Thoughts on Making a Living

Month: January 2016

Why Do We Have Increasing Income Inequality?

It is an issue that is all over the news, Increasing Income Inequality or I3. (I just made that I3 up). Normally, it is expressed in terms of the top 1% own 136% of everything or some other statistic like one CEO makes more than the rest of the world combined. It is obviously an issue that so many feel hard done to, but the prescription normally involves a “living wage” or caps on what some can earn or taxing income above certain amounts at confiscatory levels. That’s just pie-fighting. I wish we had more pie makers, especially those who really love to make and eat pie.

Political viewpoints normally determine where one stands on these issues. The Right want free enterprise, but the Left want social justice. However, I would like to frame this issue more in the New Yeoman point of view. What if you got social justice through free enterprise? Who from the Right would want to discourage self-employment? Who on the Left would want to discourage the individual to stand for themselves?

Unfortunately, some would. The corporatists (modern day mercantilists) and the government-firsters are in agreement here. Keep ’em under the thumb, so they are easier to manage. “You don’t have a W-2 slip? What are you a weirdo? Are you evading taxes? No, you cannot get a loan.” (There’s a great book on this topic entitled “The Future and Its Enemies” by Virginia Postrel)

What we have is far too many people who have listened to the decades of “good” advice to “get a good job.” In simple economics, the supply exceeds the demand. What happens when the employee demand exceeds the supply? All other things being the same, wages will go up and I3 will reverse. I can hear the howls of indignation already! “Koch stooge! Hippie! Unfettered Capitalist!” But hear me out.

Yes, I know everyone is not cut out to be self-employed, but that is not what I am talking about. All that is needed is for the most capable to become self-employed. The number needed to hit the exit from employed life would need to be relatively few. The meme of “The War for Talent” should be an indicator that it is a pretty fine balance already and wouldn’t take much to upset it. Remove a few of the best qualified and voila you have a labor shortage. Both in number and productivity. This can be seen in the hi tech fields already. Many coders have taken the leap to self-employment. That shortage means that the ones who are still happy to be employed reap higher wages and benefits too.

Roughly speaking, all other things being the same, each 1 million employees that became self-employed would drop the current unemployment rate by approximately ⅔ of a percentage point. [Source: USA’s BLS statistics for December 2015.] And that is from a employed work force of nearly 150 million. Surely, we have 1 or 2 million people who would prefer to run their own shop rather than work for Mr. Blatherhard?

The problem is that we as a society have reduced the respect we give to the self-employed. To own one’s business of any type should be held in high regard by everyone. It means that, compared to employees, one has taken more risk and shown more willingness to make it on their own. Yes, I know “no one makes it on their own,” but that is true of everyone, so for those that do become self-employed, still, they are different. And it is not only good for them; it is good for those that do remain employees.

So, how do we get a few million of the employees to remove themselves from the “employed” force? First, we need to set it as a goal for people by holding those who do so in high regard. Parents, teachers, counselors,  I’m looking at you. The employed world you knew is not the one your children are entering. They need more than, “get into the best school you can” and then, “get a job at a blue-chip company.” Second, the thing that stops many is the idea of the bureaucratic hassle of setting up a business, so we should make creating a business so easy that anyone could do it in under an hour. Surely, that should be a goal of government, no?

That’s it. Something that is socially respected and easy to set-up. It is New Kind of Science in its simplicity, but I believe those are the ideas that work best over large populations and time, because they are clear and repeatable. All that is left is excitement and hard work.

Let the New Yeomen take over from there!


General Mattis on Professional Reading

I’m not sure how I missed this conversation about an email sent by General James Mattis, Retired, USMC in 2003 to his subordinates, but I did. The money paragraph:

Thanks to my reading, I have never been caught flat-footed by any situation, never at a loss for
how any problem has been addressed (successfully or unsuccessfully) before. It doesn’t give
me all the answers, but it lights what is often a dark path ahead.

I think this is very important and it applies to other professions as well. The military professional obviously has more to lose from an ignorant (in the “not knowing” sense) leader. However, an artisan, electrician, or designer or any other New Yeoman has much to lose as well by not keeping up to date with their profession. Just as importantly, knowing the history of the trade or profession shows professional competence, both inside the trade and to one’s customers.

The emergence of this email apparently created a stir amongst the academics who study war (full disclosure; I am an academic historian as well as a business owner), but they tend to ignore the fact that Mattis was writing to another practitioner about other practitioners. [Ahem. Pardon me while I shoot this guy whilst you get your dataset and independent variable situated.] I think independent business owners are much the same, they are running businesses and know how to filter on the run. The fact that one read  and / or recommended something does not mean that all of its ideas and premises were accepted without reservation.

