Ruminations-People Just Don’t Want to Work

In one of my text group chats with some friends, the conversation on remote and live work evolved into a discussion on people not wanting to work, how it impacts our economy, and our society. I thought that trope had died when the unemployment benefits that was enacted as a response to the  COVID pandemic ended, and yet the job market remained wide open. The inference there is that people are willing to not work in order to find better work because the crutch that some have assumed is propping them up had gone away.

Indeed, the media has started to call the phenomenon: “The Great Resignation”. By the reports, and many anecdotal stories that I had pieced together, workers, especially in the service industries had time off, initially without any unemployment aid. In that time off they had reflected upon the state of the labor-management relationship. It surprised me to learn just how many people are living hand to mouth, without health insurance, benefits, a steady work schedule and by that implication: without a steady week-to-week income. It made many of them rethink and reconfigure their expectations of the future. It took the involuntary time off from the grind to realize that they were in a grind. Many took advantage of the unemployment to restructure their goals and started to look for more permanent and secure jobs. Jobs that can turn into careers. I would not call that not wanting to work or by implication, laziness that permeates throughout the work force. I would call that working to make the American dream come true, pulling themselves up by their bootstraps, to use a well-worn cliché of the haves of the world.

Turning the lens towards the reason that people would question the intent of the workers who had decided to change their lives, I thought about why would anyone think in this manner? It does not come from a place of empathy for our fellow citizens. Indeed, it is also lacking the inherent thought of: there but for the grace of God go I. I then thought about the framework that created this thought. The thinker of the thought framed it as a matter of us against them. In the context of the initial discussion, it was comparing and setting an adversarial frame of  the low age, not highly educated, blue-collar workers versus the higher wage, highly educated, white-collar worker. The disconnect is that despite the initial assumptions, both sets of workers are workers, some may have a say in the management at their workplace, but in the end, we are all workers working for the company. So, the disconnect is evidence of an interesting prism by which some workers view others. In a away it reaffirms the suspicion that the upper management manipulates the middle management to antagonize the workers in order to maintain control of the hierarchy, while the middle management and the workers are happily warring against each other unconscious of the intent. Indeed, that is quite  bit of conspiracy theory, but the scenario is not so out of the realm of possibilities to contemplate.

In a bit of irony, if not outright hypocrisy on the part of society, is that these very service workers were lauded if not worshipped as heroes and essential workers when the rest of society needed them to stay at their work in the middle of the pandemic to serve our essential needs. We, being  in the uncomfortable but safe quarantine at our homes, while they are exposed in the open to the unknowns and dealing with a much higher probability of infections. For all our laudatory rhetoric, many of the essential workers received temporary boosts in pay and media exposure, but as soon as it was deemed expedient, those boosts in pay stopped and the wages went back to pre-pandemic levels. How would one process this whiplash change in attitude? Once they were celebrated, and just as suddenly, they returned to being anonymous, disposable, and made out to be an example of what not to do. I would say that a great resignation is a logical step if they wished to advance themselves in this society.

During all this time, the inviolable assumption, the bedrock of our belief, is that the business model that has existed is the only one that makes economic sense; that the only way for the service industries to make enough profit is the status quo. As the recent employment market and its attendant effect on our economy has shown, the key to giving service to the customer is through the workers, and yet people hang on to the old paradigm because that is all they know, and no one has thought about creating a new business model which would give the service workers a living wage. I remember when the talk of a $15 an hour minimum wage was scandalous, and yet today we have corporations who own fast food franchise raise their pay to $17 and $19 an hour just to attract workers. Maybe the old business model was erroneous or driven by greed? Or the employers were disingenuous? It would be interesting to see if the employers would have the greed to drop the wages if and when the employment needs ease, or would they keep the adjustments they made to their business model which enabled them to make profit despite the rise in wages in place.

One of my friends on the chat brought out the fact that his industry is paying excellent wages and still they were having difficulties attracting workers. I wouldn’t hazard to guess at the reason. I don’t know the skillsets they require of their workers, and I don’t know the micro-economics of that particular industry. Perhaps those workers are also having a revelatory moment in their lives, perhaps they are restructuring their plans for the future, I don’t know. I do know that the Great Resignation is happening across the board. Many of my highly skilled, highly educated, and highly compensated friends are changing jobs recently. Maybe they are taking advantage of the reversal in the relationship between employers and employees. The advantage is with the employees now, who knows when that would reverse itself again, so it is better to strike while the iron is hot rather than wait. The truth is that history has shown that the employers have no compunction about going back to depressing wages in their efforts to maximize profits. No empathy wanted or needed.

