Tag: specialization

We Are All Specialists Now

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Apologies to Richard Nixon for paraphrasing his famous Keynesian quote.

Two years after starting a mid-career search, I remain impressed by the greatly increased emphasis on perfectly matching an individual’s professional and industrial experience to an open position.  Hiring managers, recruiters and HR managers have all adopted this approach.  This is partly because of the abundance of candidates and partly due to the risk averse environment caused by the slow economic recovery.  It is also due to the improved results of the “fill the bucket” approach to hiring where specific requirements are listed and then proven from actual experience and multiple interview responses.

However, I think there is something deeper involved.  Professional and industry specialization has continued to increase through time.  The discussion of outsourcing, virtual project teams and individual agents has died down, but these innovations have become a growing reality.  Successful firms increasingly focus on smaller niches of product, geography and comparative advantage.  Increased industrial and professional fragmentation is required for success.  The trend will continue.

How did I miss this?  As usual, paradigms act as blinders.  In high school in the 1970’s I was taught it was important to be “well rounded”.   At a liberal arts college, I learned that great minds and thoughts were academic, abstract and universal.  In business school, I learned that an MBA provided the necessary skills for a lifetime of career success.   I later discovered the competitive advantages of being a “general manager” from John Kotter’s influential work.

My teachers were correct in promoting the personal and professional value in developing broad knowledge, thinking skills and a professional base.   They did not foresee the modern world of global competition, where firms are forced to specialize and make economically rational decisions far beyond those envisioned by Adam Smith and David Ricardo who outlined these principles long ago. 

“General Managers” are now merely a declining specialization.   Some top-end MBAs with broad consulting experience can move from industry to industry and be successful.  A few individuals can specialize as “strategic advisors” to presidents.  But even in these fields, the trend is toward specialization.  Firms will pay for experts in a narrow tax, legal, technical or IT field only when in-house experts do not exist or others cannot complete a project well enough. 

Professional services firms have always paid lip-service to industry focus.  In the last two decades, led by IT firms, they now specialized by industry and technology equally.  Clients expect staff to understand their business.

Industrial and professional specialization will be required for future employment.   Individuals, firms and universities will adapt to survive.

Professional Branding

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Anyone who has searched for work in the last decade has learned about the importance of the 15 second elevator speech and fine-tuning their personal brand.

Many have rejected this sales and sound-bite oriented approach to career progress as being undignified, unprofessional and personally demeaning.   Most have learned that this approach is required for even a scrap of success.

Modern recruiters and counselors advise that “it’s not about you”.   It’s about what a hiring manager or screener are seeking.   A generalist brand, multiple professions, multiple industries or a complex story are deal-breakers.   Hiring agents are seeking an exact match.  A Swiss Army knife has no perceived value.

Job seekers are well-advised to network broadly, but to focus on opportunities with a clear match of experience to requirements.   Hiring managers want to be sure that professional skills and experience are solid.  Degrees, majors, certification and prior job titles provide 90% of the evidence.  It is a rare recruiter or hiring manager who will really dig deeply into technical skills.  Interviewers also know if they are seeking a specialist or generalist within a profession.  Candidates should tailor their resume, cover letter and answers to one or the other.  A state and local tax specialist is hired for very different reasons than a division controller.

Most businesses strongly prefer candidates to demonstrate mastery of a single profession, even for entry-level positions.  General management majors are handicapped in the job search.

In addition to being technically proficient, most firms want applicants to be dedicated to and knowledgeable about their industry.  There are many reasons.  Learning industry jargon, technology and the basis of competition takes time.  Industry veterans truly believe that their industry is different and special.  Sharp managers understand that turnover is lower for industry specialists.  Most industries have a well-established culture and a leading function (merchants, scientists, deal-makers, architects).  Like most clubs, they prefer to hire familiar faces.

A wide range of professional, industry and project experience is of great value within a firm.  Unless an individual is able to sell very specialized technical skills or are seeking work through a consulting firm, they must stay focused on a simple story line when searching for a new firm.  “Cost accountant – heavy manufacturing” sells well.  “Management accountant with project success in various industries” sends vague signals.

A specialized industry and professional brand is required today.

Too Much Specialization

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Companies are well-advised to temper their desires for a perfect professional and industry match in the hiring process.

For each opening, decide if a professional specialty is required, preferred or unimportant.   A senior avionics research engineer requires an exact match.  A senior process engineer might have a six sigma black belt, or not.  An entry-level tax accounting position could be filled by any accounting of finance graduate.

If a position has a clear technical career path, the specialty is more important.  If a position often leads to a manager role with broader responsibilities, the specialty is less important.

