Author Archives: Bruce Stewart

About Bruce Stewart

A philosophically minded politically interested fellow with more opinions than is probably good for him.

Are you just starting out in this strange time?

The times are strange. Your university, college, or school, your parents, and those you take advice from know one world — but you live in another.

The world they know is one of relentless, unending inflation. One where racking up debt to study, then to “get on the real estate ladder”, was the right thing to do.

But you live in a world of deflation. Debt is your enemy, because money is worth more every day, and debt parts harder to repay.

So here’s the necessary steps to prosper in the world you actually live in.

First, if you owe, make it go. Every penny of debt must be retired as fast as you can. Live cheaply, plough as much as you can to take that burden off your neck.

Second, be very cautious around buying real estate. It will be illiquid when you want to sell, and the mortgage and condo fees will choke you over time. Landlords will try to churn units to raise rents (they, too, are being choked by their mortgages) so ride it out. The less you owe, the easier it’ll go.

You can buy when and if you see a period of stability for yourself — if you do, accelerate your payments and get out from under as fast as you can, and don’t pay for space you don’t need. Four child families were comfortably raised in 900 sq ft bungalows sixty years ago. That’s a lot cheaper than the 3,000+ considered “essential” for a family that large today.

Third, be employed. If the best you can get is flipping burgers or pouring coffees, accept it. some income is better than none. A year later, at least your résumé says you don’t quit.

Fourth, consider the pressure to keep going on — Master’s, Doctorates, certificates galore — with a cynical eye. These are the remaining profit centres in higher education (which hires sessional instructors now rather than tenure-track staff). What do you get out of it? For a solid answer, go. For speculation, avoid it: it’ll still be there in a few years and they’ll take you part-time to get your money when you go back (if you do).

Accept that no degree comes with a guarantee of employment. No, not even engineering, medicine, or the like. (If you’re in high school and reading this, study what motivates you, and pay cash. Seven years (study one, work the next) to do a Bachelor’s degree will become “normal”. Working until you’re 21, then going, not only let’s you go with cash, it brings you in as a mature student — one they’ll back off a lot of rules for.

This period is likely to last most of your life. You may do twenty different things before you finally stop working, as employers downsize or frat merged out of existence. Be adaptable — and always be working.

Are You Ready for a Strange Time?

A strange time. What, on earth, is a “strange time”, and why might you have to prepare, to be ready, for it?

The past few months have given us clues, if we only bother to look for them.

So let’s look, shall we, and think about what it might all mean.

This is, after all, about doing personal due diligence. Such looking is a diligent person’s stock in trade.

A society deflating around us

Deflation is far more than just falling prices, although that is how it is often portrayed. It’s also far more than something central bankers get all panicked over, doing “whatever it takes” to fight.

Deflation is the shrinking of the economy. In particular, money increases in value. Labour is less valuable. So, too, is debt – quite a bit less valuable, in fact.

A deflating economy takes real money – cash in hand – and raises its value. Technological improvements (whether those are physical or programmed technology, or better processes, or better ideas) increase productivity. This shows up as needing less people to do the same work. That, in turn, shows up to you as job risk.

Since the 1990s at the very least – it was then that the first web sites went online, that most people started to buy computers, and that electronic communications (starting with email and text messages) became a part of our lives – technology has been wiping out jobs left, right, and centre.

This hasn’t shown up in an obvious fashion. The jobs I held in the 1970s were still there in the 1990s. They don’t exist at all today in the 2010s. But new jobs have replaced them, right?

Well, not exactly. Toronto, where I live, is a prosperous city on the surface. But it has over ten percent unemployment. Half its citizens only hold part-time jobs – often, two or three of them, none with benefits, none paying well – or are “consultants” scratching out a living from one project to the next.

50% with no security, 10% with no anything – only 40% have some degree of security. That’s not prosperous.

But, like Japan two and a half decades into a deflation, appearances differ from reality. Japan has lost its lifetime employment guarantees during these years. Only the fact that the Japanese population is falling has stopped mass unemployment from becoming a reality (the way it is in Europe in most of the countries along the Mediterranean). But many Japanese now scratch out a living from project to project or hold part-time positions without benefits, rather than the lifetime positions they used to hold.

Canada and the United States faced their last long deflation after the American Civil War and after Canadian Confederation. The 1870s, 1880s, and 1890s were decades of deflation. Look at the progress: streetcar networks in cities, electricity, the phonograph, the projector, the automobile, asphalt and macadam (to pave roads and put the mud at bay), street lighting, a web of continental railways – it’s a long list. But for a quarter century jobs were hard to find, self-employment wasn’t rewarding in most cases, people on farms (and doctors) lived near starvation most of the time.