As Mark Twain said, “History doesn’t repeat itself, but it does rhyme.” Any New Yeoman that wants to succeed on his own must develop a sense of their industry’s past and have a view on its future. Not only does it make the New Yeoman more confident and resilient, but it is a more satisfying life that helps one feel that they are not just being tossed about on the ocean. With professional reading, you give yourself a compass, a rudder, oars, and the knowledge of how to make a mast and a sail.

Let’s face it. No one in this rat race has time to read, but the best of their respective trades or professions make time to read.


Formal Versus Informal Job Market

Michael Ellsberg makes some excellent points about the “Formal” versus the “Informal” job market and the cost of each. One requires an enormous amount of money and the other requires you take responsibility for yourself.

The informal job market comprises all jobs that are not filled through someone responding to a job advertisement.

In this article on Tim Ferriss’ website (Highly Recommended and his podcasts too), Ellsberg explains how to go about tackling the informal job market and how to make one’s way in the world without following the herd, especially when following the herd will cost you a fortune and still land you in a crappy formal job market. The key for this and all other types of advice is to understand that it rests with you to do the work. The reason that  university, then applications, then job at a big corporation is so alluring to many is that it requires so little thinking and so little real effort. Does it take a lot of time and manual effort to perfect your resume, network your LinkedIn profile, and upload applications to what Keva Dine calls Deep Space Mining? Sure, but it is largely senseless and mind numbing work.

What Ellsberg so clearly lays out is how to decide what it is you want to do, how to develop your skills, how to display your skills, and how to sell your skills. Readers of this blog will recognize some of this from the Seth Godin post a week or so ago.

Well worth a read.

Udacity’s Nanodegree Plus is a Game Changer

A guaranteed job or your money back? What’s to lose for a young person? Take a gap year. Travel and study for your Nanodegree at the same time. Come back to a job. If it doesn’t turn into a job, get your money back ($299 per month), and  join the rest of the drones going to “the best school they can get into.” I’m sure that you’ll really impress that academic-wannabe admissions officer… As long as you and/or your parents cough up $25-$50K a year.

Even if you complete the Udacity course and decide that that type of work is not for you, you have a valuable skill that will help you in university and your future career. For parents, you also get a good look into Junior’s work habits. If your child cannot work through the Nanodegree, what are the chances of them doing well, and finishing university? It is certainly not definitive, but it might it be a good sign, that they will attend 2 years of university, flunk out, and tote $35K worth of un-dischargeable debt around for the next 30 years of their adult life.

Turbo-charging with Customer Service

Cross posted on LinkedIn.

In my first and second posts, I wrote about how to know if one’s organization is belching noxious customer service fumes and how to clean up the worst of them. In this post, I’ll discuss how to use those remaining, hard-to-clean-up emissions to drive your organization forward. This will not only improve one’s customer service, but has the very real potential to improve products and operations to the point where customers quit antagonizing the organization over poor customer service, but actually promote one’s products to their network.

I had the good fortune to be employed by in its early days (1999-2001) as a logistics manager, a project manager, a technical facilities manager, and finally as its Head of English Customer Services (CS) in Europe (three of those all at the same time with three separate bosses… ahh, the life of a start-up). To my good fortune as a consultant, I have been contacted by many companies that say they want to be the “Amazon of X.” Normally, what they mean is that they want to be as ubiquitous and forward-looking as Amazon in customer services and operations in their chosen field. Unfortunately, many of the people I speak to really don’t want to do the hard work to become the Amazon of their field. They are looking for shortcuts and tricks of the trade. is the king of “real CS” in taking CS problems to organizational fixes. The best way to fix the problem is to fix the source of the problem which, by the way, often fixes more than the evident CS problem. In my ongoing analogy, Amazon uses its exhaust as a turbo-charger. (It also uses the forward momentum that these actions create as a super-charger too, but that is for another post)

Turbocharging means fixing the underlying problem and not just providing a palliative to the customer for that particular situation. Providing a palliative (installing a catalytic converter in my previous post) may be required when you first find out about a problem. However, if pain relief is all one is providing and leaving the pain-causing situation in place unaddressed, the problem will continue to occur. That normally results in the following; customers appreciate the palliative (or not), but grow to expect that kind of pay-off as part of the deal. However, they still post on social media their problems and your palliatives. You may gain a reputation for fair-play, but that is also the new expectation. Eventually, and I have been in more of these meetings than I care to recount, the company will eventually focus on the high cost of CS relative to Revenue. This leads to the all-too-predictable responses of never-ending phone-trees, poorly designed self-help pages, and other cost-per-contact “fixes.” They bury the problem in a maze of confusing and misdirected KPIs that mask the problem. These frustrating technologies and processes inevitably slow sales, new and repeat, and are a veritable breeding ground for customer antagonists.

