Friday, July 31, 2009

Prof. Gates and the Cambridge police

Professor Gates of Harvard identified himself with his driver’s license and Harvard ID card. His driver’s license gave his residence address as the house he was in.

Any reasonable police officer would at that point recognize that he was dealing with the homeowner and say “Thank you, Sir. We were just making sure that you were, indeed the homeowner. Have a nice day.” Then leave.

This was not about race; it was a cop on a power trip. This officer has a real problem with authority figures.

Wait, you say, “isn’t the officer the authority figure?” Only until he finds out that the person he is talking to is not a “suspect”; he or she is a “citizen”. In the case of Professor Gates, that happened in the instant that he showed the officer his identification that he was not breaking in, that he was the homeowner.

In that moment the citizen became the authority figure and the officer the public servant.

Thursday, July 23, 2009

Why job boards don’t seem to work for candidates

Over 45 years ago when I was still in school, most tests were multiple choice and essay. The teachers loved multiple choice because they could grade them very quickly while essays had to be carefully read and that took time, slowing down the grading process.

Job boards and electronic resume submission forms work more like multiple choice than essay and work really, really well with skills. Skills like; types 60 wpm, welds aluminum, or 5 years experience as a plumber. They don’t work very well with essay type answers; Increased sales by 20%, etc.

Essay type answers demand discrimination and most artificial intelligence systems available today can’t do the level of discrimination that a human reader can. That means that a real live human has to read, closely, a resume for jobs that require judgment. That includes most jobs beyond entry level.

Since these tend to be the better paying jobs, there are a lot of applicants and this means a real investment in time by the HR departments.

I’m looking into what it will take to start a local business incubator in my hometown and wrote a white paper, which I asked some contacts to read. The funding sources were buried on the next to the last page on purpose. All the people who “read” it asked where the funding would come from! This told me that they hadn’t read the whole thing, just skimmed for key words.

How does this relate to job boards?

Job boards and computerized job applications do exactly the same thing, they “skim” for key words. If your key words are different from the expert system’s (or the human reader’s) you’ll get missed. The big problem is the preconceived ideas of the person writing the expert system or key word list. If they don’t really know the keywords that span industries and job descriptions, they will arbitrarily limit their candidate pool.

While this is a problem for job seekers, it’s an even bigger problem for business. A stable expert with years of experience in logistics, for instances, is much more valuable to your business than someone with lower skills and less experience. You’d like to find someone who can hit the ground running and not take a significant amount of time to learn the job.

There is not now, and may never be, a substitute for a live human actually reading a complete resume. Companies will continue to have problems finding high quality employees until they recognize that the key place to apply resources is at the initial screening. The first person to read a resume must have a great deal of experience with a large variety of industries and a deep knowledge of the day-to-day demands of each job they are screening for.

The initial screener is grading your “raw materials” and that job demands a high degree of knowledge, skill, and plenty of time to do the job right.

Saturday, July 18, 2009

Why are growth numbers so important?

I just heard a segment on CNN news, running in the background on my TV while I write. They were talking about a business that is down because of the economy but will still expect to show double-digit growth.

Who cares how fast it grows? All businesses eventually saturate their market and show limited growth. The only measure of business health is profit. It is possible to have a stable, profitable business and not get much bigger.

True, you do have to look ahead since the market does change, your product or service may have to change, delivery methods may change, cost structures may change and you have to keep on top of all that while turning a profit.

The idea of constant growing sales comes from lazy financial monitors, mainly stock price followers, looking for a single simple measure of performance where the truth is much more complex. Those lazy people have infected the rest of the business community with their shorthand performance measure and that in turn has twisted management’s view and investor’s expectations to unrealistic levels.

I remember Apple’s stock price dropping because their profit was slightly smaller than some Wall Street analyst’s projections at the same time they returned over a billion with a B in profit. That was even up slightly over the year before, just not as much as the analyst expected (wanted?)

Unfortunately far to may companies are focused on what the stock market does and not on what their customers want and are willing to pay for. The customer buying products ultimately funds companies not stock sales.

Monday, July 6, 2009

Too big to fail

A large part of the rational for the massive government bail out is that the companies are “too big to fail”. I, as a layman, take that phrase to mean that the particular company is so interwoven with its industry that letting it fail would hurt the entire industry. I also take it to mean that the damage to that particular industry would damage the entire economy.

The politicians listened to the industry experts and began dismantling the Glass-Steagall Act of 1933 with changes the Depository Institutions Deregulation and Monetary Control Act of 1980 and by the Gramm-Leach-Bliley Act.

Some, but by no means all, of these changes were key to the financial melt down in the US economy. A few financial experts warned against those changes which allowed the merging of banks into such big conglomerates. A lot of us laymen worried about those same changes and warned whoever would listen (not many people) that these changes were risky.

One of the big reasons sighted was to allow the aggregation of capital to finance bigger projects than the smaller institution could finance. The truth be told, it never was about figuring out how to finance the projects, it was always about those specific companies being able to finance the entire project by themselves, instead of forming a limited corporation to finance that single project.

We’ve known how to create a corporation to finance big projects for several hundred years. The problem, of course, is that the profits are shared by all the partners not retained by a single entity.

We recognized in 1933 that some financial transactions should be firewalled from other transactions. We also knew that we needed to regulate the size of any single institution to keep them from getting "too big to fail". We changed those regulations, not to make the public safer, not to make the business more efficient for the public, we change the regs to make selected institutions more profitable. Not to keep them alive, but to enhance profit.

One thing you learn in business that politicians don’t seem to learn is that if it’s not working, stop doing it!

The changes to the banking regulations that apparently helped create this firestorm need to be changed back, and as quickly as possible to the ones that gave us a stable economy for almost 60 years. We need to demand that those over-bloated banks get back to a size where no single institution can ever be “too big to fail” again.