Category Archives: The state of the world

James T. Kirk and the Kobayashi Maru

 

On his third attempt, Captain James T. Kirk of the starship Enterprise passed the Kobayashi Maru holodeck “no-win” training exercise by reprogramming it. He was subsequently commended for original thinking. Whether or not this was Starfleet’s way of saying that reprogramming was an option because it was not expressly forbidden, only the film’s writers Roberto Orci and Alex Kurtzman know for sure.

Fiction or no, that part of Star Trek lore resonates in 2015, especially the part about original thinking. The 6 crew members onboard the International Space Station may be excused if they haven’t had time to contemplate how sub-US$50 crude oil will impact on them and their families. But the rest of the people on planet Earth won’t have that luxury.

For Canadians, the world started to change on July 1, 2014. On that day, the Loonie closed at 94 cents. It started changing a lot faster when the Bank of Canada lowered its interest rate to 0.75% on January 21, 2015. We’ll soon be paying a lot more for our morning orange juice, and a lot of other things, courtesy of a 78.5-cent dollar as of February 1, 2015. The interest rate could fall to 0.5% as early as March. Barclays Bank has downgraded its stock ratings for the Bank of Montreal, Royal Bank and TD Bank, noting that “consumer borrowing, the main profit driver for Canada’s banks, will likely slow even more than previously expected”.

Much of the reason will be stories like Target Canada’s abrupt closing of its 133 retail outlets and the 17,600 Canadians who were let go as a result. That doesn’t include Target’s suppliers. SONY Canada is closing its retail stores. Alberta now faces the prospect of recession. Oil companies are cutting back on capital expenditures and hiring. CIBC will be laying off 500 employees because of slower than expected profit growth.

The Kobayashi Maru scenario left little room for “if it ain’t broke, don’t fix it”. For the moment, Canada looks like an oil-based, one-trick pony. Canadians will have their say about whom they blame and what should be done about it on October 19th—or sooner.

We keep hearing that a lower dollar will be good for Canadian manufacturers and exporters. But in the meantime, we have to play the cards we’ve been dealt. That will call for out-of-the box thinking by Canadians looking to become re-employed and those hoping to land that first job.

What is broken and needs to be fixed is the notion that we can or should rely on governments at any level to do our thinking and planning for us. Most have shown that they can barely think for themselves. We’re going to have to develop our own versions of Kirk’s Kobayashi Maru, because without them, not all choices having to do with postsecondary education will be the right choices. There is nothing on the horizon to suggest that conventional thinking will mean that there will be more than enough good, secure, full-time work to go around.

As Jean-Luc Picard, captain of a later Enterprise, would have put it: “Make it so.”

 

From industrial to post-industrial: What does it all mean?

Graduating from university has traditionally been synonymous with the good life and financial security. In some cases, it still is. But not for graduates with degrees for which there is no demand. Work was supposed to be plentiful, not precarious. Yet here we are. The world has changed and we have to rethink how our children are going to earn a living and what kind of education they’re going to need. We have to talk to them about higher education, about how the cost is rising, and about how it wasn’t supposed to be this way.

Economies and societies evolve from industrial to post-industrial. That’s what’s been happening to us for the last 35 years. Wikipedia defines a post-industrial economy as: “A period of growth within an industrialized economy or nation in which the relative importance of manufacturing [shrinks] and that of services, information, and research grows. Such economies are often marked by:

“The industry aspect of a post-industrial economy is sent into less developed nations which manufacture what is needed at lower costs (see outsourcing). This occurrence is typical of nations that industrialized in the past such as the United States and most Western European countries.”

Akio Morita, the better known of SONY’s two co-founders, recognized the signs that North America’s economy was in transition in the mid-1980s. When he died in 1999, The New York Times published an account of his life that described when the transition began:

“In the 1980’s, when Japan seemed on top of the world, Mr. Morita was among the most vocal of the Japanese executives in criticizing American business and hailing the success of the Japanese model. He said American managers were financial paper shufflers who ‘can see only 10 minutes ahead’ and were not interested in building for the long term. And he said that because American companies were losing interest in manufacturing, the United States was abandoning its status as an industrial power.’ Those factors, he said, and not trade barriers, were the reason for America’s trade deficit with Japan.

“’There are few things in the United States that Japanese want to buy, but there are a lot of things in Japan that Americans want to buy,’” he wrote in 1989. “’This is at the root of the trade imbalance. The problem arises in that American politicians fail to understand this simple fact.’”

We’ve learned, some of us more painfully than others, that Morita was right. As went manufacturing, so went the economy. But manufacturing has been going elsewhere for the last 35 years and most people who have jobs appear not to have noticed. They’re convinced that a return to the good old days is just around the corner and they’re educating their children accordingly.

Even if they were right—and they’re not—graduates have discovered that the jobs “in their chosen field” that were supposed to pay off their student loans aren’t there any more. That’s something they and their parents should have known before they wrote the cheques or negotiated the loans.

Some of those graduates live in the U.S. and owe US$1.2 trillion. Their Canadian cousins owe between C$25 billion and C$50 billion.

