Wednesday, April 24, 2013

Manufacturing Jobs Coming Back To Indiana But Labor Is Not Ready

This past week's special report by The Economist highlights the reversal of outsourcing manufacturers bringing production back to the US from overseas. But as many Indianapolis area manufacturers already know, the local labor market is tapped out. The people necessary for advanced manufacturing, skilled trades, and modern logistics have been pursuing other careers. Not enough people locally are completing high school or enrolling at Ivy Tech or Vincennes in Machine Trades. And, the local area is flooded with people who either have a BS degree or who have pursued a BS degree in a field that really has no viable employment prospects. The result is advanced manufacturing jobs running high tech equipment, requiring some advanced math skills, are going unfilled. As The Economist points out, General Electric has, "returned production of fridge, washing machines and heaters from China back to Kentucky." That's Louisville, Kentucky's GE Appliance Park. ( Offshoring: Welcome Home ) The trend is boomeranging and outsourced jobs are now being put close to R&D facilities. Lenovo (China's Dell) is building at PC manufacturing plant in North Carolina near IBM R&D and HQ. But the manufacturing jobs coming back to the US are different from those 20 years ago. As The Economist articles point out, "lines of computer code and industrial robots have probably displaced as many or more call-centre operators and factory workers as cheap Asian hands have done." The economics and politics of outsourcing have shifted based upon several factors - 1) automation 2) rising labor costs in developing countries (wages are rising faster in China than anyone has predicted) and 3) rising cost of shipping. The Economist predicts by 2015 it will cost the same for an American firm to manufacture in America as in China. Outsourcing & Offshoring: Here, There, and Everywhere

Leaders Are Great By Choice

Morten Hansen, Management Professor at UC Berkley, discusses his work with Jim Collins on leadership by choice. Visionaries are not the winners that you'd think them to be. Being lucky as it turns out is about equal to being unlucky. Great leaders prepare for good and bad luck events by being prepared for them, recognizing and seizing the moment, and then executing brilliantly. The three common traits of exceptional leaders who are Great By Choice are: Productive Paranoia •Being obsessive in preparation to deal with potential threats. Fanatical Discipline •Being committed to objectives at all costs. Empirical Creativity •Creative risks are calculated, well-thought-out risks.

NYTimes: Secret Ingredient for Sucess WHAT does self-awareness have to do with a restaurant empire? A tennis championship? Or a rock star’s dream? Enlarge This Image Marion Fayolle David Chang’s experience is instructive. Mr. Chang is an internationally renowned, award-winning Korean-American chef, restaurateur and owner of the Momofuku restaurant group with eight restaurants from Toronto to Sydney, and other thriving enterprises, including bakeries and bars, a PBS TV show, guest spots on HBO’s “Treme” and a foodie magazine, Lucky Peach. He says he worked himself to the bone to realize his dream — to own a humble noodle bar. He spent years cooking in some of New York City’s best restaurants, apprenticed in different noodle shops in Japan and then, finally, worked 18-hour days in his tiny restaurant, Momofuku Noodle Bar. Mr. Chang could barely pay himself a salary. He had trouble keeping staff. And he was miserably stressed. He recalls a low moment when he went with his staff on a night off to eat burgers at a restaurant that was everything his wasn’t — packed, critically acclaimed and financially successful. He could cook better than they did, he thought, so why was his restaurant failing? “I couldn’t figure out what the hell we were doing wrong,” he told us. Mr. Chang could have blamed someone else for his troubles, or worked harder (though available evidence suggests that might not have been possible) or he could have made minor tweaks to the menu. Instead he looked inward and subjected himself to brutal self-assessment. Was the humble noodle bar of his dreams economically viable? Sure, a traditional noodle dish had its charm but wouldn’t work as the mainstay of a restaurant if he hoped to pay his bills. Mr. Chang changed course. Rather than worry about what a noodle bar should serve, he and his cooks stalked the produce at the greenmarket for inspiration. Then they went back to the kitchen and cooked as if it was their last meal, crowding the menu with wild combinations of dishes they’d want to eat — tripe and sweetbreads, headcheese and flavor-packed culinary mashups like a Korean-style burrito. What happened next Mr. Chang still considers “kind of ridiculous” — the crowds came, rave reviews piled up, awards followed and unimaginable opportunities presented themselves. During the 1970s, Chris Argyris, a business theorist at Harvard Business School (and now, at 89, a professor emeritus) began to research what happens to organizations and people, like Mr. Chang, when they find obstacles in their paths. Professor Argyris called the most common response single loop learning — an insular mental process in which we consider possible external or technical reasons for obstacles. LESS common but vastly more effective is the cognitive approach that Professor Argyris called double-loop learning. In this mode we — like Mr. Chang — question every aspect of our approach, including our methodology, biases and deeply held assumptions. This more psychologically nuanced self-examination requires that we honestly challenge our beliefs and summon the courage to act on that information, which may lead to fresh ways of thinking about our lives and our goals. In interviews we did with high achievers for a book, we expected to hear that talent, persistence, dedication and luck played crucial roles in their success. Surprisingly, however, self-awareness played an equally strong role. The successful people we spoke with — in business, entertainment, sports and the arts — all had similar responses when faced with obstacles: they subjected themselves to fairly merciless self-examination that prompted reinvention of their goals and the methods by which they endeavored to achieve them. The tennis champion Martina Navratilova, for example, told us that after a galling loss to Chris Evert in 1981, she questioned her assumption that she could get by on talent and instinct alone. She began a long exploration of every aspect of her game. She adopted a rigorous cross-training practice (common today but essentially unheard of at the time), revamped her diet and her mental and tactical game and ultimately transformed herself into the most successful women’s tennis player of her era. The indie rock band OK Go described how it once operated under the business model of the 20th-century rock band. But when industry record sales collapsed and the band members found themselves creatively hamstrung by their recording company, they questioned their tactics. Rather than depend on their label, they made wildly unconventional music videos, which went viral, and collaborative art projects with companies like Google, State Farm and Range Rover, which financed future creative endeavors. The band now releases albums on its own label. No one’s idea of a good time is to take a brutal assessment of their animating assumptions and to acknowledge that those may have contributed to their failure. It’s easy to find pat ways to explain why the world has not adequately rewarded our efforts. But what we learned from conversation with high achievers is that challenging our assumptions, objectives, at times even our goals, may sometimes push us further than we thought possible. Ask David Chang, who never imagined that sweetbreads and duck sausage rice cakes with kohlrabi and mint would find their way beside his humble noodle dishes — and make him a star. Camille Sweeney and Josh Gosfield are the authors of the forthcoming book “The Art of Doing: How Superachievers Do What They Do and How They Do It So Well.”

