http://www.latimes.com/news/nationworld/nation/la-na-obama-drilling31-2010mar31,0,4617559.story
Creating a “jobs boom” is within the power of the government if the legislators and president are ready to create confidence in the government and economy, incentivize job creation and business investments, make a long-term commitment to transportation/energy and stimulate the government and not-for-profit sector.
Confidence in the Future.
1 Start the process to set a constitution maximum marginal tax rate at 50% of income.
2. Start the process to set a constitutional maximum spending limit for all government budgets at 30% of GDP.
3. Drastically simplify the federal tax for incomes below $200,000, maintaining the current level of progresseness and number of tiers.
4. Eliminate the corporate income tax, replacing lost revenues with personal income tax rate increases at higher incomes.
5. Complete a health care cost reduction bill, based upon cross-state insurance competition and limits on lawsuits.
Direct Job Incentives.
6. Move the full benefits social security retirement and medicare age up 2 years for 2010-2011.
7. Allow direct tax expensing of all capital investments for 2010-2012.
8. Provide firms with 50% tax credits for hiring college graduates in minimum wage, full-time internships.
9. Provide a $10,000 tax credit to firms for hiring engineers and IT professionals in project positions.
10. Sign the country to country free trade agreements that are ready.
Investment Incentives
11. Increase the life of patents and trademarks by 5 years.
12. Allow direct tax expensing of all capital investments for 2010-2012.
13. Cancel 25% of federal regulations within 90 days and 50% within 6 months.
14. Improve the value of tax loss carryforward benefits from business losses.
15. Fund the property acquisition in 10 cities to stimulate blighted area development.
Long-term Transportation/Energy Direction
16. Make a 3 year commitment to continue the stimulus level of funding.
17. Loosen the energy regulations for offshore drilling and nuclear power.
18. Select one national highway project, such as I-69, and commit to 7 year completion.
19. Make a 10 year finding commitment to the high-speed rail network.
20. Create a carbon tax scheme for the next 2 decades with a 10% per year transition to full effectiveness.
Government and Not-for-Profit Effectiveness
21. Loan states the money to start independent board governed rainy day funds.
22. Privatize Fannie Mae and Freddie Mac quickly.
23. Privatize large state and federal agencies: post office, licenses, air traffic control, and community colleges.
24. Allow first $10,000 of charitable donations as 50% tax credits.
25. Tighten inheritance tax limits, but allow doubled charitable deductions.
Any ten of these easily understood policy changes would jump start the economy, benefiting everyone.
As firms return to a normal economy where success is determined by the ability to set and implement a distinctive strategy, develop new products, processes and customers, and align functional resources in a project based matrix structure, it is time one again to screen for leadership in the hiring process. For the last 2 years, with an abundance of candidates and a preference for risk aversion, hiring managers, human resources and recruiters have laser focused on finding the very best match between a candidate’s industry, functional and positional experience for an open position, without regard to long-term considerations. Hiring managers should insert more behavioral interview questions about leadership into the process and they should screen for evidence of leadership success in the resume review and screening interview process.
Ask ten experts to define “leadership” and you’ll get ten different answers and lists of competencies, but they’ll cluster into a few areas such as building teams, being self-aware, growing personally and professionally, displaying trust and integrity, communicating effectively, motivating/influencing/persuading, helping others to succeed, setting and sharing a strategic vision, taking risks, innovating, being responsible, making tough decisions, showing tenacity and taking a long-run view of what is best for the organization as a whole. A simple leadership checklist can be used to identify candidates who have the leadership experience needed to succeed.
Leadership Screening Checklist
1. Positional responsibility, staff count, manager count, functional variety.
2. Cross-team member, positional leadership, selection by others, larger projects.
3. Non-work leadership roles, professional and civic groups.
4. Progressively responsible roles and promotions across career.
5. Professional mastery/certification and CPE in one or more areas.
6. Five year tenure at most employers.
7. Variety of recommendations available/given in 360 degree fashion.
8. Internal or external teaching, training and documentation experience.
9. Projects/assignments in new, challenging or unpopular business areas.
10. Projects/assignments in high value, visibility or risk business areas.
11. Matrix experience in product development, IT, M&A, national account management.
12. Formal mentoring, association or accountability partner experience.
13. Strategic, product, marketing, financial or operational planning leadership role.
14. Top-level responsibility for a function or business unit of any size.
15. Variety of headquarters/field, line/staff and domestic/international experience.
16. Variety of industry, function and organization size experience.
17. Change management experience through start-ups, rapid growth, turnarounds, recessions, acquisitions or reorganization.
18. Implementation of new professional methods and technologies.
19. Human resources recruiting, retention, promotions, transfers and morale.
20. Responsibility for new products, sales, suppliers and negotiations.
Organizational success today requires leaders who are experienced and confident in challenging and ambiguous environments. Screening for this broader experience and capacity may be more important than hiring someone who has done exactly the required role at the closest competitor for the last five years.