The next few years will see this deflation – that began two decades ago – erupt into full view. The central banks will, either by choice (as with the Swiss National Bank this month, or Iceland’s central bank), or by being forced into it by the market, to give up trying to forestall this deflation.

They spent $50 trillion – yes, $50,000,000,000,000 – over the last seven years to stop this deflation. That money must still be repaid (it’s on their books as loans). But, in a deflation, debt doesn’t get cheaper – it must be repaid with ever more expensive money, as money grows in value (a dollar buys more, in other words).

The nineteenth century didn’t have central banks and spent half its time in inflation, half in deflation. That was the pattern since the fourth century in Europe. The twentieth century was one long inflation.

Dare you bet that the twenty-first, starting in deflation, won’t be a long, long run of deflation (relative to periods of inflation)? I wouldn’t.

What this means for your career is twofold. First, everything you know about assets, how they change in value, their long term value, is suspect. All that knowledge comes from inflation. None of it comes from deflations.

Second, jobs held up by inflation – especially those that aren’t critical to the work of the firm – are about to be dispensed with. Firms need plant workers and sales staff. They don’t need analysts, strategists, human resource clerks, and the like.

Look at how much of the support of the business is already outsourced. Ask what happens next.

It’s not only important that you do – it may be the difference between you having a retirement and feeding your family, or not.

If that sounds extreme, well, I’m sorry. But deflations are payback time – payback of debt, and payback of structural debts in the economy.

You and me? We just have to stay out of the way of being ground down.

The University Transition

Most people, reading a headline like “The University Transition” would pass it by thinking it’s yet another article about how the baby-sitting service known as high school ends, and that you’ve got to take responsibility for yourself once you go on to tertiary education.

But this one isn’t about that. Instead, it’s about the transition the universities themselves are going through — and what it means to you as a potential user of the university system.

Make no mistake, universities are troubled placed these days — and their time of woe is just beginning.

As usual, what underlies the pain is money. In particular, it’s where their money comes from, and how much of it has strings attached.

Few universities these days, for instance, get a major gift — the ten million and up range — that doesn’t come with serious expectations attached to it. The conversion of the old Medical Arts building into the Jackman Humanities Institute, without strings saying how the Philosophy, Religious Studies, English Literature, etc. departments benefitting from it would evolve is a rare case. Far more common is “here’s the money for the new institute or building, but I want it to focus on this”.

Even when the benefactor is more hands off than you’d think (for example, Munk doesn’t really interfere in the evolution of the Munk School of Global Affairs) the worry is always there within the university’s management. They start editing themselves to “conform”.

Management, itself, is part of the problem in the modern university. It’s within one lifetime that universities have gone from essentially being managed by their faculty as a “corner of the desk” responsibility to having a management cadre that grows deeper annually. (In Ontario, where anyone in the broader public sector who makes more than $100,000 per annum goes on a publicly-disclosed “sunshine list”, it’s amazing how many middle managers — much less senior ones — come from the province’s university and college system.)

Put all these non-teaching, non-researching resources on the payroll, and something has to give. Is it any wonder two thirds of your instructors are on year-at-a-time contracts?

Undergraduate studies, of course, have been littered with teaching assistants (also known as graduate students) taking the classes while the nominal professor never appears for years. Given that research grants are another major revenue source, it should be no wonder that professors are expected to research (and publish!) first, and teach third (doing all the paperwork to get, administer, and report on progress for grants comes second). Some unemployed Ph.D. can be paid like a graduate student teaching assistant to actually teach the students…

But think about this: an institution like the University of Toronto has over eighty Master’s degree programs. Most of these are “professional” two-year efforts aimed at the job market — Master of Public Policy (MPP) for people wanting into the civil service, Master of Museum Studies (MMSt) for future curators and museum directors, MBAs for future “masters of the universe”, and so on. That two thirds temporary help profile increasingly reflects these graduate school degrees as well.

Given that dissertations need to be supervised by someone who will be there on a continuing basis, there will still be permanent, tenured (or tenure track) faculty involved. The division of the university into narrow Schools, Institutes, Centres, etc. means that many of these now have quasi-managerial roles as well, as school directors. What that means is that the whole baroque structure of little independent agencies, each out trying to raise money to keep itself going (from benefactors and grants) is now invested in keeping these units going whether there’s demand for them or not.

What that means is that undergraduates will be “slotted” into programs they may not want simply because when they go to choose classes these are the ones that still have seats open in their courses. Even if the Geology Department had 1,000 new students wanting to take its courses, its seats are limited. Some of those budding geologists will have to find a home in the open chairs offered in, say, the Department of Gender Studies, or the Journalism program (even though everyone knows the media is cutting back, not adding on new help).

