring my boss solutions, not problems. That advice served me well as I’ve built my career by analyzing gaps in performance; evaluating alternative solutions; creating plans to realize the optimal solutions and executing those plans. In my world, this is the fundamental role of a professional. This is so natural to me that I feel as if I’m interacting with an alien if I encounter someone who doesn’t live by this concept. If you want to be a professional bring me solutions, not problems.
My friend Faith thought the timing of this topic was interesting as it reminded her of a conversation, she’d had this week. She told me that “clients are looking for the value that solutions generate. It is hard to unseat an incumbent when they have returned value year after year.”
Executives have a lot on their plate. Their time is precious. Spending time listening to someone complain without offering a solution is a waste of time and it’s irritating. In fact, if this behavior persists, it will eventually end one’s
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I give a lot of consideration to the way I use my time. Often, these assessments lead to significant adjustments. A decision this week reminded me of a similar situation a decade ago.
In 2003 I joined a club to conduct business and entertain clients and prospects. This club provided excellent food and beverage service to accommodate breakfast and luncheon meetings. It had enough rooms of varied sizes for private meetings. Because of its commanding view from the top floor of a high-rise office building, it was a popular place for many events, including weddings, and holiday parties. It was a good location for political functions. I made good use of the club’s amenities, especially during the holidays. I hosted an Annual Company Meeting and facilitated the use of the club for a major alumni event and a few smaller gatherings. My middle daughter chose the club for her wedding and reception. The club was good about giving back to its members as well, hosting a free members appreciation gala during the holiday season. It wasn’t the most convenient location, but I met a lot of great people and significantly improved my networking skills.
Among the members, I came to know, were a few cigar aficionados. Although the club was a non-smoking venue, there was a cigar bar in an adjacent hotel. One thing led to another, and eventually, we formed a poker group. We met once a month, enjoying a cigar and a beer or two before the game. Poker night was not as much about poker as it was camaraderie among friends. Fifteen years later, the game is still going. It is still less about the poker and more about spending time with friends. Only two of us are left from the original group, as members have come and gone.
Toward the end of 2008, as the economy slipped into recession, I chose not to renew my membership with the club. The recession put a lot of things into perspective. A crisis will do that. I came to realize that I was not meeting the type of people I needed to build my business. Additionally, the location caused me to spend too much time traveling to and from the club. It wasn’t necessarily a happy decision as I was very fond of the club. I had made some lasting friendships and had gained the respect of the management and staff. Sadly, continued membership at the club was not aligned with my objectives. I realized the need to refocus my efforts as the economy became more unstable and unpredictable. It wasn’t easy leaving the club, but it was necessary.
I had a similar epiphany Friday morning conducting a very successful ITB Partners meeting. I was with twenty highly accomplished professionals, with two or three more participating by telephone. We were discussing plans for a strategic review for our company. It was quite exhilarating. I’ve always enjoyed leading bright people through the process of chartering business strategy. You could say that it is in my DNA. I was in the zone.
On the other hand, I’ve come to realize that I no longer have the same level of anticipation for poker night. In fact, I’ve noticed a certain level of trepidation. I know it’s pointless to continue playing if it isn’t enjoyable. I have far too many other responsibilities to occupy my time.
When I compared Friday’s meeting to the monthly poker game, the implication was clear. The thrill is gone. I have been going through the motions. It is no longer a productive use of my time, even for recreation. It’s time to move on. My decision won’t affect the relationships I have with close friends in the group which are solid.
It’s important to reassess from time to time. Successful companies have a process to review their annual progress against plans, adjusting as needed. As individuals, we make New Year’s Resolutions at the beginning of each year. Many of those resolutions are never achieved, however, we understand their intrinsic value. I find it useful to assess the way I use my time in connection with my goals and objectives. I think you will too.
Jim Weber, Managing Partner
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On November 2nd, the Friday before the midterm elections, the U.S. Department of Labor presented its initial report for October. The report showed that employment increased by 250,000, a 1.7% year-over-year improvement.
On Tuesday, November 6, The Bureau of Labor Statistics released its Job Openings and Labor Turnover Summary,
The report reflected an unemployment of 3.7% and a Labor Force Participation Rate (LFPR) of 62.9%. Job Openings were reported at 7.0 million, down from 7.3 million the prior month.
The bulk of October’s hiring came from three major industry segments; healthcare and social assistance added 46,700 jobs, leisure and hospitality added 42,000 jobs, and manufacturing added 32,000 jobs. The only sector to record a decline was the education sector which dropped 2,500 jobs. On a year over year basis, the manufacturing sector increased employment by 9.4%, construction employment increased by 4.7%, and transportation/warehousing increased 3.5%. The information sector lost a half a point.
The September employment figure was revised downward from 134,000 to 118,000, whereas the August figure was revised upward from 270,00 to 286,000. During the third quarter, GDP increased by 3.5% as compared to 4.2% in the second quarter. The consensus is that the economy is on track for a full year GDP increase of 3%.
The economy remains strong, without clear evidence of slowing. We have seen some wage increases which supports the belief that the labor market is tightening. I find it interesting that employers are trying to fill 7 million jobs, and The Labor Force Participation Rate (LFPR) is at a historic low. In fact, the ratio of people looking for work to jobs available is .9. In other words, for every 100 available jobs, 90 people are actively seeking employment. The U.S. labor market has enough slack to accommodate the demand for labor, or so it seems. So, why haven’t those jobs been filled by the people looking for work? There is an obvious disconnect between the demand for labor, unemployment, and the LFPR. Call it a Demand-Unemployment-LFPR Paradox.
FIVE REASONS FOR THIS PARADOX.