Morita’s pronouncements were behind my founding Personal Due Diligence, or PDD. If the implications were going to impact on my two children, they were going to impact on other people’s children, too. PDD is sharing with parents and their children one-on-one the lessons of the last 35 years and helping them apply those lessons to choosing higher education. The seven planks in our platform are:

  • Researching and monitoring Canada’s economy
  • Researching and monitoring the global economy
  • Researching and monitoring the labour market
  • Acquiring and analyzing deep market intelligence
  • Identifying and analyzing industry trends
  • Quantifying and projecting precarious employment
  • Business case preparation to support a Plan A and Plan B scenario

An article entitled ‘The New Debate Over The Very Rich’ appeared in the June 29, 1992, issue of FORTUNE. It said in part: “Between 1980 and 1990, FORTUNE 500 companies shed 3.4 million jobs, but companies with fewer than 500 employees created more than 13 million.”

The Canada-U.S. free trade agreement (FTA) came into force in 1989. My multinational IT executive search clients were already responding. The consequences figured in our family’s discussions about university.

Canada now has 12 free trade partners. That number will grow to 21 when current negotiations conclude. There will be concessions, compromises, headcount reductions, restructuring, outsourcing and offshoring as employers adjust to their new normal. Please see the Foreign Affairs, Trade and Development Canada website for further information.

2014 in review

The WordPress.com stats helper monkeys prepared a 2014 annual report for this blog.

Here’s an excerpt:

A New York City subway train holds 1,200 people. This blog was viewed about 5,000 times in 2014. If it were a NYC subway train, it would take about 4 trips to carry that many people.

Click here to see the complete report.

Million-dollar promises, like old habits, die hard

A university degree used to be a guarantee of higher incomes over the course of a lifetime.

Not any more, according to Maclean’s in its January 21, 2013 issue. To read the article in its entirety, please click here.

 


 

A resolution to engage

COC-Brand-16

Jobs once performed by high school graduates now call for university graduates and postgraduates, not because the work demands postgraduate credentials but because, given the oversupply, they can be had for the price of undergraduate credentials—or less.

The fluidity in the labour market continues because of a spate of free trade agreements and freedom of movement across borders—for money and assets, but not people. Employers who can’t find the education they want at the price they want to pay for it in one country will happily relocate parts or all of their operations to one where the supply is cheaper and readily available.

China is moving from competing on price to competing on innovation. It landed a lunar rover on the Moon on Dec. 14th, 2013. An Indian satellite is now in orbit around Mars. It sent its first photograph of the Red Planet back to Earth on September 29th of this year, less than a week after it arrived.

The transition from high school to university has nothing in common with the transition to high school from public school. No laws oblige us to educate our children beyond secondary school. Unless postgraduate or specialized education is mandatory, where an undergraduate career ends is where the world of work begins. Employers are free to accept all comers, or none.

Institutions of higher learning aren’t required to prepare our children for that world either. We pay our money and we take our chances. But we can improve the likelihood of translating higher education into a living wage by teaching our children how to factor an understanding of demand and supply into decisions about why they’re going to university in the first place.

In his comments to the TEDxToronto Conference on October 2nd, John Cruickshank, Publisher of the Toronto Star and President of Star Media Group, spoke of the implications of young people’s not engaging with society because technology has replaced newspapers as the new distraction. To use his phrase, young people are “zoning out”. He spoke of voter apathy and how it threatens Canada’s democracy when elites fill the vacuum created by voters who are indifferent to the electoral and political processes. Another implication is the extent of our lack of knowledge about the land we live on and the extended family of which we’re a part: 35 million of us spread across 6 time zones.

As of this moment, employers have little taste for degrees in the humanities. There are many reasons to hope that that will change, but when is anybody’s guess. Our priority should be to better align higher education with what we discover by exploring and learning about what Canada needs so that our children can find employment, not unemployment, underemployment or unpaid internships.

This year has taught us a lot about what this country means to us. Cruickshank was right when he talked about engagement. A quick glance at the calendar says we’re a little over a month away from New Year’s Eve. Maybe this will be the year we resolve to learn more and care more about this place.


Retailing higher education — yours

Raphael’s painting of the School of Athens captures the essence of what some people would like to think university still is: scholars deeply engrossed in thought, debate and dialogue.


Raphael: The  School of Athens. "Sanzio 01" by Raphael - Stitched together from vatican.va. Licensed under Public domain via Wikimedia Commons - http://commons.wikimedia.org/wiki/File:Sanzio_01.jpg#mediaviewer/File:Sanzio_01.jpg

Raphael: The School of Athens. “Sanzio 01” by Raphael – Stitched together from vatican.va. Licensed under Public domain via Wikimedia Commons


Most people tend to think of it the way the U.S. Department of Labor and Wikipedia see it…


Earnings and unemployment


Is it any wonder that parents insist on spending money on higher education at any cost? Why wouldn’t they? But there’s a fly in the ointment. Actually, it’s more like sand in the crankcase and sugar in the gas tank: the charts apply only to people who have jobs.