Admission, in other words, is to the institution of the university. Getting your tuition dollars applied to something you want is one of those caveat emptor (let the buyer beware) moments. (My daughter chose between offers from Cambridge, University College London, and Durham for her Master’s in Archaeology, and selected Cambridge because of their specialty program in mediaeval archaeology. After accepting, and rejecting the others, and paying Cambridge, she was told that the mediaeval program wouldn’t be offered this year. While she’s happy enough in the Egyptology option, her professional career as an archaeologist has just been wrenched away from England and off to the sands of the desert — and should she choose to do the Ph.D. it will have to be in Egyptology (since she now won’t have the master’s level courses in mediaeval England on her transcript) or spend an extra year “catching up”.)

Meanwhile, governments are cutting back on the number of student positions they fund (increasing the competition between units), and on the funding for research, and support for publication venues. So all the pressures on the university are boiling over.

Now add the question of “do you need a university” raised by online courses, and the “what are you doing with your degree” caused by a job market in deep and fundamental transition and turmoil.

By all means go to university if it is the right thing for you to do (as a person, not because “of the job”). But understand you’re entering an institution undergoing a period of great stress and you will be buffeted by it, with little recourse. Much like an airline — which does not guarantee that you will fly anywhere with your purchased ticket, or fly at any particular time — a university does not guarantee that your admission and tuition will lead you to any particular program, any required course, any reasonable conditions for learning — or any destination.

The disconnect between what you experience and receive, and the reputation of the institution and quality of its faculty, has never been more profound. Choose carefully!

Designing Your Work for Dummies

If you peruse the online booksellers, or wander into a bookstore, you’ll quickly find volumes from one of two series, labelled either “(whatever) for Dummies” or “The Idiot’s Guide to (whatever)”. These two lines — which started as a way to produce manuals you could learn from rather than the incomprehensible ones delivered with computer products — now cover everything from cat care to knitting, fixing outboard motors to baking.

So, with chapeau doffed in admiration to the concept of making complicated things simple, let’s talk about designing your work.

Notice I didn’t say “find a job”. It may be that the design you come up with leads you down that road (it’s hard to be in certain roles without fitting into an existing societal structure). But if you start by thinking about your future in terms of designing around the work you’ll do, you will have a lot of the thinking necessary to consider creating your own job.

The person who is employed by someone else can find themselves out of work because of external events that cause the enterprise they’re a part of to cut back or fold — or they can be on the street (or never hired) because of the pique and incompetence of a manager (as sketched daily in Dilbert by Scott Adams). The person who creates their own situation is still at risk of the first — but is unlikely to fire themselves in a malicious way.

The tool I’d like to point out to you is called a business model canvas. The million-copy seller for designing a business is Alex Osterwalder’s Business Model Generation. Its counterpart for designing an individual’s life-work plan is Tim Clark’s Business Model You. The latest improvement to the concept is Antony Upward’s “Strongly Sustainable Business Model Canvas”, built around triple bottom line concepts (Antony has a number of interactive presentations, YouTube videos, and a LinkedIn group available on the web; the process of turning his dissertation into a friendly book is underway).

All you need is a hunk of wall. Some people draw the canvas outline on a white board, others tape up butcher paper. Get some post-it notes.

What the process of working with a canvas asks of you is to identify the answers to questions. When using it to design your life’s work, you can start with what you’re good at, or needs you’ve seen that could be fulfilled, or connections you have. When you use a canvas to design an enterprise (creating your own job), you do the same questions but with more business-like terms such as customer segments, value propositions, key partners, and the like.

It’s decidedly simple stuff, but powerful. Four people gathered toward the end of February to think through the creation of a new not-for-profit organization to promote local business webs in a major city. None worked in the field (although all were running their own enterprises). None had training in the use of the canvas. Two hours later, the wall was absolutely covered in post-it notes, real reasons why people would pay to join such an organization had been identified, its staffing needs had been uncovered, and so on.

If you take away the right conclusion from that — hey, I don’t have to be an expert on business to do this — good for you. You don’t. Which means you could work on your canvas with friends, with family, with anybody. You move the post-it notes around, you throw some out, you add some new ones. Collectively, they tell a story about what would work for you — or how this new business would feed you.

Although Tiffinday wasn’t built using one of these canvases, it was thought through the same way. Tiffinday is a company that delivers hot, fresh lunches in Toronto’s financial district. The containers are reusable. The food is prepared by mothers with children in school. It’s put together in the mornings using a parter — an evenings-only restaurant whose kitchen was free (there are laws about food preparation). A bicycle courier company delivers the containers, then picks up the empties after lunch for cleaning. Everyone’s home again in time for the kids to come from school.