HBR: Why Employers Aren't Filling Their Open Jobs

Thanks to my neighbor Scott Lakes for sending me this article and discussing it with me. Of all the reasons why open positions are going unfilled, I think based upon our recruiting experience here at Career Solutions that Wharton Management Professor Peter Cappelli's final possible reason for high unemployment levels at the same time we have high numbers of posted jobs is the right one: This recession has gone on for so long that it changed what hiring managers think they can find in the labor market. Early on in the recession, when literally millions of people were being laid-off, it was easy to find someone fresh out of a job with the experience and skills needed to step right into your vacancy. Now in the fifth year of the downturn, unemployed candidates have often been out of work for quite a while. The candidates with current work experience that hiring managers want are working for someone else, and they aren't desperate to take a new job. I would also add that I question the relevance of the Beveridge Curve in the internet job posting age. Because it is so easy and cheap to put job postings on the internet, employers tend to leave postings on the internet for positions that have no urgency to be filled. For the Curve to be relevant again, it should more heavily weigh dollars spent by corporations on recruiting and job postings in comparison to the unemployment rate. Why Employers Aren't Filling Their Open Jobs by Peter Cappelli | 7:00 AM March 8, 2013 There are many signs that the US economy is improving, but the most important one, the unemployment rate, remains stubbornly rooted in recession territory. We had jobless recoveries coming out of the last recessions in 2001 and 1992, but this one put the budget squeeze on recruiting and has gone on for a very long time. Does it mean there is something really different this time? One way to answer this question is to see whether the level of hiring now is different than one would expect given unemployment rates this high. This ratio of job openings to unemployment when calculated over time is known in economics as the Beveridge Curve, named after the British economist William Beveridge. Several studies during this recession seemed to indicate that the situation was similar to previous recessions, but a recent study points to one big anomaly: Job openings are not being filled nearly at the rate they have been in previous recoveries. In other words, vacancies are staying vacant for a very long time. If so, then the next question is, why? Why aren't employers filling those jobs? The popular explanation that there is something wrong with the applicants has no support. There is no "mismatch" between the industries and occupations where people were laid off and where hiring is taking place, for example. Jobs have not changed over the last couple of years in any way that changed skill requirements substantially. The "failing schools" notion, even if it was true, couldn't explain the continued unemployment of the majority of job seekers, who graduated years ago and had jobs just before the recession. The better answer comes from the ways in which contemporary practices have made hiring more difficult. Companies regained profitability during the recession with a relentless squeeze on costs, and most of that squeeze was associated with labor. We know, for example, that employers are spending far less to recruit and hire a candidate than before the recession, which may make it harder to find the right person. Line managers with profit-and-loss responsibility also have a big financial incentive to avoid adding new employees and the associated costs, so the pressure to hire often comes from overworked employees who demand more help when business and the workload picks up. But even when managers give permission to hire, they may drag their feet about actually bringing someone on. With all those people looking for jobs, why not be picky? Candidates routinely report that companies now take months to make hiring decisions, putting the candidates through round-after-round of interviews with long pauses in between, as the employer picks through the many worthy candidates. Some of the cost-cutting took out recruiters. They used to be the people pushing back on hiring managers, asking "do you really need someone with a graduate degree to do this job?" or telling them, "you aren't going to find someone with 10 years of experience at that salary." Outside recruiters report that they often have to bring in many candidates who turn down a client company's job offers before the client is persuaded to raise its pay. And some of the cost-cutting also took out training and development capabilities, so that hiring managers have no choice but to wait for candidates who already have all the skills needed to do the job. Finally, part of the explanation may also be that this recession has gone on for so long that it changed what hiring managers think they can find in the labor market. Early on in the recession, when literally millions of people were being laid-off, it was easy to find someone fresh out of a job with the experience and skills needed to step right into your vacancy. Now in the fifth year of the downturn, unemployed candidates have often been out of work for quite a while. The candidates with current work experience that hiring managers want are working for someone else, and they aren't desperate to take a new job. So where does this leave employers — and the unemployed? The reason markets adjust is because the participants, in this case the employers, eventually learn that they either have to raise their pay or lower their expectations in order to get the workers they need. That process of learning and adjustment slows down a lot, though, once companies have cut the recruiters, who used to do the learning for them, and the trainers, who could turn imperfect candidates into credible workers. More blog posts by Peter Cappelli More on: Economy, Hiring, Human resources Peter Cappelli Peter Cappelli Peter Cappelli is Professor of Management at the Wharton School and the author of several books, including his latest, The India Way (Harvard Business Review Press, 2010).