If the firm competes in a large industry like medicine or distribution, an industry experience screen makes business sense.  If the firm is in a niche industry like timeshare swaps, association management or oil drilling services, the larger candidate pool from a broader range of industries may be wiser.

Within a firm, some functions require more industry experience for success.  Product managers, product engineers and sales managers need to be experts in their field.  Support functions like IT, HR, accounting, legal and facilities may not require industry experience.  Most entry-level positions can be filled by trainees who are eager to learn.

If the firm is in a new, fast growth industry, then hiring from other industries may be a necessity.

If the firm is struggling to compete in an industry undergoing change, hiring from another industry may be required to insert world-class experience and lead that change.

In general, organizations have found that specialized professional and industry experience are good predictors of hiring success.   Adding a pinch of common sense will reduce the search cost and provide superior candidates in some situations.

University Industry Specialization

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There has long been a divide between liberal arts colleges, research universities and institutes of technology.  The gap between traditional four-year colleges/universities and commercial or technical schools generally remains. 

In a fifty year period of growing enrolments, our major public universities have become larger and more complex.  They have added colleges and majors.  They have increasingly focused on winning research dollars.  They have learned to compete for students.  They have nearly all adopted the same brand strategy focused on “academic excellence”.   The college ratings game essentially focuses on the ranking of entering student SAT scores.   To succeed, universities have improved their facilities, increased financial aid packages and developed programs that attract high SAT students.

State universities secure alumni and corporate funding so that they can compete with other highly rated schools.  State universities that were once positioned as teachers colleges, normal schools, agricultural and technical or urban universities all compete for the same academic rankings, investing in research labs, notable faculty and sports teams.  Some clever universities specialize in a few niche colleges like insurance, architecture, entrepreneurship or media.  They use brand excellence in a professional school or two as a substitute for higher rankings in the more prestigious arts and sciences.

Given the business world’s strong preference for industry specialization and experience, a more satisfying strategy for their students might be to specialize in a single broad industry.   Charter and magnet schools do this at the secondary school level.  Community/technical colleges often merge industry and professional skills into technical programs.  A few older colleges like agriculture still produce ag communications, ag business and ag engineering majors.

A university could adopt a broad industry like medicine, distribution, trade, communications, government/NFP, manufacturing, agriculture or financial services.  Professional and associate/technical degrees could be offered.   In addition, degrees in support fields like business, marketing, communications, finance, IT, engineering and science could be offered.  Courses could be developed to provide an industry overview, highlight industry firms, describe international opportunities and teach industry terminology. 

If state universities want to contribute to state level economic development, they could make an immediate and lasting impact by specializing by industry.

Talent Day

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As George Orwell demonstrated in his novels, words and word frameworks have tremendous power.  It’s time to replace Labor Day with Talent Day.

The term Labor Day reinforces several old misconceptions and needless conflicts.   Labor connotes physical labor, which became less important to the economy as energy and innovation moved the economic focus from agriculture to manufacturing to services to information.  Labor echoes the Marxian concept of class solidarity which has limited applicability in a dynamic world.  Labor is conceptually distinct from capital in the economic factors of production model, but the two are blended in many economic forms and their returns can be structured the same way.  Public sector (unionized) labor is contrasted with productive private sector capital in political ads, even though public sector employment is a shrinking share of the economy, supplanted by innovative contracting and outsourcing.  The old “labor” no longer exists.

Instead, firms rely upon a variety of human resource talents to succeed.  Physical labor or energy is the least important talent.  Hours worked or energy expended is a minor source of productivity and economic success.

Professional skills and knowledge have become more important and valued in all functions and industries.  Compare the skill levels of nurses, machinists, warehouse workers, purchasing agents, salesmen, engineers, maintenance technicians, auto mechanics, insurance adjusters, physical therapists, bankers or accountants today with those of 50 years ago.  Entry-level jobs today require professional, IT, process, quality and communications skills beyond those of master professionals in the post-war era.

The oddly named “soft skills” have also been upgraded in the last few decades.  In a world that is no longer static, mechanical and bureaucratic, all employees are required to have the skills required for a dynamic, organic and evolving workplace.  Individual character, responsibility and self-management is required.  Supervisors have been eliminated.  Research, development, innovation and improvement are expected of all employees.  Employees and contractors are expected to have teamwork skills, to understand processes that cut across functions and to manage constant change.

The human resources sector is also being asked to assume the risk management function once largely absorbed by capital.  With less labor intensive organizations, the role of financial capital is lowered.  With less employee loyalty, staff are asked to assume greater business risk of unemployment.  With greater outsourcing, contracting and narrow functional specialization in evolving technical fields, individuals are investing in skills with less assurance of ongoing usage.