Would you have thought to provide an ever-varying menu to workers in cubicle land, employ people who would likely not work because they’re only available between 9 and 3, partner to use underutilized resources and avoid having to capitalize your own using all the traditional “follow your passions” business development advice? Canvases can see all sorts of opportunities that traditional methods don’t.

This is just one of the way Personal Due Diligence advisors work with clients to expand their opportunities. Are you ready to expand yours?

“PS—We also walk dogs”

There are many people I talk to who wrestle with the challenge of thinking up a business for themselves.

They often make this more difficult than they need to. We’re all so enamoured, after all, of the great success stories. Jobs building Apple (twice!), Gates building Microsoft, Page and Brin building Google, Zuckerberg building Facebook — stories of starting from nothing and making billions in just a few years.

Wrong target. So, too, is the notion of “I’ll make my company so valuable to Cisco, or Microsoft, or Google that they’ll buy me”.

As a Personal Due Diligence advisor, I spend a lot of time telling people, younger and older, that that’s not how it works. Instead, look for a way to create something novel and useful in a market that already exists.

Robert Heinlein, the science fiction author, wrote a short story in 1941 entitled “—We also walk dogs”. It was the tale of a company called General Services, which would do anything legal for a client. Its tag line was the title of this post: they’d come in and clean, they’d walk your dog, they’d run your errands. But they’d also do fascinating new things, finding the engineers and scientists needed, to carry out demanding projects (such as, in the story, inventing an effective gravity field generator to nullify the planet’s field and replace it with one of their own).

It’s a great insight into making your way in the world: not necessarily having the skills, but knowing how to identify what’s missing and fill the gap, and providing a service in a different way.

Think about the following examples of so-called “businesses killed by the Internet”, and how to make them prosper.

  • The Bookstore: the remaining bookstores tend to find avid browsers, but few purchasers. But you can specialize in book knowledge and “meet the author” events; you could do the “sit and read” coffee bit but with a twist: pay for your coffee if you don’t buy, your coffee purchase applies to the book in your hand if you do buy (to stop the “browse to find out what I want, then order from Amazon” phenomenon; you could employ a cyclist to “run your purchases home for you” while the customer continues their stroll unencumbered”. Even coat racks in winter can help with differentiation.
  • The Travel Agency:some still survive, but now they specialize. Custom holidays, not just the sale of pre-packaged resort/flight deals; cruise specializations (these are harder to put together on the web); but what about the kind of holiday where you live in a place for a while and have a local contact ready to help you with language, culture, supplies, etc. (something AirBnB can’t do). Local phone SIM cards (to avoid roaming costs) are another simple wrinkle to differentiate.

Or perhaps you could put together some interesting combinations:

  • Roaming office plus coffee shop: Most independent consultants (and many other independents like artists and writers) make coffee shops their “home away from home” between meetings and simply as a place to work around people. Coffee shops, in turn, go for uncomfortable chairs to help keep people moving in — and out. Suppose you took the idea of the shared office facility (rent a desk with WiFi for the day) and did it in a coffee shop: drink for free, and pay for the time you spend there. (This idea is being done in Russia, and is coming to Canada.)
  • Neighbourhood play centre plus café: I’ve seen this done in Vancouver: a café constructed around being the place for at-home parents to bring their youngsters. Half the floor space is the play area. Parents sit around it (and there’s a mix of kid-sized and adult-sized chairs). Dual menus: panini, pastries, espressos for the parents, and mac-and-cheese, fresh fruit and veggies chopped “kid size”, and fruit juices for the youngsters. Come and spent a couple of hours getting adult conversations and playmates for the kids!

Now none of these ideas are going to make you into the next high-tech billionaire. But what all of them illustrate is that innovation to create our own personal security is open to all of us. Any of us could come up with any of these ideas, and build a job for ourselves out of it. (Who knows, you might even enjoy the business you build!)

That’s why your personal due diligence about your own life starts with assessing your education needs with a weather eye on transferrable skills, not just “job-ready programs”. It’s why we say “pay cash” rather than use debt: not having student debt as a millstone (or personal debt, later in life) means you can take the risk of starting a venture more readily. Even if you’re comfortably on the career ladder with no immediate danger signs in sight, or still so far from completion of your schooling that the “job problem” is still way out there, you can start training your brain to think innovatively.

To do that, simply play a game with yourself. Wherever you go, whatever you do, train yourself to ask “what could I ‘twist’ here to do this differently?” Don’t worry about good ideas vs bad ones yet. Just get used to looking for ways to do things differently. (Later, you can add on the “how could I find the expertise needed” and so on to train your mind to think about that as well.)

It may be an ever-tougher economy, with more and more jobs at risk — but it’s also raining opportunity like never before. We can help you become one of the ones who thrive.

