Tag Archives: education

Customers First, Investors Last: What were they thinking?

For years now, my colleagues and I here at BoardBench, have been saying that Wall Street has it backwards.  In the boardroom, directors have been fed, with a very large spoon, the mantra that they are beholden to the shareholder, that their purpose is to “maximize shareholder value.”  If you asked a large group of directors if this is true, you’d see a lot of bobbleheads in the room.  Many believe this is a legal requirement and in line with good business sense and good corporate governance.  Unfortunately, the concept of “shareholder primacy” is a relatively recent phenomenon.  It is also simplistic (shareholders’ wants are not homogeneous), has no legal basis anywhere (go ahead, try to prove me wrong), and, as many are now pointing out, usually damaging to companies, and the economy as a whole.

What we believe is real, and will eventually be proven again as real to the Street, is that customers, and employees are the two key drivers of corporate success.  When I say “again” I’m referring to Peter Drucker’s famous quote from decades ago: “the purpose of a business is to create and keep customers.”  So many seem to have forgotten this, or have never even heard of it.

But the basic premise is this: if you take care of your customers, and have great employees who are well supported and appreciated for being curious and excited about what they do such that they will ensure that customers love the products and services that the company offers, the company and shareholders will reap the rewards, too.  Of course other things come into play, like managing R&D investments (with the customer in mind), operations, and supporting a corporate culture that has strong values and morals.  The basic premise may be slightly oversimplified, but it applies, and should resonate with the board.

It appears that I’m finally not standing alone on this either.  In a recent interview, Jack Ma, the world’s newest CEO darling, made two bold public statements.  He basically shunned the current thinking of the Street by stating, on national TV, that “our customers come first, ouJack.jpgr employees second, and our shareholders third.”   He continued: “We aim to be larger than Wal-Mart by 2016, or sooner.”  If – no, when – Jack succeeds, and executes flawlessly on his statement, that customers and employees take a front seat over shareholders/investors, then he’s got an excellent chance of passing Wal-Mart as the world’s largest retailer.  Note, Wal-Mart just slapped some of its employees, who have the most direct relationship with their customers, by cutting their insurance benefits. This was probably done to cut costs, but it will probably also have a long-term impact on their customer relationships, too. But, I digress.

It seems that too many directors, CEOs, and business leaders, have become obsessed with what Wall Street, its analysts, and shareholders think.  Many have learned to play these groups exceptionally well, too. Countless analysts and shareholders have been taken in by companies’ projections, quarterly earnings estimates, and highly creative financial management and reporting.  Don’t get me wrong, the importance of the exchanges and the markets cannot be downplayed, but a balance is needed.  Focusing on Main Street is just as important, if not more so.

If you follow Main Street, you know about big box discount stores. Costco Wholesale Club, founded by Jim Sinegal and Jeffrey Brotman, believe in serving the customer first, and that if employees are treated properly, they will work with, and treat the customer well too.  Jim, the public face, is a “hands on guy” who is known for visiting each individual Costco store.  Jim is also outspoken about his views on Wall Street.  He’s been known to say that he puts his customers and employee needs above “pleasing shareholders.”  This philosophy must be working: Costco’s five year return is +116.73%.  If you bought the stock earlier, your return would be closer to 354%.

American Express is another company known for taking good care of its customer/members.  Personally I’ve been a fan of the company’s customer service representatives over the years, and tell them that every time I’ve called for help.  Don’t get me wrong, working at this company must be tough: when I was younger, AmEx employees were nicknamed The Dragons.  Perhaps because they were seehat2.jpgn as willing to fight for the company and their customers nearly to the end.  By the way, if you invested in American Express five years ago, your return on investment would be up 149.46%.

If you’ve worked with the general retail public, as I did during my college years, then you know just how tough this can be.  Sadly, not everyone who enters a store, calls a helpline, or dines in a restaurant is a kind and thoughtful customer.  Amazon deals with all sorts of customers from nearly every continent in the world, and I’m sure they have some interesting stories to share.  However, the company is noted for being one of the best customer service organizations in the world.  Amazon has more than one customer base, as many do: retail members, and consumers.  Jeff Bezos clearly divided the customer’s connection to Amazon into two categories: the experience and the service.  At this level, he notes that customer service is part of the full customer experience.  If it’s unpleasant, it’s a negative customer experience.  He supports the idea that a positive customer experience creates greater loyalty with Amazon.  If you’ve ever dealt with an Amazon Customer Service rep, you know that they work quickly to resolve your issue, they get the job done for you, and you are nearly always satisfied and left feeling good about your relationship with Amazon.  And, if you invested in Amazon five year ago, your return on investment is now up 236.64%.

