Career Success in the Age of Disruption

Published on November 23, 2009 in Updates. 0 Comments

The image of disruption, painted previously, should not be seen as particularly gloomy. Indeed, we must all stop seeing the economy in old fashioned boom-bust terms, an example of a norm no longer useful. Rather, it is more important to note which set of changes is bearing down on us, which arrives next and how shall we take advantage of the change, while deflecting danger.  That is, however, sobering in the sense that this response is a high challenge, requiring energy, focus, discipline, knowledge and insight. The tragedy lies in the legions who will  failed to rise to these new requirements, leaving them mere commodities to be sold at auction.

Yet for those who would respond aggressively to the challenge of change and disruption, a seductive argument lies awaits. Of course, you want to take action, the siren voice says; of course, you do not want to wait passively for disaster to strike. But the siren tells you that there is so much change coming so quickly, it is impossible to see ahead to a useful degree. So wait watchfully. When something is already happening, jump at it or away from it. Agility with a touch of eagle-eyed daring is a survival skill of the twenty-first century, it is said.

However, the suggestion that victory in this dynamic and complex world is reliably won by opportunistic pirates swooping down on passing treasure is absurd.

Of course, the lure of the argument is clear. It avoids the pain of intense thought or methodical research; it avoids looking into the future lest you see ghosts and horrors. Instead, the typical male can run around in circles and try to knock something down. That reaction, however, is now outside the slipstream of history.

Remember, no pirate ever built a city.

Inconveniently enough for the siren’s song, the future can be anticipated reliably and in useful detail. All it takes is a lens ground to a different focus, one that accommodates the tumult in which we find ourselves. This focus is far from new; it is however routinely ignored.

When all is roiling on the surface, the currents deep below still run true. Strike to those deep currents and you can feel the tides of history — one such tide is the force of the global economy.

The idea that there is now a planetary economy is accepted as almost commonplace. It is spoken 0f almost glibly. But while this single economy of ours is still in its early days, with parts of the world still omitted, other parts half committed and everyone cheating, the gathering force is near irreversible. And the consequences are certain no matter what else happens: rising competitive pressure.

The second great tide of history is the march of the machine. For millennia, we have substituted machines for human labour. As the machines became more capable, the substitution proceeded more quickly. And then the computer came — the most flexible tool humanity ever created. Obviously, this takes machine capability to a new level; obviously, few have noticed the consequences thus far. We will now replace people at an even faster rate than we did in the past. Moreover, when the army of software developers finally stops obsessing about the communication and marketing functions of a computer, they will inevitably turn their full attention to productivity tools. Imagine the effect of quadrupling, at least, the number of programmers and companies focussed on eliminating human workers.

Of course, the old argument that machines do not really destroy jobs in general will afflict us for awhile yet. For each job the machine eliminates at least another appears. These new jobs, it is said, represent the people who design, build and maintain the machines. But if these jobs equal those lost, why use the machines at all? The logic fails. It is true that the worker made available (unemployed) is a resource that can be applied to other work. And therefore most of the workers unemployed by the machines thus far, or who would have been employed if the machines did not already exist, have found jobs in new industries and new occupations. But such mobility was easy in the old gentle world of the past.

The standard of performance of all work had not yet started to rise so sharply. But as competitive pressures rise, the standard for all work rises and, for new work no less so. While society and its marketplaces could certainly create a new job for every job lost, it will no longer be automatic or easy.

Thus, the onslaught of job-destroying machines bears down on us and combines with the force of the global economy to drive competitive pressures ever higher and ever faster. And the inevitable disruptions and dislocations add further stress. The result could hardly be less surprising.

As the standard of performance expected of all of us rises and keeps rising, many more will fall to the periphery of society, with just enough to sustain themselves as they spend their hours immersed in the warm cocoon of the entertainment media.

But what does it mean to say the standard of performance is rising? We know what the typical responses are to it. Aspiring professionals increase their educational attainment. At least two degrees. With a selected professional designation, or two. Plus executive short courses for good measure. But how much distinction does this education provide when there are, today, at least 80 million university students enrolled on the planet?

Professionals, already employed, respond to rising standards by working ever longer hours. Yet as the workday lengthens, what advantage does this give anyone when all work the same hours? Moreover, this tactic is limited by the biological necessity to sleep and the inevitably deteriorating quality of decisions made on the run. Thus, if professionals do no more than educate themselves and work longer hours, these professional workers slowly becomes  commodity — available to the lowest bidder.