Academia is responsible for the devalued degree

You’ve probably heard the phrase “bad money drives out good”. That’s Gresham’s Law expressed in its colloquial form.

If you want to know one of the big reasons six, seven or more years in higher education (with the resulting costs or debts) doesn’t guarantee you a job; why the few position advertisements you see all demand other credentials on top of degrees; and why, if your résumé doesn’t show that you’re constantly taking new programs and acquiring new credentials, it gets binned on arrival, just think about Gresham’s Law for a moment. If the “money” is good (your degree is worth something) it doesn’t need endless add-ons and you don’t need endless new degrees on top of your old one. If it’s debased in some way, on the other hand, “more” will be better (think of it as just another form of inflation at work).

Now take a look at what Karl Denniger posted this morning, in “That College Degree? It’s Worthless.

Before all those of you who have your credentials from a Canadian, British, Australian, French, etc. university start snickering at the “perfidious effects of making the football and basketball coach the highest-paid person on campus” that’s so prevalent in the United States, and patting yourselves on the back for having gone to a place that “put the academics first”, hold on. Debasement and the graduation of students who should never have been allowed to pass isn’t just found around the athletic scholarship community.

Any school that debases grades — or simplifies course materials to ensure a higher pass rate — or reduces the amount and types of work required — or poses multiple-choice tests as “examination” without other means of testing what’s been learnt — is engaged in the same game as passing through the point guard or linebacker who can’t read, can’t write, can’t do much of anything, really, other than play the game.

That kind of “bad” degree has been driving out the quality ones for a long time now.

First of all, the dumbing-down of the public school system has meant that much of the first two years of a bachelor’s degree now is taken up with teaching things that used to be part of the high school curriculum, back when many people went to work on the strength of less than a high school graduation. Staying in the university-bound stream say, sixty years ago, meant you were doing what is now second-year calculus and algebra in your Grade 12 math class — the same for the hard sciences, the social sciences, and the humanities — because by the start of Grade 11 everyone else had peeled off, into a different work-bound program, or left school and taken employment.

(My father built his entire career on a Grade 10, Business and Commerce stream education, rising to high management in a major corporation. On the way through his employed life, he also invented a solution to an on-going problem that gained a patent — and not one of the phony, lawyer-driven ones like “one-click ordering” that pervade the patent system today.)

As an undergraduate in the 1980s, my papers came back to me dripping with red ink. Every misuse of the English language was picked up and criticized. Class averages ran in the C to C+ range — Bs really were “exceeds expectations”, and the As you received reflected “outstanding” work.

I’ve been a university professor in three different faculties at two different universities in the 1990s, 2000s and 2010s, all teaching Master’s level courses. Had I marked as I had been marked (and since, in my elementary school years, I was marked on a scale where 70% was the pass-fail point, and therefore was used to a demanding system) there would have been a riot in the streets. Every time I’ve taught, there’s been a line of whinging students at the Dean’s door complaining about having to be evaluated by oral examination, by written examination, and by presentation in a class setting with no multiple-choice in sight. Every time there’s been complaints about the red ink correcting their language (even though they, unlike me, didn’t lose marks for it). Anyone getting less than an A- moaned because I “wasn’t being fair”.

Every time, as well, the Dean would force me to “redo” my marks, to keep the institution’s “A-level reputation” intact.

You pass out students who don’t deserve bare Cs with As and you devalue your degree. It’s as simple as that.

Gone are the days when simply seeing Cambridge, Oxford, Toronto, McGill, Harvard, Yale, etc. on someone’s résumé meant you didn’t have to think about whether or not they were competent. The Ivy League and the Canadian schools have long ago gone down the same “can’t fail anyone, everyone’s ego is too fragile not to be classed as really exceeding expectations or being outstanding in some way” trap the public schools went into.

Take a look at business communication today. Riddled with errors. Unable to express coherent thoughts. Or business numeracy: missing in action (people who can’t figure change without a computer to tell them precisely what to pull out build spreadsheets which we all just use and treat as gospel). Or logic in decision making. I see a fair number of strategic plans that have contradictions on the same page — often in the same table or paragraph — and no one bats an eye.

No wonder employers now demand very specific additions to your degrees. After all, credentials like the Securities course (CSC), HR Professional program (CHRP), or Project Management credential (PMP) don’t come with the residual “odour of success” that a name-brand university offers. They have to be effective at transferring skills, or they go nowhere in the market (like the ISP that the Canadian Information Processing Society tries, year after year, to foist as the “mark” of an IT professional).

