Career Conundrums for the Young Generation

The other night teenage son interviewed the Propitious Manager as part a school project on career development. Teenage son is generation P (Pokemon and Harry Potter), normally uninterested in anything other than what can be conducted on-line or by text message (with the exception of loud guitars and amplifiers).

After traversing the ups and downs of dads professional pursuits ( and unprofessional pursuits – the idea that PM had once slaved as a kitchen hand for petrol and rent money posed a look of fear across teenagers face lest the same fate be in store) the inevitable question arose – ‘what advice would you give a young person about developing their career?’. This of course gave the PM a rare fleeting opportunity to pass some wisdom and guidance to teenager which would actually enter his brain, even for the moment it took to print the answer in the project book. Alas, however, I found the answer quite perplexing.

Back in the dawn of time (the early 1950’s) the PM’s father entered the work force in the days when one left school and sort lifelong employment with a respectable company (although PM senior went on a number of tangents during his working life). Years later during the ‘age of the oil crisis and heavy rock’ the PM began his career after some frivolous (but useful) years at university. With no real ambition other than to make some money and find a nice girl to marry, the PM’s career (to date) was one of opportunistic leveraging of a gradually expanding skill set across government and private industry (see about). This is the modern corporate career where there’s little long-term job security and and people cry job and skill flexibility and lifetime learning.

But hold on here – should I propose that teenager multi-skill – do a carpentry apprenticeship, followed by a degrees in technology and environmental science and perhaps a medical or law degree for good measure. With a bit of luck that should give him a varied enough skill set for the career flexibility required to leverage the job market over he next two or three decades. Of course the ideas of multi-skilling and multiple careers is perpetually popular but actually of limited value when one is talking about moving across trades or professions. PM’s career flexibility actually focuses around a few mathematical, psychological and business skills and some common sense. My career is largely variations across the same few themes, admittedly, applied in different contexts. I’ve known only a few people who have actually changed their professional career midstream – they could afford both the time and the money (no kids or working spouse) and putting up with post adolescent culture of a university (we should all eventually move on from there….) and then climbing the ladder – its too much for most.

Still, this has little bearing on my response to teenagers project, other than the conclusion that 99 per cent of folk could never afford or tolerate complete professional career change, and that diversifying in your main area of expertise is probably valuable. At the very least, opportunism is a good thing – but that involves attitude and behaviour – the ability to see and exploit situations, self-confidence etc.

Opportunism is probably closely related to entrepreneurship except that whereas the former finds and leverages the situation, the latter actually creates the situation and runs with it. Entrepreneurship is probably the greatest career asset of all if you happen to be really good at it. First you’ve got to have the idea, but then you have to have the charisma and fortitude along with basic business knowledge to get it to happen. There should definitely be more classes about Richard Branson and Bill Gates in todays schools – it would get young folk a lot further than messing with foreign languages or sport.

Anyway, as I monologued to teenager (this was an interview) I realized the basic problem was trying to figure out what the working world would look like in the next 30 years. Careers are a long-term concept – you study for years, work for years and finally you might reach a stage where you can contribute and influence. There may be some careers which will exist in 30 years, such as teaching, medicine or law but the life or many other products, services, industries and production methods gets shorter and shorter. For many people, there is a risk that their specialist skills will become redundant by changing consumer preferences driven not just by technology, but changing values as reflected in public policy such as environment protection strategies.

There is a lag in these changes driven by vested interests of those unable to accept change or seeking to preserve their employment. In the end the market place driven by technological change and consumer preferences of generations Y and P extinguishes them or the renitent protagonists grow old and retire.

So in the future, the only real hunch I have is that most jobs will continue to involve maths, language (communication) and ideas – the foundations of our modern economy as has always been the case. If you are highly skilled at these the you have a chance to make a contribution. After that it is about commitment to something (not necessarily that you like passionately), because when your committed, opportunities arise and ideas evolve. And of course you will always have to learn how to apply your skills to changing contexts.

This was OK for the project but of course seemed vague and pathetic to concrete teenager. I lamely suggested that for my fathers father the answer would have been simple: tidy yourself up and join a respectable profession or company. Back then it would have served him a lifetime of employment, today you might be lucky to last 6 months before your taken over or restructured out of employment.

Anyhow, its of little consequence. At present teenager is committed to being a rock star and we have a deal – you pass maths and english exams and I’ll buy you a new amplifier.

Is There a Business Strategy Left for the Music Industry Dinosaurs?