When I enter these situations, I often see the frustration on executives’ faces when their CS team is telling them that they are meeting all of their KPIs, but the Net Promoter Score (NPS) is falling, along with sales. Other departments are pointing to how bad CS is in dealing with customers. The CS team is doing their best with a limited budget and tool-set. They aren’t lying. They are measuringsomething. They may even be making headway in cleaning up the exhaust. Multiple meetings to address the issues result in a ton of actions for the contact center. New KPIs are proposed. However, the underlying problems never seem to get resolved. Where to begin?

Here is my take. To start, the organization’s product director, program director, and operations director need to be at the solution meeting. The focus needs to be on the reasons for customer contact, including customer search terms on the self-help pages. Convert the organization’s language to customer language. Look at the top 10 reasons one-by-one and determine, with the responsible people in the room, what actions would improve the customers’ situation. Then, quantify the total cost to the organization in time, effort, and lost sales. Yes, in simple cost terms, a problem may cost you $2.43 X 936 contacts a week, but what about lost sales from customer abandonment and countering social media meltdowns? What about improved reviews and recommendations? Once the key problems are identified, quantified, and total costs calculated, do the same with the proposed fixes. What would be the total cost to fix the problem, technically and/or operationally? Finally, make the CS projects report through the normal program management channels. Give them the visibility they deserve.

At this point, I often hear howls of protest from the also-busy product, program and operational teams. “But, we have our own problems and budgets!” That is why the leaders of each need to be in the room. CS is not the product and operations, but it is a good indicator of their health. All cards need to be on the table and organizational decisions on time and resources need to be made. This gets to the nub of my analogy. If the organization is spewing noxious exhaust, fixing the muffler is a start, but it cannot be the end point. If the CS total cost does not compete favorably with an honest assessment of other projects against the organization’s strategy, so be it. If they are competitive, they go on the list like everything else. Trust me, this outcome will happen sooner or later, through one means or another, many of them unpleasant. The question is whether one makesit happen or it happens to one.

Finally, there is often another, unspoken, problem. The CS leader, either by organizational design or professional experience/development, is not the equivalent of the operations head, the product head, or the program management head (especially in technical organizations). This is deadly. Ironically, this often comes about due to the CEO or COO making a junior CS Manager report directly to them as a way of showing that CS is important to the CEO/COO. Often, the CS manager is in meetings with Director level appointments and simply does not have the knowledge or courage to be a forceful advocate for his department or, more importantly, the customer. I’m not saying promote them to make it even. If they are too inexperienced, that will make things worse, not better. I’ve also seen some pretty savvy CS Managers hold their own in a room of senior directors. Each organization is different, but in one way or another, the CS head needs to hold his own. As an executive, if your CS head is not senior enough, either in rank or actions, get him a competent boss who is. If the CS lead has the title/authority and experience, but is not holding his own, get yourself a new one.

There are many specific techniques that fill in the gaps of what I discussed, but it is certainly the core infrastructure of what I have done many times. Good luck with your own turbo-charging.

Conventional Wisdom is only Conventional

“Get into the best school you can” is the conventional wisdom given to many university bound students. In what I thought would have been parental common sense, but obviously is not, Jillian Berman lays out the decision making that should go into choosing a university.

When parents and children talk about applying for colleges, they consider all sorts of factors: the school’s prestige, the location, even the food in the dormitories.

But often there’s one thing that never is on the agenda: How are we going to pay for this?

Even people who over-buy on cars and homes normally know what the monthly repayments will be and how much of their take-home pay it will constitute.

In my mind, a parent who does not have this discussion, including the alternatives to university, is committing parental gross negligence. And for high school guidance counselors who negligently parrot the university administrators’ marketing lines and platitudes from the 1980s; fire them.

Deep Space Mining | Keva Dine™ | LinkedIn

Keva Dine gets this exactly right. I think a lot of people looking for work spend far too much time uploading resumes and cover letters into deep space. Spend more time targeting what it is you want to do, for whom you want to do it, and, specifically, what you would do differently.
While completing those three steps and doing them with commitment and deep thought, one might just find that one’s next boss could be the one doing the thinking and writing. Ironically, this kind of self-knowledge often leads employers to want you more than pandering to their wells-of-despair known as “systems.”