The on-going addition of more and more letters after your name, in turn, is driven because all that “effective skilling” comes at a price: it’s not education (giving you abilities for a lifetime) but training (giving you specifics that expire as the world changes). That the typical method of job evaluation to set pay grades used in most organizations is driven by educational qualifications — and because managers’ pay bands go up if the staff under them are raised — the quest for pay increases has led to the specification of increased qualifications, one piled on another.

Your responsibility is to ensure that you get value for money in your education. That means, first and foremost, that you get one. A paper dripping with red ink and an honest “C” will teach you far more about communicating effectively than any degree program in “communications” will. Find the toughest old-school types, and learn from them.

Then recognize that in today’s world your institution of higher learning is probably debasing your degree anyway. But if you’ve really learned (as opposed to just passing through) you’ll be prepared for what life throws at you.

With 3 out of 4 white Americans (just about 4 out of 4 blacks and Hispanics) now expected to experience at least one period of significant unemployment and poverty in their lifetime, you had better have gotten something permanent out of it, eh?

Why you go to school

With a headline like “why you go to school”, you’re just waiting for the common answer of “to get a good job!” to be exploded, aren’t you?

Well, if you’re a regular reader of Personal Due Diligence, you probably are by now.

In this morning’s Globe and Mail, Kevin Lynch, Vice-Chair of BMO Financial Group (and former Clerk of the Privy Council, Canada’s top civil servant), cited “literacy, numeracy, creativity, adaptability and entrepreneurship” as essential to success.

That’s why you go to school. A career that sustains you flows from that.

Now think for a moment what those five require of you.

Are you going to get that by rushing your way into some programme or other that promises “a good job” at the end of it? Probably not.

Robert A. Heinlein, in his book Time Enough for Love, took the view that “specialization is for insects” — in other words, that we need to bring many different skills to the table in order to deal with life. His quoted list is longer than Lynch’s, but unsurprisingly contains those five elements — but with the possible exception of “die gallantly” isn’t longer.

The problem with any educational programme that’s geared to “job gaining” is twofold. First, it will necessarily be more narrow than you’ll need in the long run. That’s because most of the jobs that exist today won’t exist forty years from now (just as a fair few number of those from forty years ago are on the rubbish tip of history now).

On 16 January 1974 — forty years ago — I started work as a computer operator in a data centre. Of the four manufacturers of computers in that data centre only one remains in business today. My first jobs there included mounting tapes (robots do it, to the extent tape exists now), running a burster/decollator (we no longer print on carbon-paper multi-part forms that have to be stripped apart and have the sprocket holes sliced off before using), running the “scanning” computer (which was started up by feeding in a program on paper-tape, no longer in use), sorting card decks pre-input (we neither keypunch card nor use machines programmed via plugboards) and running an all-batch workload environment (very little processing is done in an offline, batched way any longer).

Good thing I wasn’t “trained” to be “job ready”, eh?

Of course, forty years in and around IT work (my degrees are in philosophy, not computer science) have taught me one thing. Every technological evolution in the IT industry has actually led to its “professionals” dumping all their hard-earned experience of how to do things well in the dumpster in a mad dash to “the next new thing”. I’ve earned more than a few dollars over the years by having a memory for how we solved a problem the last time and being able to communicate that history in the language of the new paradigm.

Seems my literacy, studies in history, and reasoning classes have served me better than any amount of technical training might have.

Here on PDD, we’ve repeatedly said “pay cash to go to school”. If literacy (the humanities) and numeracy (maths and the sciences) are one part of the puzzle, the “pay cash” part turns to the “adaptability” and “entrepreneurship” part.

Here’s the nasty thing about coming out of school in debt: you have to pay it back. (Indeed, if you do that in the United States, you’ll find that the one debt you can’t, by law, discharge in bankruptcy is your student loan. You can dump your credit cards, kill your mortgage, even stiff the IRS — but you can’t wipe away the enslavement of your university years.)

Having to pay it back, in turn, forces you to take a job — any job — rather than explore your options.

You see, for every hour spent in a classroom, you need to spend at least another one in “the school of life”. There are those who are happy, for instance, being a barista (they like people and enjoy serving them; they have another career they’re working on and this is the extra money needed to close the gap; they’re studying how the shop works with an eye toward maybe starting their own one day — three different baristas at my favourite local independent coffee house fit these to a “T”). Then are those who are pouring coffee because they’ve got loan payments to make: the sort that, in the words of Daffy Duck in Beanstalk Bunny, say “it’s a living”.

Trying your hand at something new, or something entrepreneurial, when you’re a newly minted graduate is likely a little easier than having to gear up and do it for the first time in your late 40s having just been dumped out of the corporate career ladder with no easy way back in. Doing it with no prior obligations is, of course, even easier.