True, there remain pockets of protected professionals, who guard their monopolistic enclaves fiercely as they harvest abnormal reward. That they escaped scrutiny in the booming economy of the past is not surprising. In tomorrow’s more stringent world, that privilege becomes progressively harder to hide or to defend.

The accumulation of experience will appeal to many as their only hope for some sort of advantage. Older workers will hope that their experience remains an inherently impregnable barrier to the armies of the young. This assumes that their experience suddenly does not become obsolete, or that two degrees do not equal fifteen years on the job.

Younger workers, on the other hand, have a different hope — that experience will eventually earn them distinction. This constitutes a strategy for career success based birthday candles. The trouble is that everyone else keeps having birthdays.

Yet if education and experience are not enough for competitive advantage, what is left? Hope for the best? Hope that mother corporation will look after you? Hope that at least government jobs are secure? Expect that “the best” is likely to be barely okay? Or follow the thread of logic to its conclusion?

The global marketplace, the advance of machine intelligence and systemic disruption continue to drive up competitive pressures, which in turn drives up the standard of performance. There is no reason whatsoever to expect this process to abate.

Once education was enough for advantage, now it is not. Once education and experience were enough, now it is not. Only one capability is left to be demanded. Now the marketplace wants a worker to have new ideas, new solutions, new thoughts and new facts.

Knowing what is in the textbook is not enough to provide advantage since everyone knows it. Having experience is not enough when so many others also have it. Knowing “best practice” is not enough because the best is already being done. Knowing what others also know is not enough exactly because others know it.

Commanding advantage in tomorrow’s world accrues to the individual who knows something no one else knows, has an answer of which no one else has thought or has a solution that works much better than someone else’s. Will such a capability be an advantage forever? How could it not? Is it a punishing standard? Yes. Does the marketplace care that this standard is almost brutal? No.

Unfortunately, neither our society nor our schools are prepared to  train aggressively this highest of all skills, the one of which we can never have enough. Fortunately, there are steps individuals can take to nurture their innovative skills, to become elite trailblazers of the twenty-first century. (A detailed discussion of how to do so will be the subject a further post.)

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The Next Five Years

Published on October 22, 2009 in Updates. 0 Comments

The medium-term outlook for the economy is clearly coming into focus. And so too is that of society, bound tightly as it is to the pace of economic activity. While the latter point should be obvious, it is often overlooked. But the economy sustains and constrains most social activity and consequently the debates, policies and norms of society. Whether through  provision of a public service by government, a humanitarian act by a charity or a gardener in her backyard, all are affected by the economy.

There is near unanimous opinion that the economies of the mature industrial states will grow slowly, at best, over the next five years. China is expected to be the exception, with growth in the high single digits. The prospects for India appear favourable, but to a lesser degree that those for China. But that is the old story, less interesting than what slow growth portends.

Indeed, to speak of slow growth casually, without noting its implications, is almost misleading. Most economic and social challenges, whether high government deficits or an aging population, are made more difficult by slow growth. By contrast, inflationary risks are usually eased by slow growth, although they not be in the present circumstances. Nevertheless, on balance, slow growth must mean a high degree of economic and social stress. Solutions become more painful, timid initiatives are rendered ineffective and issues are delayed only to worsen. Courage will be in short supply.

Let us review quickly why growth cannot be more than slow. The financial industry in much of the industrial world has not yet fully reconstituted itself, with much debt yet to be written off. U.S. consumers, a key segment of the world’s consumers, are also struggling with high debt levels and an eroded job market. Of course, slow consumer demand produces slow growth which in turn slows employment growth subsequently killing consumer confidence. Many of the world’s governments are running high deficits that must be restrained. The issue is urgent in the United States and merely important in Canada. The central bankers remain anxious to withdraw the abnormal amount of liquidity that they have added to the system; their natural tendency would be to do so as soon as credible growth is underway. While consumer inflation may be moderated by slow growth, there is a strong concern that a surge of asset inflation awaits. In addition, currency instability adds to the burden of the global economy.

Against this backdrop, the systemic challenges facing the industrial world will remain to a large degree unaddressed. That in turn suggests continuing disruption, dislocation, waste of resources and waste of talent.

Regulatory “reform” of the financial system, much discussed is likely to have little effect. First, the proposals are far too timid to actually have their intended effect. In the United States many of them might not even be implemented. It hardly matters.

Of course there are changes that could have a dramatic effect but there is no determination, never mind discussion, of these alternatives.