Another initial assumption by employers is that money is the sole motivator for the employee, that everything can be resolved if more money is offered. I am not going to be ridiculous and say that money does not matter, it does. But it does not matter when compared to other things. In our society we value human dignity, or we say we do. We are not as good at showing what we value as we are at talking about it. Talking about valuing human dignity does not translate to showing. Remember the whiplashing of wages that I spoke about for the essential workers? How demeaning is that? We will pay you more because you are putting yourself in the line of fire, and when you are not in the line of fire, we won’t pay you. Is it any wonder that they are not going back to that particular industry?

How about security, stability, means to plan for a future. It is impossible within the existing economic system for the service workers to  live and build for a future, any future. If they are lucky, they can tread water; by lucky I mean work multiple jobs and not become ill.  Is it any wonder that they want to leave this grind?

Another irony I wish to point out is that those who are in business ceaselessly admonish that we need to let the free market work its magic, that the invisible hand would inevitably restore the balance, yet when the free market is working against their interests, they balk and complain about those people who are the foundations of their companies and our economies, the front-line workers. Maybe it isn’t the people that is the problem, maybe it is the economic system.

The pandemic has shown that the present system is fragile to a fault. While the system may be able to withstand minimal perturbations, something as large as the pandemic and the resulting unintended aftereffects have effectively sidelined what we believed to be indestructible.

So now what? We can wait for the wave of uncertainty and its lingering effects to subside, if it subsides. Or we can reinvent our business models and processes, taking care to design in anti-fragile features and learn to adjust as the situation warrants. The former is the hold on to what has always worked model even though the reality has evolved away from historical precedent, the latter is the make stuff up as we go along model even though we don’t know what will and will not work in the long term.

Management Follies-Manager Hubris

One of the biggest lies perpetrated upon businesses is that managers — people who run the business — don’t need to understand the product or the internal processes. Many who are in the business of running businesses firmly believe in this lie and because cynically, they want this lie to be propagated throughout the commercial world so that they can leap from company to company, industry to industry like so many rabbits. They need to make themselves more marketable in the job market, to the detriment of American industry. 

The problem with being completely ignorant of the product that they are ostensibly presiding over is that those managers, for a lack of any understanding of the nuances of their industry, will inevitably apply the same shop-worn formula to a myriad of problems: everything looks like a nail when all you know is how to hammer. It is this kind of  hubris that has permeated my experience in the companies that I have worked for.

A company was rolling out a new product to the market and the heat was on to deliver the product to an existing and loyal customer. There was a technical issue, and the engineering team was working at resolving the problem through finding the root cause. As it turned out, the problem came from the concatenation of many related problems that had dominoed. As the problems persisted, it became obvious that the best way to resolve the issue was to be patient and stay disciplined, work through all the coupled problems step by step until every bug and every coupling effect was resolved. This approach was not acceptable to a particular manager as the heat was on. His solution? “Let’s take all the smart people in the company, bring them to one place and lock them in a room until they come up with the answer.” Even as the engineering team was spending hours on discovering and resolving problems, he wanted to hold a tea party and by PFM  (Pure F___ing Magic) come up with THE solution. Why? So that he can be the hero. Fortunately, cooler heads prevailed.

I was working on a project involving commercializing a technology that the company had just acquired. We were just setting up our project plan and preparing for the long process of turning an idea into reality. This process usually takes many years because the concept had to be fleshed out, a steady evolution of progressively more realistic conceptualizations had to be turned into a manufacturable product. Prototypes had to be built, tested,  and verified. Depending on the complexity of the product, the process of commercialization could take many years.