Between October, 2009 and April, 2010 the US economy lost 4.8 million jobs: nearly 700,000 jobs per month. In the last three months it has lost a TOTAL of 100,000.
How and why employment will recover faster than expected.
There are certainly national and global risks in the current economic climate. However, the US economy has shown increasing resiliency in the last 60 years, recovering from recessions in spite of a variety of headwinds. The economy has recovered during Republican and Democratic administrations, in spite of helpful and harmful national policies. There are many reasons to believe that the current recovery will be strong.
| US Employment by Industry | ||||
| 1998 | 2007 | Change | Pct | |
| Extraction/Utilities | 2.3 | 2.5 | 0.2 | 9% |
| Construction | 6.2 | 7.6 | 1.4 | 23% |
| Manufacturing | 17.2 | 13.7 | (3.5) | -20% |
| Wholesale/Retail Trade | 18.1 | 19.8 | 1.7 | 9% |
| Transport/Warehouse | 3.9 | 4.3 | 0.4 | 10% |
| Information | 3.1 | 2.9 | (0.2) | -6% |
| Finance/Insurance | 5.4 | 6.0 | 0.6 | 11% |
| Real Estate | 1.7 | 2.0 | 0.3 | 18% |
| Profl, Bus, Adm Services | 21.2 | 25.0 | 3.8 | 18% |
| Education | 2.0 | 2.7 | 0.7 | 35% |
| Health Care | 11.2 | 14.3 | 3.1 | 28% |
| Arts, Entertainment, Recreation | 1.4 | 1.7 | 0.3 | 21% |
| Accommodations/Food | 8.1 | 9.4 | 1.3 | 16% |
| Other Services | 5.3 | 6.0 | 0.7 | 13% |
| Government | 18.7 | 20.2 | 1.5 | 8% |
| 125.8 | 138.1 | 12.3 | 10% |
“A rising tide lifts all boats”. When economic progress is steady, or at least not interrupted for too long, this saying seems to hold true. When everyone benefits from progress, people invest their effort into getting ahead. Today we face the greatest economic disruption in 75 years. Without a clear path forward, people of all political views are turning their thoughts enviously towards the boats others. International trade, labor, spending, health care and tax policies are all being reviewed through the lens of protecting current advantages or redistributing funds.
The classic focus of redistribution is on the “rich” and the “poor”. Bankers and corporate executives have lost the “entrepreneurial” and “value added” shields of the last 30 years. Citizens are now concerned about the distribution of income and are willing to consider tax and regulatory changes that would have been unthinkable a decade ago.
The share of income captured by the top 1% of earners receives the most attention. From 1917-1941, through boom, bust and preparation for war, the top 1% earned 15% of all income. This changed dramatically during WWII and afterwards, leading to a 35 year period from 1953-1987, where income at the top was cut in half, with 8% of the total going to the top 1%. Top 1% income grew rapidly in the late 1980’s, reaching 13% and then 15% by 1999 and 17% by 2007.
The spread of income within the center of the population has also broadened in the last 40 years. In real 2007 dollars, average household income has increased 30% since 1967, from $40,000 to $52,000 per year. Families at the 20th percentile have also seen a 30% increase, rising from $17,000 to $22,000 per year. The dollar and percentage growth at the higher percentiles has been much greater. Households at the 80th percentile have gained 55%, with incomes rising from $67,000 to $104,000. Those at the 90th percentile have gained 66%, boosting incomes from $85,000 to $141,000.
There is no “natural” or “optimal” distribution of income. The US has historically had a greater concentration of wealth or income than other economically advanced nations. As shown by the top 1%, the concentration can change dramatically through time. However, most economists agree that there is a level of marginal taxation on income, wealth, dividends and capital gains that significantly reduces incentives for hours worked, innovation, risk taking and entrepreneurship.
Small changes to the taxation and incentive structure of the US economy are not likely to cause too much damage. Significant tax increases could do significant short-term and long-term damage to the economy and to those at the lower end of the economic pyramid who depend upon the rising tide to lift their boats in the long run.
In a world of non-stop change, financial managers agree that “alignment” is the most difficult challenge faced by most organizations. Through time, more equal access to all other resources has grown: materials, suppliers, facilities, financing, technology, products, entrepreneurs and human resources.
Organizations have used a variety of methods to create alignment. Military command and control, strategic planning, portfolio management and process management in various forms have been tried with mixed success. In some static environments with less technology change, less competition and simpler processes, these approaches have worked well. In the highly specialized, global, decentralized, changing, virtual world of today, many organizations have concluded that alignment can best be achieved through defining, shaping and reinforcing their corporate culture.
A critical element in any corporate culture initiative is helping all staff members to have the self-awareness and other-awareness to manage their relations with others.