As I noted previously, its out with the old and in with the new for the music industry as the internet erodes property rights and the foundations of the entertainment industry crumble. I admit to having a fascination with this scenario, but it is a unique opportunity for whimsical postulation about the product cycle.

When post maturity decline is reeling in your product or business model your reflex is too kick and thrash wildly to try and unhook yourself from the inevitable end. Sometimes the hook breaks and you get away scarred – but when the change is structural (is an this case) another reel soon comes along with an even bigger hook. So if your a record company, its not surprising that you might try to use what capital and market power you have left to try and leverage your way into the new on-line world by doing deals with the major on-line providers to save your skin. But is it overconfident or courageous to invest in the new music world?

In fact, the evolution of the digital internet era and the demise of the pre-digital markets are moving at different trajectories. In the former case, its hard to predict precisely where things are headed as exponential technological innovation propels music making and marketing into the living rooms of millions of musicians. Last year it was iTunes downloads, this year its MySpace personal playlists. In the case of pre-digital markets the end of a product cycle is merely about wasting profits and capital on fruitless litigation – action which is akin to climbing Mt Everest with a broken leg. Large corporations in any industry tend to be very bureaucratic for several simple reasons, they have a lot of employees which a) they have to organize large groups of people in a cohesive manner, b) many of whom are pursuing their own political self-interest rather than cohesive operational interest within the organization, and c) who find it a lot more convenient to take a salary as an alternative to being entrepreneurial. These are necessary qualities when the corporation is operating within a mature and stable market. But not so flexible when the market is chaotic and evolving. The problem is that apart from trying to shut down the competition through litigation, the only other thing the dinasours can do is buy it, then shut it down or leverage it depending on the relative cost of closing the old or expanding the new. In the latter case there are two conundrums. First it is ambitious to try and predict the life-cycle of the new product. You could spend a lot of money on buying a new tech-based industry only to see it overtaken by something newer before you have leveraged it. Secondly, you can only buy a legal entity, and much of the competition has no legal entity (eg. torrents, peer to peer services etc.)

The is another problem. This concerns the fact that the consumers of digital internet products are largely generation Y, and the newer generation P – the Pokemon/Potter (of Harry fame) generation who are aged between 6 and 16. Generation P, even unlike their generation Y forefathers learn’t to manipulate Nintendo control’s at the age of 4 and can six finger touch type 40 wpm at seven years old. They are not consumers of iTunes, but of torrent, peer to peer networks and social networks. And here lies the real problem; they don’t pay, they’ve never bought a record album, or CD. Their parents might pay to download from iTunes but generation P doesn’t know the meaning of the word royalty and they don’t need too to get hold of anything from the 50 year back catalogue of rock and pop.

Corporate Fraud – Overconfidence or Incompetence?

According to a recent Viewswire article ‘Are overconfident executives more inclined to commit fraud?’ Wharton researchers, Schrand and Zechmand propose that overconfident executives may be at risk of being overly optimistic about future company performance. When events fail to live up to their expectations and the cost of their error impacts, they may resort to fraud as a means of covering up resulting business predicaments.

It’s an interesting if not common sense thesis. The idea that managers may find themselves in positions where they have badly underestimated the outcome of decisions is a natural consequence of taking action in in an unpredictable world. Overconfident managers misjudge the risk involved in a decision and may also have difficulty withdrawing from unfavorable situations. Thus they can end up in the deep end and turn to fraud.

From my reading of news reports of costly corporate fraud around the world it would seem many cases involve incompetence and recklessness. The failure of events to live up to expectations arises from flawed expectations – as I said, an inevitable consequence of taking action. But when the flawed expectations have a debilitating cost to the company, its usually a failure to assess or even understand the real risks involved in the decision. This behaviour seems to involve incompetence – that is a lack of skill or capability – as much as overconfidence.

Clearly, the incompetent person should never have been promoted to a position where they could be so unskilled. The question arises how they got there in the first place, and therefore calls into question the overall competency of the organisation. In effect, the poor decision was not the one made by the incompetent person but the person who actually placed them in the position where they could make the decision – or who failed to ensure policies and practices were in place to guide their work (if they broke these then thats a premeditated crime). How did they get there – nepotism, labor shortages, poor recruitment or promotion practices? Is their manager incompetent, or their managers manager?

The authors suggest that you are more likely to be over confident in complex industries. Sure, if your out of your skill depth then the more complex the industry the more likely you are to crash and burn. On the other hand if the industry is more complex, you need greater skill, greater care and more risk management.