What’s more important is that the move to self-employment — with a business, or as a consultant — isn’t as much of a one-way trip at 25 as it is at 50. At 30, having your résumé read by someone with a job to offer showing you spent five years working in a not-for-profit, or trying your hand at business, merely translates as “lots of useful skills”. Doing the same thing twenty years later translates as “not our sort of person” and is binned long before the interviews start.

So, when it comes to your education, take the long view. Arm yourself with a diverse, useful background — something that can fill a good part of Heinlein’s long list of “a human being should be able to…”. A good understanding of history, your culture, maths, at least one science, will serve you well in many different endeavours. Do that without risking a penny of your future earnings. None of that education will be replaced by the march of progress — and it frees you to then give yourself the “school of life” lessons needed to succeed in the long run.

In the meanwhile, learn to think long term, as Lynch suggests. Periodically that may mean investing in a year or two of “professional grooming” (what else can you call a professional Master’s degree or certificate program?) because where you need to be next needs what that offers. But by then you’re earning, and again, can pay for it, cash on the barrelhead.

Maximal flexibility to seize opportunities — minimal ties holding you back from doing so — it all adds up to a life with you in charge, not the whims of some “boss” whom you have to put up in a desperate quest to keep the money flowing to pay the bills.

Getting there involves more than good luck, though — it involves planning. That’s where the advisors at PDD come in.

2013 in review: Personal Due Diligence read in 94 countries

The stats helper prepared a 2013 annual report for Personal Due Diligence, and we’d like to share it with you.

Here’s an excerpt:

A New York City subway train holds 1,200 people. This blog was viewed about 7,900 times in 2013. If it were a NYC subway train, it would take about 7 trips to carry that many people.

Click here to see the complete report.

Forty-five plus and nobody loves you

There’s been a rash of stories in the world media over the past four weeks basically spilling ink to tell human interest stories. In all of these, the message is the same: here’s these hard working people who got turfed out of their job, and can’t find a new one, woe is them.

Oh, and that because they’re now long-term unemployed, they’re unemployable. Whether they like it or not, designing an enterprise that can support them has just become their responsibility (woe is them).

As someone who’s next birthday starts with a six, and who’s spent much of the past fifteen years wrestling with this condition, I certainly understand the disruption to families this causes. Three times, over the past decade and a half, I’ve managed to wrest myself out of self-employment-by-necessity and back into a regular paycheque. Within two years, it would end (one management buyout thanks to downsizing, one company acquired and good-bye, and one “so long and thanks for all the fish” non-renewal of contract so that a Board Member could solve his lack-of-paycheque problem).

But the presumption that there’s a spot on the career ladder (and you just have to work harder at landing it) is what’s wrong here.

There are fewer of those every day. What’s worse, more and more of what’s left is now in “grace and favour” status, as opposed to “meritocratic” status.

Let me explain. Have you ever heard the line (from back when performance evaluations were given letter grades, with A being top performers) “As hire As, but Bs hire Cs”?

Top performers have been systematically culled from organizations now for a good twenty years. Going back to the early 1990s, when pay rises compressed down to the usual cost-of-living, or two to three per cent range we’ve been used to, the easiest way to keep budgets in line for compensation was to find a reason to cull the top performers. After all, they were the ones who could choose to leave — zapping a budget with zero flexibility with hiring and maybe training costs — and they were the ones who wouldn’t be happy with a pawned off two per cent.

Today, the typical organization with a career progression has far fewer A performers than it used to — and the Cs are now hiring Ds and Es. (Or, to put it another way, basic performance has degraded significantly.)

An organization run by ho-hum performers treats raises and promotions as “favours”, not as recognition of performance. In turn, people seek the “grace” of those who control their continued presence there.

The net result is that the merit-based is displaced by courtier behaviour.

Now, for those who are long-term unemployed, coming back into a workplace as an employee after several years of scratching out a living doing what you could has ill-prepared you for re-entry. There’s no choice but to be merit-based when you’re asking someone to sign a contract, after all. Even if you weren’t very good before starting, being your own boss has sharpened you up.

When you’re hired, therefore, the clock is already ticking. Merit has become a danger to a grace-and-favour world.

For the forty-five and olders who are let go — in a bankruptcy, in a merger, or just one of the periodic “balance the books” purges — there are three immediate choices to make.

First, do you want another job or not? If you do, you’d better get it quick, before you’re “aged goods”.

Second, if you want structure, can you get there from here by building a portfolio of volunteer work coupled with some employment in your field? (Think of this as the career-change option.)

Third, do you want to build a vibrant business of your own (which could be a not-for-profit) to replace the job you had?

There are now so many people on the shelf of “unwanted” that expecting a turnaround in the economy to solve the problem and put everyone back on the career ladder is ridiculous. Moreover, the longer you’ve survived without a “job”, the less likely it is that some C performer hiring for an opening will be anything but threatened by you. No job offer there!