My favorite introduction to self-awareness and paradigms is through the fable of “The Blind Men and the Elephant”.
http://www.peacecorps.gov/wws/stories/stories.cfm?psid=110
Individual blind men conclude on the basis of their personal investigations that an elephant “IS” a wall, a snake, a spear, a cow, a magic carpet or an old rope. The moral is that an elephant is more than the sum of his parts. Attempts to generalize from limited information or paradigms are doomed to failure. The blind men can see neither the forest, nor the trees. Many individuals have these same blind spots. They are unable to see the big picture and they passionately hold onto their world view because they are not aware of the possibility of another approach.
To help staff members with the personal growth needed to overcome this limitation, many organizations implement a personality styles program. Myers-Briggs, DISC, Predictive Index, Gallup Strengthsfinders and a dozen others can be used to help all staff understand a few key results and begin to practice seeing the world from multiple perspectives, even forming the habit of expecting to employ multiple perspectives.
These programs deliver 5 main lessons. Individuals tend to behave in their own patterns or styles, which can be described. No pattern is inherently better or worse, except as a means for completing certain responsibilities. Personal styles make individuals especially effective in functions (accounting, sales, design, or engineering) that match their natural talents. Individuals are not limited by their styles, but these habitual behaviors are more natural and using other complementary styles requires significant effort. Since organizations have many functions and individuals with different styles, it is necessary for all staff members to be aware of their styles, recognize the styles of others and learn how to flex their styles to get along with others.
Since these programs have been implemented many times in most firms across 30 years, one might expect that self-awareness would be the norm, followed by cross-functional cooperation and sophisticated used of different perspectives. Unfortunately, many of these programs have not delivered the desired results.
For personality styles programs to build self-awareness, complement corporate cultures, align teams and deliver results, firms need to invest more resources.
1) All managers, beginning at the top, need deep training, evaluation and feedback.
2) All staff require experiential learning, examples, reinforcement and consistent guidance.
3) Firms need to use the tool everywhere to create the skills, habits and expectations: training, hiring, promotions, cross-teams, planning, performance evaluations, etc.
4) Firms need to break down the functional barriers and require a mix of styles in each function, job rotation for managers and cross-team experience for everyone.
5) The personality styles tool, profiles and understanding needs to become part of the culture. This is the language we use. These are the stories we use. These are the executives we use as examples of this style.
Invest the resources to create a real asset for your organization. Half of an investment produces little return.
After 18 months of hiring freeze, it’s time for all profit-maximizing firms to kick start their recruiting. At present, we’re hiring too few, we’re too focused on exact hiring matches and we’re unwilling to invest in the future.
The recession was first sensed by wise businesses in 2Q 2008. The banking crisis of Fall, 2008 terrified even those whose careers went back to 1974-1982 when the last panic of gas prices, inflation, interest rates and Japanese competition derailed the post WWII expansion. While the freeze and risk-averse decisions were justified at the time, they are wrong today.
The all-in cost for a senior professional staff member is roughly $100,000 per year. A good hire lasts for up to 10 years. A typical hire is a $1 million investment. In the current environment with 16M candidates chasing 3M jobs, the odds of finding a great candidate are excellent and the ability to hire at 20% below old market salaries is a given. Firms with a strategic view of human resources should be first in line to hire these high ROI assets – TODAY. Every good hire is a $200-300,000 addition to the firm’s net worth.
There is little joy in HR departments these days. Hiring volume is down so the pressure is on to reduce HR staffing and to NOT use external recruiters. The volume of applicants per position has quadrupled. HR’s ability to use on-line application forms and screening tools has improved, but not enough. To cope with the excess supply, HR and hiring managers have decided to make an exact match of past experience by industry and function to the position the penultimate criteria for hiring. This allows the greatest percentage of candidates to be eliminated in the first screening.
Unfortunately, this means that many qualified candidates are not considered. Narrowly experienced and over-tenured candidates are favored, even if they have had the same experience for 8 years in a row. Firms pursuing this approach will soon find that they have hired adequate candidates who have limited upside potential. They are also likely to find that they have made many “hiring errors” because they have not given equal weight to the questions of personal motivation/drive and teamwork/manageability. I recommend Martin Yates “Hiring the Best” as a guide.
Firms that continue in “hiring freeze” mode have a bias towards replacement of existing positions versus investment in the staff who deliver future value. There are thousands of highly skilled project managers, business analysts, scientists, quality specialists, product managers, marketing researchers and other professionals who are unemployed because firms are unwilling to restart the investment cycle. This recession will end and success will depend upon investing in new products, new customers and better processes. There may be some areas where NOT replacing a separated employee is the right choice. Successful firms make decisions one choice at a time rather than relying on simple rules.
Firms that have their financial house in order need to race to the labor market while supply exceeds demand and hire skilled, motivated team players to pursue the next cycle of business investments that deliver long-term value.
Good News 