As we were figuring out how to address the breadth and depth of the task ahead of us, word came that our CEO had already called on the CEO of a potentially large customer about the product and sold him on the idea. He promised the customer 1,000 units within the year. We, the project team, were stunned and stupefied: we didn’t even have a working prototype and he had promised 1,000 units within the year. Of course, no one in the inner circle of senior managers had the courage to tell him that this was an impossible task because he had surrounded himself with Yes-men. Even if we were able to produce the 1,000 units, I was pretty sure that we would have killed someone in the process.  When someone eventually told him that it was impossible, the CEO was unrepentant, he essentially told the direct project managers that they didn’t understand marketing and we all should be grateful to him for both selling the product and lighting a fire under engineering and manufacturing. I left the company before the product was delivered, I had heard that the sales were not as described by marketing, but it took nearly five years.

Early in my career, I worked for a manufacturing company that made custom products: highly individualized and highly profitable. There was a loyal customer base, but the products are so specialized that the customers rarely buy these products in high volumes. They would order maybe 10-20 units every five or ten years, but they always paid a premium for the special  product. The trick to making a profit in those environs is to become known in the industry for a great product that is worth the price, i.e. safe and reliable. These products were difficult to design, engineer, and manufacture but they had a very high profit margin, because the customers would pay any cost for the product. The CEO of that company came from a commodities background, he was used to selling lots of the same identical products — like lightbulbs —  every month. The key in  the commodities market is to make as many of the same things as fast as possible and the sales strategy is to drop the per unit prices without going in the red and entice the customer to buy more than they think they will need; profits are made in volume while designing in planned obsolescence so that the customers need to buy the same product repeatedly and regularly.

Our vaunted leader’s plan for the existing product was to follow his commodities market addled instincts, he moved manufacturing offshore to take advantage of the low labor rates, reduce cost,  and then ship the products back to North America by cargo ships since these products each weigh nearly a ton. Of course, the delivery schedule must fit the shipping timeline into the delivery schedule. It takes the cargo ships a few months to travel the distance, which imposes  hard milestones on the schedule, which in turn places time pressure on the front and back end of the schedule. Most of the customers understood this better than this vaunted leader, so they built in penalties on the delivery contract so that every delay meant penalties, less profits, for the company.

The vaunted leader’s response to that problem was to have engineering create a line of generic major component parts of the product so that these parts are waiting in the warehouse before the customers even ordered. When the customer came with their orders, the thinking went, the design engineers would customize the product to the customer specifications while using the generic parts. The problem is that the generic component parts places hard design constraints on the designer’s ability to be flexible with their design for the customer’s specification; in the end, they are often unable to meet the customer specifications because of these constraints. What resulted was that these generic parts were mostly not usable and sat unused in the inventory while the same scheduling issues persisted. In the meantime, the learning curve for the offshore manufacturers was steep, the quality was impossible to maintain, what resulted was that the warranty cost shot through the roof and the company gained a reputation for bad quality.

In an effort build new business, this vaunted leader committed the company to reentering the commodity product markets, the same markets that the previous regime had abandoned because they realized that they could not compete with overseas production cost for making the same thing over and over again. Where the company could have invested in new technology,  the vaunted leader restarted the commodity product line by buying ready-made commodity products from overseas and re-name plating the imported products so that they appeared to be produced in North America. Engineering and manufacturing  did not know how the products were built,  did not understand the characteristics of the design, and more importantly, really wanted nothing to do with the third-party products. The customer support for the product was non-existent, as the engineers tasked with supporting the product had no idea what they were dealing with; the products once again stayed in the warehouse as inventory and the warrantee costs accumulated since the service department had no idea what to do when the product was returned.

In my last days there, the company was suffering through a down business cycle exacerbated by the poor decision making. There was talk that we were going to sell the company or worse, close the doors forever, which was when the gallows humor busted out. As a lark, we started the rumor that instead of severance pay each person would be given some of the parts from the low volume products and some of the commodity products that no one wanted and that would be the severance package. Ridiculous. But the rumor flew around the company in less than a day because people believed that the vaunted leader is capable of such actions.

These are some of the more egregious decision-making disasters borne of hubris, of managers believing in their own PR. Please understand that I am NOT saying that all managers need to know the minutiae of the products or the process, but they do need to have the humility and the curiosity to learn the nuances for  the very business that they are responsible for, find people who they can rely upon to tell them the truth, check their egos at the door, abandon the formulaic, and then double check their own biases. It seems those have been impossible to ask for.