This is harsh stuff to get your mind around — and even tougher on families. All these years later, I still get asked why I don’t just “get a job”, or why I can’t move repeated clients to just “hire me” and be done with it.

It doesn’t work that way, and that’s the end of the story.

I see it in my son…

My son is 19. He’s taking a gap year to figure out what to do about further education, and at least he’s working almost full time (at McDonald’s, where he’s worked part time for three years previously). But he’s worried, angry, confused, and doesn’t know how to deal with the future.

Evidently he’s not alone. Similar emotional distress permeates the offices of counsellors on college and university campuses, as the line of students outside their door grows daily. My daughter spent three years as a volunteer in a crisis centre and heard it in the calls nightly. And last weekend, at the Beyond Earth conference held on the campus of the University of Toronto, those at the tertiary education point and beyond were the depressed ones, while those still in junior high or high school had the sunny optimism of youth.

What’s going on? What is it about the transition from high school to university that triggers this kind of response?

Awareness. There may be options to select in high school, but by and large everyone’s taking the same basic core. Colleges and universities, apprenticeships, and just striking out into the workforce, on the other hand, are decision points. The right institution has to be entered (let’s face it, like it or not, there’s a quantitative difference between having Regina or McGill, Mississippi State or Harvard, Ipswich or Cambridge on your diploma), followed by a course of study that will “pay off”.

These young almost-adults aren’t stupid. They know that none of the “job readiness” in their education is mattering at all.

They’re also presented — daily — with the evidence of the two economies discussed here on the Personal Due Diligence blog. For (as one commenter to “Dealing with the Dual Economy of Today” noted on Facebook yesterday, “how would you apply this to health care, education, and government”) they’re smack in the middle of the most resistant to change parts of the first of the two economies.

At one time my son considered becoming a teacher. He’s now sure he wouldn’t want to — and not just because there’s a current surplus of teaching graduates. He’s convinced that the system itself is creaking, groaning, and that all the effort is going into maintaining it exactly as it is, instead of moving on to something that might have legs.

Much like the large corporate world, the world of the big banks, insurance companies, trans-national retailers, global mining and energy concerns, etc., our health authorities, school districts and the many ministries, departments, agencies, boards, and commissions of government seem more concerned to “just keep it all going” than to begin thinking about real change.

Yet my son is equally fearsome of the second economy. Part of that is the glorification of the risk taking entrepreneur to take on the world. We all hear so much about how Bill Gates, or Larry Ellison, or Rupert Murdoch, or Steve Jobs, or Larry & Sergei at Google, or Mark Zuckerberg at Facebook, pole-vaulted to the top that the idea sinks in that unless you’re deeply technical and can build something really exciting you can forget it sinks in.

When your choices look like “go through and have no security preparing for a world that’s endlessly compressing, or be a ruddy genius and break through in technology”, it can become immobilizing. Perhaps my friends with thirty-something children still living at home might agree.

As parents, we want our children to do well. With today’s world, that means telling them the journey’s gotten a lot more complex.

My advice to both my children has been simple:

  • Pay cash for your education. You have full flexibility and mobility if you’re not burdened with debt.
  • Since you’re paying cash, take what you want. Education isn’t training, and it shouldn’t be about “a job”. It’s about expanding your mind and preparing you to do many things.
  • Ask yourself about your skills, and all the different places you could use them. Even working at a fast food outlet gives you more skills than following their procedures would suggest, but only you can ferret them out and know how to present yourself with them.
  • By the time you’re ready to stop working, nothing will be the same, so be prepared to live a life of constant change. There’s no safe industry, no safe job, no safe place. On the other hand, it’s raining opportunity, mostly because of all that change.
  • Technology, wiz-kiddery, etc. isn’t half as important as doing something well and with a smile. If you serve coffee, make it good coffee. If you check peoples’ expenses, don’t be a petty bureaucrat when you need to question them. If you cut hair, give good haircut.
  • Always be learning, but also, don’t only look to one type of learning. (My daughter went to work at a museum as a guide so she could learn about Chinese culture.) Play, active work, these are all part of learning.
  • Oddly enough, if you’re worried about security, you’ll find more of it working for yourself than you will working for someone else, although there can be some very scary moments when you’re heading up your own venture.
  • Last, and most important, don’t look at my career. My CV represents a by-gone era. Half the companies on it are gone. Half the jobs don’t exist any longer (or in the same form as they did when I held them). Pay attention to “now” and don’t try to repeat “then”.

I’m not sure if my son will find his way sooner or later. But at least he’s not stumbling through a degree in something he doesn’t care about toward a job simply because it’s “security”.