On this Labor Day, let’s celebrate the value of talent in the new economy and the end of “labor” as a misused word and concept.

Personal Strategies for Adding Value

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The Great Recession has expedited the transition to a virtual labor market, where each individual is an independent contractor constantly in the market, selling their services.  To succeed in this world, individuals need to define their product, sharpen their sales skills, actively manage their time and add greater incremental value.

The 12 million unemployed Americans are bombarded with advice on defining their personal brand.  Setting aside the gloss and polish offered by career counselors, the remaining content is the need to be easily defined in a 15 second elevator speech.  Simple and specialized products sell.  Complex and generic products die.  Specialized professional functions and industry experience are marketable.  Generalists need to become repositioned with specialist labels: as entrepreneurs, six sigma black belts, project management professionals, etc.  Certifications are highly valued.  The “signaling” theory of the labor market is winning, with HR, hiring managers and recruiters all relying upon external signals such as certifications, national/Big 4 consulting experience, top 25 university/MBA degrees and Fortune 500 experience.  Personal communications and sales skills command a premium within the universe of certified professionals.

At work or as a consultant, the most important driver of added value is the allocation of time.  Individuals divide their time among the functions of doing, managing, investing, planning and reporting.  Stephen Covey’s path breaking “Seven Habits of Highly Successful People” enlightened a whole generation on this topic.  There is a critical trade-off between doing and other functions, which senior staff and managers must exploit.  There is a trade-off between urgent and important tasks at the heart of personal time management.  There is value in “sharpening the saw” by investing in activities with long-run benefits. 

The marginal product theory of labor value applies at work.  Individuals who devote their time to the highest incremental value activities at work are rewarded.  Those who do their “fair share” of low value activities are left behind.  Managing people, suppliers, customers, assets, risks and processes offers opportunities to leverage value.  Individuals with the greatest scope of authority deliver the greatest value and are rewarded.  Investing in people, products, processes and assets provides another opportunity to add greater value.  Strategic, functional, project and individual planning offers opportunities to leverage time in a more abstract dimension.  Developing, operating and enhancing reporting and feedback systems allow key staff to identify enhanced improvement and risk management options. 

Individuals who have managed to define and sell their personal branded product and secured significant opportunities to deliver value must also know how to deliver incremental value.  There are seven generic strategies for adding maximum value.

Buy low and sell high.  All activities must be delivered by the lowest cost resource.  If there is any individual, machine or supplier that can deliver a service more cheaply, eventually they will.  Identify the lowest cost resource and employ it.  Delegate.  Divide jobs.  Outsource.  Automate.  Simplify.  As Andy Grove once said, “only the paranoid survive”.  Get this done before others.

Match skills and talents to assignments.  Functional skills, industry experience, soft skills, courage, flexibility, creativity and other talents vary greatly across available resources.  Identify the 3-5 key talents required and employ those with natural talents.  Employ personality profiles, test results and Gallup Strengths to find matches.  Create an internal labor market that encourages staff to know and apply their talents as often as possible.

Leverage the cumulative positive impact of process engineering.  Call it TQM, ISO 9000, six sigma or lean manufacturing.  Employ incremental continuous process improvement, tactical Kaizen blitzes, re-engineering projects, management systems and cultural changes to obtain the maximum value from the quality revolution.  World-class firms continue to improve and leave others behind.

Leverage the benefits of learning curves in all activities.  Individuals with one year of experience may be twice as productive as trainees.  Those with three years of experience may be another 50% more productive.  Reach mastery level in critical activities. 

Create synergy through cross-functional project teams.  There is a limit to the returns on the first four strategies.  Eventually, a senior financial analyst, research chemist or national accounts manager will find incremental improvements more difficult to achieve.  For some projects, processes and functions there is a need to combine the highest talents of complementary functions. 

Leverage the unique assets of the organization.  Firms have core competencies, intellectual property, cultural assets, brand assets, relationships, best practices and most productive assets.  Sales or product growth in adjacent space has a high success probability.

Leverage the organization’s goodwill with stakeholders.  Suppliers, customers, regulators, investors, staff and communities have a vested interest in the organization’s ongoing success.  Provide them with opportunities to reinvest in the organization’s future.

Most of us will add the greatest possible value by following the path of least resistance.  We will leverage relative market values, talents, process improvement techniques, learning curves, teamwork, core competencies and common interests.  A self-aware, proactive strategy will pay the greatest personal dividends, while delivering value to firms and society.