Lack of appropriate skills
Structural unemployment
Disability and chronic illnesses
Opioid epidemic
Baby boomers are retiring
I find these reasons interesting if not compelling. I can understand the effect of disability and chronic illness, especially high blood pressure and diabetes. The effect on the labor pool includes the afflicted and their caregivers. Personally, I would include people who are chronically addicted to drugs, including opioids, as disabled at least temporarily. These issues require Public Policy initiatives at the Federal and State levels.
About “lack of appropriate skills,” the issue is clear. If an employer is looking to hire software engineers, it is unlikely that a middle-aged, displaced factory worker would be a viable candidate. This is an obvious example however, it doesn’t explain the bulk of the paradox.
I find the issue of retiring Baby Boomers most interesting as there are conflicting signals regarding their situation. The first is that we are healthier than previous generations and highly motivated to contribute. Additionally, I continue to hear reports from financial planners that the average baby boomer has somewhere between $10,000 and $50,000 in savings, hardly enough to support retirement. The effects of divorce and unemployment have diminished the financial security for many Baby Boomers. Admittedly, many are leaving the corporate world and government service with pensions. However, Baby Boomers I encounter are not ready to retire even if they have the financial resources to do so.
Structural Unemployment is a euphemism for age discrimination, whether real or perceived. In some cases, it may be due to a perceived lack of relevant skills. In other situations, it may be due to salary requirements. The lack of relevant skills is a perception that seniors are not as savvy using technology as younger workers. I find this questionable. On the other hand, seniors probably have expectations for a greater wage than the market may support. A good example is the demand to raise the minimum wage by displaced workers who were forced to find employment in Quick Service Restaurants during the recession. Hiring older workers carries risk, including health and vitality, and EEO complaints. Of all the reasons to be disconnected from the workforce, I find this to be the easiest to overcome. As the economy continues to restructure itself to accommodate the digital revolution, employers are becoming more comfortable employing freelancers, or outsourcing job functions. This creates tremendous opportunities for anyone with relevant skills, like Baby Boomers, to create their own employment opportunities.
I believe it is a useful goal to create an economy that can employ everyone that wants to work. I believe in policies that provide incentives for people to work. Our current economic environment has challenges and opportunities. The clearest opportunity is for Baby Boomers and those affected by Structural Unemployment to turn perceived weaknesses into strengths and embrace the digital economy. Corporations may take the lead in addressing the skills gap by providing training and development programs. Public Health Policy must become more robust to address chronic illness and addiction. It occurs to me that the Labor Paradox can be bridged, but it will take significant effort.
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Lately, it seems I spend much of my time reflecting on my career. No, I am not going through a midlife crisis, I’ve passed that stage. I believe it’s due to the coaching and mentoring time I spend with my consultants. It must be a natural result of my leadership responsibilities. As I work with my consultants, listening to their issues, my mind unlocks memories of similar situations I experienced. I’m certain this is not uncommon as it is just the way our minds work. Happily, I am pleased to be able still, to tap into that reservoir of knowledge. The added benefit is that it helps me empathize with these folks. I have learned a great amount of useful information during my career, and I am happy to share that learning with my consultants.
The good news is that I’m still learning. I am becoming more productive by developing new skill sets and sharpening existing skills. Especially my listening skills. It’s not just understanding what is being said, but more importantly, its about picking up cues to understand what’s not said. I have learned that the seminal issue is often blurred, obscured by biases and faulty self-talk. Empathy is an added benefit of improving my listening skills which help to better understand the needs of my team.
I’ve learned that coaching is more effective if I can work around one’s logic filters. If the message can be internalized at an emotional level there’s greater likelihood that one will act on the message. Turning experience into stories is an effective way to create a lasting impression. Stories carry the weight of credibility if they come from one’s personal experience. My advice is supported by authenticity and the passion I display reliving a personal experience. I consider it “the concept of connecting with impact.” My natural predisposition is to use humor whenever possible, especially self-deprecating humor.
I have the pleasure of working with highly-skilled professionals who have established impressive careers. They have all the skills necessary to become successful consultants even if they don’t recognize the full potential of those skills. My mission is to train and motivate them to become effective freelancers by developing the skills they need now. My strategy is to turn my experience, the good, the bad, and the ugly, into stories to help them learn how to achieve their goals.
Many in our group are accomplished independent consultants with ten to twenty years of experience. They’re a tremendous resource and a big help to me. However, we’re attracting new members who left their corporate careers to become freelancers. They are highly-skilled, highly-competent professionals, that are unclear on the requirements to build their businesses. Naturally, I spend a lot of time coaching these folks on prospecting for gigs and closing deals. The objective is to position them as “Thought Leaders,” or “Subject Matter Experts.” The skills needed to become recognized as a Thought Leader include:
Some of these skills come naturally to our new consultants. Others are adept in each of these areas. But some need a lot more help in one or more of these skill-sets. I remember when I made my exit from the corporate world. My public speaking skills were above average, however, my networking and writing skills weren’t ready for prime time. That is not to say they were poor, but they weren’t polished enough to be an asset.
Now, my role is to start new members on the right path. It isn’t easy for some, so I encourage them to take small steps. Presenting at our monthly Members Meeting is an important step supported by a friendly room. Likewise, we have a supportive team to help one gain the skills to write interesting blog posts. These small steps help one to gain experience and confidence. Small steps lead to longer strides and then to leaps and bounds. Appealing to one’s emotional hot-button is the trigger I use to help them make that first small step.
Thank you for visiting our blog.
I hope you enjoyed our point of view and would like to receive regular posts directly to your email inbox. Toward this end, put your contact information on my mailing list.
Your feedback helps me continue to publish articles that you want to read. Your input is important to me so; please leave a comment.
Jim Weber, Managing Partner
ITB PARTNERS