US_household_wealth_by_education


 

Here are two stories. Both are true.


Story 1

The instructor walked to the front of the room, a small lecture theatre, really. The floor swept gently upward from the podium. Instead of individual seats, each of the 4 tiers featured 2 very long desks separated by an aisle with 6 seats per desk. The 20 of us who made up this particular sales class would spend the next 6 weeks together.

The lecture theatre was one of 2 on the ground floor of a 3-storey building in Princeton, New Jersey. IBM rented the ground floor and the subfloor where the demonstration and presentation rooms were located. Parents and children who rode the elevator up to “3” were there to see the dentist whose building this was.

The class consisted of 17 Americans and 3 Canadians. One of the Americans was Rob M., a former U.S. NAVY fighter pilot from Texas, and he looked the part. That included the naval aviator sunglasses: government issue and very macho. You couldn’t buy them anywhere. We learned the expression “cool your jets” from him. Three of the others and I were newly minted university grads. The rest had fulltime working credentials.

Al E. was the instructor. Football player type. He was wearing a dark blue, 3-piece suit, starched white shirt, “sincere” tie and wing tip shoes otherwise known as brogues or sodbusters. It was clear from the way the rest of us were dressed that we were with Al.

Al led off with a question: “How many of you would rather not be called salesmen?”

My hand and several others went up. Our reasons for raising them were very similar: sales people were smooth-talking glad-handers with loud ties, expense accounts, slacks and houndstooth sports jackets. At IBM, selling was and still is a profession, consultative selling to be precise. At the end of our 6 weeks, we all understood why. No gimmicks, no glad-handing, no back slapping, no smooth talking. Just hard work with emphasis on understanding what the customer needed, lots of emphasis. And on being able to communicate how we were going to use IBM products to address them.

Contrary to popular belief, IBM sales reps did sweat. More than most as it turns out. No more raised hands.

The predicament in which many of the graduates with one or more degrees and no work to show for it find themselves is very reminiscent of the lessons that came out of that IBM sales school. Our business cards were like university diplomas. We were proud to carry them and we were proud to present them. But there were other people out there with business cards and they were good. It’s just that customers expected something extra and better from the ladies and the gentlemen in dark blue suits.

There’s a name for that: value added. It’s what differentiated IBM from the competition.

Universities don’t offer courses in professional, consultative selling. Maybe they should for a modest fee before parents and students commit to 4 or more years. But that’s not going to happen because universities are businesses. First they sell the seats. Then they sell the education wholesale. Graduates have always had to find ways to sell it retail. What makes the job that much more challenging is that, in the eyes of customers, all degrees from the same university are the same and they stay that way until the graduate demonstrates otherwise.

Story 2

I recently attended at a meeting in which an employee with 25 years service with a consumer packaged goods manufacturer was released because the local function the employee headed up was being outsourced and off-shored. The employer explained that they were late moving in this direction vis-à-vis their competitors.

We recalled how Canada Post had been one of the first major corporations in the country to jettison its IT function in the 1990s. In Canada, Data Crown and CSG were laying the groundwork for that decision and others like it. The rationale was that the corporation wasn’t in the computer business: it was in the business of moving mail.

This is the part where the consequences of not understanding the needs of the customer kick in. You’ll see it in these CBC stories: Canadian job skills mismatch: truth or science fiction? Unemployment dips to 7%, most new jobs are part time. Where Canada’s job vacancies are—and aren’t. Loonie tumbles amid huge miss in jobs data, expectations, geopolitical worries. Then there’s Frazier Fathers with his undergraduate degree, two master’s degrees and unemployed in Windsor, Ontario.

Employment and Social Development Canada’s Canadian Occupational Projection System (COPS) predicts that growth in industrial GDP [will] improve in the primary and manufacturing sectors between now and 2020, driven mainly by foreign demand. This should come as welcome news for anyone who plans to graduate with a postsecondary education before the end of the decade.

The free trade agreements into which Canada is entering—including the Canada EU Trade Agreement (CETA), details of which will be released shortly—will change customer behaviour. How will they change employment prospects? What is it going to take to win?

In my 7 years with IBM, I saw “THINK” and “There’s never enough time to do the job right, but there’s always enough time to do the job over” in close proximity to each other more than once. It’s not so easy to do the job over when your first degree involves stocking up on education nobody wants to buy.

If the education system were more about education and less about politics, it would be providing up-to-the-minute information on which to base decisions about advanced schooling. The media are much better at it. So is the price they charge.

Rob Kelly defines gap analysis as “a strategic planning tool to help you understand where you are, where you want to be and how you’re going to get there.” High school graduates must understand that where they and their parents might want them to be and where they may have to be could be two very different places.

The day newly minted graduates receive their diploma is the day they become unemployment statistics—unless they have a job to step into. We have enough statistics. Most of them have dollar signs in front of them: $1.2 trillion owing in student loans in the U.S.; $25 billion to $50 billion in Canada. At least 7 million U.S. students have defaulted on their loan payments at least once.

We need as many gainfully employed graduates as we can produce. For their sake and for the sake of the country.