While it’s much more pleasant to focus on the “good guys,” there are dark clouds.  Some companies are noted for their poor customer service.  Some survive because there are few alternatives: think of phone companies and cable providers, and some you can name on your own (take a look at their five-year ROIs).  However, when it comes to poor customer experience these days, I think sadly of that American icon Sears.  Whenever I bring them up these days, all I hear is: “Oh my gosh, I could tell you about the time when…”  Sears is a sad story101.jpg about the decline of a once great and loved retail giant.  Many years ago, the Sears catalog used to be called a “wish book.”  Families would anxiously wait for it to arrive in the mail.  It was nearly 5 inches thick. Moms, dads, sisters, and brothers would argue over whose turn it was to browse through and select from among the items they wanted for birthdays, holidays, special occasions and more.  Some people even bought their homes out of the Sears catalog.  But, it has lost its way, and it’s touch with its customers and has already begun its drop down that magical slide once pictured in its own catalog.  The entire company and its hopes for the future look pretty dismal: sell off of units and real estate, store closings, etc.  Sadly, if you invested in Sear’s five years ago, your return on investment would be -58.50% and it’s still falling today.

To sum up and put things into even sharper perspective, I recently spoke with the General Counsel of one of the largest, most recognized corporations in the world.  He told me, succinctly, that the biggest problem with their board is that not one director had any understanding of who their customers were and are or what they want.  I can also assume that they don’t understand their employees either.  So I will watch how this company slides in the next few years (Note: their record has been negative for some time), and report back with an update, unless, that is, they somehow figure it out and turn it around.

Do you need to focus on board improvement: composition, strategy, direction, execution, oversight?  Boards are our specialty. Give us a call.

Nancy May

Is this why we’re spending money on higher education for our children?

Q: What do you want to be when you grow up?
A: Employed!

How are you going to explain that this isn’t your grandfather’s economy?

If deciding what university or community college or trade school your child is going to attend is starting to keep you up nights, you’ve probably visited more than a few of their websites. You’ve looked at the pictures of smiling faces, viewed the videos and read the inspirational language intended to convince you to spend your money, and, possibly, your child’s future, with the people on whose behalf those websites were created.

By now you’ve noticed that (a) you’ll have to do some digging to find any mention of tuition, fees and expenses because it would be in poor taste to publicize them on the home page; and (b) every one of those institutions is looking for a donation.

There are some who consider it gauche to have the words “money” and “university” in the same sentence. They would argue that higher education isn’t about money: it’s about introducing young minds to new ideas and new ways of looking at the world and themselves. It builds networks that include students who sit next to one another in lecture halls but live half a world away. Then there’s the benefit that comes from learning to fend for oneself away from home. This is the point where laundry and groceries enter into the discussion.

Those people would be right—to a point. But when the last glittering speck of that pixie dust that university websites magically create settles gently to the floor and the cool breeze of reality wafts through the room, the fact of the matter will be that nothing about attending an institution of higher learning is free. Once a child reaches the end of the taxpayer-funded, kindergarten/primary school/high school conveyor belt, decisions have to be made about the need for post-secondary education altogether. (P.S.: Taxpayer dollars pay for that, too.)

Even if his or her degree were paid for in full before the first day of lectures, the newly minted undergraduate or postgraduate is going to have to earn a living, especially if he or she is among the 40 million students south of the border who have US$1.2 trillion in student loans to repay, or the Canadians who owe between C$25 billion and C$50 billion. That money is going to have to come from somewhere. What about the cost of living? Will there be a new home or car to finance? Will there be enough money to pay the rent or buy food?

Finding work to pay for those things is the elephant in the room. Regardless of how many organizations the new graduate may have joined or voyages of self-discovery he or she may have gone on, if the résumé intended to support his or her application for that first full-time job is rejected by applicant tracking software for lack of key words and phrases, we have a problem. If the problem can be traced to a poorly executed résumé, the oversights can be corrected. But if the academic qualifications are wrong and creativity falls short of compensating for it, the only cure may be to spend 4 more years earning an education that will sell, but only after an in-depth reassessment of personal goals and what the economy needs.

As a country, we can’t afford scenarios like that because a mind is a terrible thing to waste (©UNCF). If you read or listen to nothing else today, please click on and ponder Robots Vs. The Middle Class (Bloomberg Businessweek, May 25 – May 31, 2015) and listen to Terry O’Reilly’s The Internet of (Marketing) Things (Under the Influence, CBC Radio One, Saturday, May 30, 2015). You’ll want to pay particular attention to O’Reilly’s thoughts about the Apple Watch.

How different is today’s economy from your grandfather’s economy? Well, did you ever doubt for a moment that your first job would be full-time with benefits? Are you doing now what you were planning to do then? Are you employed full-time? Have you been unemployed as a result of downsizing or outsourcing? Knowing what you know now, what would you do differently?

Would your grandfather recognize a world in which China is the world’s manufacturer, where 50% of working Canadians of all ages are not employed full-time, and where the price of post-secondary education is higher now than at any other time in history? What about a Canada where manufacturing has been decimated while employers continue to complain that they’re hard-pressed to find certain kinds of workers yet most of them refuse to train? What would he say about a Canada where $500 billion is sitting idle while vote getting corporate tax breaks underwritten by your tax dollars and mine go unused?

The North American work force is resolving itself into two camps: the one that recognizes that this isn’t your grandfather’s economy and is adjusting its expectations accordingly, and the one that doesn’t. One refuses to take career and labour market information at face value until they’ve confirmed it independently with multiple sources with their own eyes, not once but several times. The other doesn’t. One studies industries, market trends, the impact of technology and the performance of employers because they recognize that large numbers of dollars are at stake, not only the ones they’ll spend acquiring the necessary education, but the also the ones they risk not earning by failing to do their personal due diligence. The other doesn’t.