One can’t help suspecting that there are a lot of companies out there face a problem of promoting overconfidence and incompetence. When credit gets tight and the bear market growls, poor risk business practices bring it to the surface. It can be a scary time for many CEO’s.

So where do you go to get some management and business strategy inspiration?

If your managing an entrepreneurial growing business or a subsidiary in a mature dinosaur, sooner or later your going to want to get some inspiration to propel your organisation.

For me, highest on the useless mumbo jumbo list is the special glossy magazines in the business papers – the ones that come out monthly or quarterly and have all the interviews with the CEO’s (do you really think their going to tell you their secrets of success, if they are?), page reviews of the latest management craze (refer below) and probably some economic data (last quarters CPI is a bit like todays weather in the evening news bulletin – why do I want to know this?).

But go into any sizable physical or Internet bookshop and you’ll find an abundance of books on management. At any point in time most of these will be books on the latest management craze with its buzzwords and breakthrough ideas – and there have been to many to count over the years. In the main I have always thought that the real value in management fad books is learning the jargon so you can impress more senior managers who are calling the shots. There is usually someone up the top of the organisation whose ability is defined by a blunt knowledge of the latest management diet, and if they have influence it can be career enhancing to at least know what they are talking about. Of course another benefit can be that if its a fad with some logic to it, it can wake everyone up, make them have a think about what they’re doing and sharpen their management skills and the business strategy. While thats generally a good thing its a by-product of the management craze itself.

Generally, popular management books come and go – companies have been process re-engineered, down-sized, KPI’d, TQM’d, made excellent, time-managed, matrixed and then teamed and learned, conglomerated and core businessed. My hunch is that the concepts are disposable in the majority of situations partly because of the rate of evolution in many business environments partly because they were of their time, and mostly because they usually involve roughshod untested ideas or hypotheses. Over the past 20 years the theory was often promoted before the research (if there was any) or based on the experience of a few mature dinosaur companies. The reliability and validity of the ideas was therefore quite suspect across different business contexts and it was often up to the individual organisation to test the hypothesis in their own back yard. By the time the strategy was starting to have an effect, a new CEO with fad is starting a new reformation, or market conditions, industry structure or product cycles had evolved. In some cases, the idea suited the organisation and became entrenched in the structure and/or culture, unknown to subsequent generations. But this was not always the case, and the only financial outcome was the profits in the consulting companies. I mistakenly use the past tense here, because show me a mature (dinosaur) company and I’ll show you a pot of gold for a management consulting company. To be fair there is some useful stuff but its often hard to determine whether its appropriate. Accordingly, you have to be wary of some nutty executives who without understanding the fragility of an idea, pursues it relentlessly.

Sometimes management ideas create useful and durable knowledge – for example, Michael Porter’s Five Forces framework or Kaplan and Norton’s Balanced Scorecard which took business performance measurement out of the Finance department and across the operation, customers and staff. Now the idea of a heterogeneous measurement system is part of the backbone of many large and mature businesses. This is stuff you should probably know and if you think about it periodically in the context of your business it can be enlightening. Another one I like is the idea of job satisfaction and retention and engagement productivity. While they are far from than scientific, they are reasonably relevant and useful in western business context.

Interestingly, the one place where some of the more sophisticated management hypotheses are scrutinized outside the self-interest of the market place and with some degree of rigor and sophistication, is academic journals. There is actually an abundance of research on so many aspects of management. However, there are a couple of problems with this as far as I can see. First, if your not enrolled in a university, it can be hard to access the material without paying third party providers (eg. Questia etc.), and you need a number of license services to cover the major journals. Secondly, the progress of investigation and thinking in academic land can be so slow relative to the speed of business, just because of the level of rigor that must be applied. Thirdly, because academics are removed from day to day business they have a tendency on occasions to wander down tangents which are no doubt interesting and relevant within a research framework but are merely self-fulfilling and of little community value or practical consequence. Fourthly, there is generally tons of jargon – most of it self-justifying and unnecessary. Be that as it may, there is a lot of useful knowledge hidden in academic journals and perhaps best of all, there is normally a pretty fair discussion of limitations. Mind you, you need to spend a bit of time using keyword searches and wading through a lot of documentation to find relevance.

One of my favourite resources is management textbooks (such as you might use in an MBA) particularly for organisational management theory, because they often provide historical and cross theoretical perspectives, as well as summarizing the research and the shortcomings. Even if they are a couple of years old, their cheap in the second hand bookshop and a better bet than the buzzword books unless you just want to impress one of the guys at the top.

I guess it depends what you want.