The cynics suggest that boom-bust is impossible to halt, an inherent characteristic of human behaviour. That would mean that humanity is inherently stupid. But that argument merely demonstrates the stupidity of its proponent.

As a result, the next bubble is already gathering force.

Most of the major governments of the industrial world, having had their economies savaged by the financial meltdown, are now being forced to reduce public services. Spending on education can be expected to fall on real terms. This is hardly surprising given that we live in a dark and primitive world where the values of education is recognized only by a few. Services for the vulnerable will also decline and spending on health care will be under intense pressure. With retirement plans under siege, there are limited public resources to respond. Older workers will have little choice but to stay in the labour force longer than they had intended.

As the environment becomes meaner, expect consumer confidence to remain at risk. A weak consumer confidence inevitably affects the confidence of those who invest in expanding productive capacity. (These real investors should be distinguished from financial investors whose investment decisions are often disconnected to any reality whatsoever.) These issues are especially acute in the United States.

In addition, there are few signs that structural imbalances both in the United States and China are going to be addressed. The U.S. remains reluctant to re-balance the commitment of resources from private to public purpose. So for the foreseeable future, the United States will draw on the resources on other countries to avoid making difficult choices. China is equally reluctant to restructure its unbalanced economy. It continues to fake its exchange rate, keeping it below the market rate to bolster its exports in the face of slow global demand. But it cannot drive its high growth on the back of manipulated currency markets and infrastructure spending indefinitely.

For the moment, Chimerica continues its unsustainable jig, albeit at a slower pace. Further advances in global trade are unlikely. Most of our attention will be diverted to stopping the inevitable outbreaks of protectionism.

Resources for innovation will be in short supply. That and pervasive caution will limit the advance of innovations and thus the associated economic stimulus.

The young will struggle to find meaningful employment. The older will keep working under greater stress, for even longer hours and limited real income gains.

Taking these factors together, it is difficult to expect other than future disruptions, as a system fractures under unaddressed stresses.

Some voices will look at the progress made (and progress will have been made) and describe the disruption as yet one more interruption in our upward path to prosperity. Others will look at what could have been and see calamity. While the age of radical change is upon us, the game has yet to be played out.

However, as is often the case, for those of rigorous mind and strength of heart, great opportunity awaits. All the major players are vulnerable. The trail of an epoch-changing comet is visible in the sky.

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Obama’s Great Mistake

Published on August 12, 2009 in Updates. 0 Comments

While Mr. Obama is in most ways the polar opposite of the previous occupant of the White House [a person whose name I shall never speak again], he shares with him one common attribute. Mr. Obama acts, like the previous occupant, as if America can do anything.  And do it at once. 

This belief is of course a touchstone of American culture, if not its identity.  This is the land of open skies and unlmited opportunity, the land of the impossible dream. This is a land where a black man can become President of the United States. If only it were an office of real power!

The presidency, we must remember, is an anomoly among the mature democracies. The founding fathers, so suspicious of power, checked and balanced it into little more than a stage for speech-making. While the president can send troops into foreign lands almost without real constraint, domestically he can only preach.

While Mr. Obama certainly can preach, who can hear him over the frenzied screams of his opponents? In the poisoned atmosphere that passes for political debate in America, no charge is too unfouned, no rumour too absurd, no lie too audacious. And Americans are greatly concerened about public debt, just not their personal debt, of course. Add fear caused by recession and mix with anger. Thus Mr. Obama is placed on the defensive.

Mr. Obama’s great mistake was to do try to do everything at once: fight the recession, create jobs, reform education and social security, and extend healthcare. He also left such little details as paying for it to the future. All  too American, one might conclude.  Like the previous occupant, Mr. Obama is unwilling to tell Americans that their taxes must go up and their personal standard of living come down.

As a result his administration is vulnerable to the hysterical objections of his opponents and his domestic agenda is at risk.

Instead, Mr. Obama should have concentrated on fighting the recession.  Then as the economy revived, he would have taken credit for the recovery. His overriding goal should have been to crush his political opponents, sending the right-wing crazies back to the fringe where they belong.  He should have branded them with the stigma of financial imprudence, true as it is. Now they  hurl the accusation at him.

He should have remembered that he just barely won the election, against an old white guy and his idiot running mate. He needed to reinforce his political high ground.

There may still be time for Mr. Obama to gain the offensive. But with more caution.

Yes, we can! Actually, no you cannot.