The economy is the financial air we breathe. We ignore it at our peril. Since 2001, I’ve met face-to-face with 2130 working people who, five minutes before I walked into the room, lost a job they thought wasn’t at risk. Most of them believed that where the world is going didn’t apply to them. They were mistaken.

F. Neil Morris
President & Founder
Personal Due Diligence
+1 (905) 273 9880

Risk is free, risk-free costs

Enough said.

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!

What are we worth and how do we measure it?

If your first instinct was to answer in terms of bank balances, stock market portfolios, real estate, investments, retirement pensions and the like, you proved how right Professor Philip Roscoe was in his book I Spend, Therefore I Am: How Economics Has Changed the Way We Think and FeelIt says a lot about the world we’ve leaving to our children and what they need to understand about it.

 

From Maclean’s, March 17th, 2014
WHEN THE PRICE IS RIGHT by Brian Bethune
Economics is so mainstream, we can put a value on a kidney, and even the donor’s worth

In 2006, economist Nicholas Stern made a series of alarming predictions, in a report commissioned by the British government, of the potential results of a worsening climate. Among them were the extinction of up to 40 per cent of all species, 200 million climate refugees—many of them ominously gathered on Europe’s collective lawn—and “an average reduction in global per capita consumption of at least five per cent, now and forever.” Stern has been roundly berated in the media ever since, particularly over the refugee projection, but the actual debate in the media was waged over the five per cent, and whether he exaggerated the cost of acting in the future while underestimating the cost of acting in the present.

For Philip Roscoe, professor of management at St. Andrews University in Scotland and author of the evocatively titled I Spend, Therefore I Am: How Economics Has Changed the Way We Think and Feel, the response to Stern was a perfect example of his book’s target: the triumph of the economic model. Once Stern introduced his own calculator and slide rule into his projections the argument could only be engaged on those terms: There is no market price for species extinction or massive refugee influx, so there was, in effect, no argument to be had. After a half century of measuring everything in dollars and cents and proclaiming how financial incentives control all behaviour, Roscoe says, “We lack the language to understand or even talk about issues in any other way.” What’s more, economic speech brings into existence what it postulates: “human beings as self-interested, calculative and even dishonest entrepreneurs of the self.”

Literally. Roscoe sees the reach of the economic model of humanity in the way suffering dictated by economic policy—the effect of the austerity program in Greece, say—is seen as “the wrath of God—inevitable, and in its inscrutable way, just.” But also, eight years after Stern, in the appearance of theoretical and even actual markets in human body parts.

Economic thinking—especially about private property—and notions of personal autonomy are closely intertwined, notes Roscoe. Autonomy is perhaps Western civilization’s supreme value today, the flashpoint between its prevailing secularism and its traditional religious faith. That quarrel has played out for more than half a century in a host of sexual issues, and more recently, in the growing acceptance of our right to die when we choose. Arguments against it that boil down to a gut feeling of “because it’s wrong” no longer have any traction. “Paternalism is the greatest of crimes,” says Roscoe.

And if death is an individual choice, a market in organs—a legal one, that is, for a black market already exists—may be inevitable. Roscoe suspects so, even as he marshals powerful counter-arguments. To start, he notes, there’s no reason to believe a legal market would not mimic the illegal one, in which, as he quotes an anthropologist working for the anti-trafficking organization Organwatch, kidneys flow “from south to north, from east to west, from poorer to more affluent bodies, from black and brown bodies to white ones, from female to male.” In Iran, the only country on Earth where selling organs is legal, the poverty of the sellers makes follow-up care rare for most, leaving them weak, unable to work and even more impoverished. “So what?” is the market absolutist’s response. It merely stands to reason that sellers would be poor and buyers rich—who are we to strip away the individual’s choice? Especially when the demand is so high.

Yet it’s a fallacy to think an open market would bring a supply equal to demand, Roscoe says. Consider the blood market, where paying for blood seems to have transformed rather than expanded the supply chain. “Blood sales, where legal, have tended to slow blood donations. They don’t wipe out the latter, though, so they don’t shrink supply, but blood sales don’t increase supply by as much as you’d assume, either. The California plasma market now works well, with regular sellers, but when it started it had lower-quality suppliers and higher monitoring costs.”

And that is where Roscoe feels himself falling into the very abyss he sought to avoid. Did he just make an economic argument against the monetization of human bodies? Once you’ve arrived at opposing an organ market because it would increase transplant costs, you’ve joined a continuum that includes those trying to establish a baseline price for organs. One American economist has made calculations—arbitrary, in Roscoe’s opinion— for the $15,200 price tag he believes would match up supply and demand: $7,500 for “risk of reduced quality of life,” about $3,000 for a month’s lost earnings during recovery and $5,000 for risk of death. Note particularly the income cut-off, Roscoe says—the model assumes those earning more than $36,000 a year wouldn’t be interested. The debate, he predicts, will focus on that sort of question— “how much?”—and not on “should we?”

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.