Source: Before You Launch Your Resume Into Deep Space, Read This. | Keva Dine™ | LinkedIn

Seth Godin on Students trained to be Students being Students When Looking for a Job

Seth Godin gets a lot right and I think this is spot on. What schools and universities do mostly these days is teach students to be students. Schools and universities give the impression that all you have to do is be an expert navigator of the system. That was probably true from 1950 to 1999 (and the vestiges of the system are still there, especially in the non-profit, education and government sectors), but in the private sector, more is needed.

What students don’t understand is that they are increasingly being graded on the items that Godin mentions:

Can you show me a history of generous, talented, extraordinary side projects?

Have you ever been so passionate about your work that you’ve gone in through the side door?

Are you an expert at something that actually generates value?

Have you connected with leaders in the field in moments when you weren’t actually looking for a job?

Does your reputation speak for itself?

Where online can I see the trail of magic you regularly create?

Unfortunately, students are too busy navigating byzantine application procedures and primping to be picked to actually spend any time thinking about what is valuable and show-casing it.

Universities’ current value to students is credentialing and signaling. It is what they have used to justify mammoth tuition increases every year for thirty years. What universities don’t understand is that as employers start to notice that the credentials and signals have no there there, they will look for other credentials and signals… like demonstrable mastery of a trade.

Right now, many are graduating from university and then taking a coding courses, design course, etc. and treating it like grad school. Grad schools require you to have a undergraduate degree, these schools do not. How long before students and parents start looking to cut-out the unnecessary part of this process?

The big question is that if you did as Godin proposes in the list above, would you need the signaling and credentials at all? Four years is a long time to learn nothing and expend a ton of money.

Entrepreneurship Is the Solution to Higher Education, Not More College

Great points by Zachary Slayback. We are at the tail-end of the system that says that getting a job is always the right thing to do. Our country needs a generation of entrepreneurs and our young people need pragmatic advice.

Source: Entrepreneurship Is the Solution to Higher Education — Not More College | Zachary Slayback | LinkedIn

As Mike Rowe says, we don’t have too few jobs, we have too few self-employed people.

Cleaning up the Exhaust

Cross-posted at LinkedIn

Excellence is to do a common thing in an uncommon way. – Booker T. Washington

In my last post, I described customer service as the exhaust port of an organization. Every organization that is doing something of value produces some kind of exhaust. Most organizations know this fact of life and have instituted a way of working with their customers. Running the gamut from mediocre to good, these organizations have found some level of equilibrium, some below and some above average. There are some excellent organizations that work very hard to stay well above equilibrium. I’ll speak of those organizations and how they work in later posts. For this post, I’ll discuss the organizations that through one means or another find themselves belching smog and don’t know where to start in the clean-up effort. The steps below may sound obvious, but I assure you, I’ve seen some well known companies at this stage looking like the proverbial deer in the headlights. Every potential action seems to have a drawback and inaction becomes the norm. An award winning design firm with a highly desirable and trendy accessory business, that could not deliver their product on time and could not answer a customer email within a week, comes to mind.

As with an internal combustion engine, the first place to start is to quit using the leaded fuel. The leader who faces the problem must face facts and stop doing the things that they know are only creating customer-antagonists; those customers who feel so wronged by sub-standard service that they make it their personal mission to inform the world of your faults. The organization must stop shipping inferior products that they know are not going to meet customer expectations or at least honestly manage the customers’ expectations. If all of one’s data say that shipping times average 4 days, then stop guaranteeing 2 day delivery, until the logistics system can be fixed. If the routine phone queue wait time is 25 minutes, don’t put on a service message that says you are only performing badly, because you are “currently experiencing high volumes.” It is dishonest, the customers know it, and they treat the offending organization accordingly. If one knows their self-service website results in 65% of searches ending up with an email or phone call, then don’t send your customers there just to experience search hell. I’ll discuss how to fix these issues in later posts, but to start, stop forcing the customer there when it is a known pain point. These are tough decisions and may even result in things getting worse before they get better. However, with clear and honest communications, along with an honest attempt to turn things around, a new trust can be built. Think of Dominos Pizza admitting its old-recipe pizzas tasted like cardboard and building a world class online ordering system for a customer base that was used to getting busy phone lines.

The next step is to install a catalytic converter. The organization may not be able to completely stop all of the polluting habits immediately. Therefore, the actions need to be focussed on remediating the most noxious fumes. A quick survey of the most numerous contact types from the phone, email, and web will identify where most of the biggest and most persistent problems lie. Once identified, examine what the customer calls these problems, not what the organization thinks they are called. I had one client that had a ~20% usage of its self-help pages, merely because the relevant knowledge base article used the company’s technical language for the problem rather than the problem the customer was searching to solve. A quick re-write, using the customers’ search terms, and more prominent placement increased self-help usage to ~65% and resulted in a huge reduction in the daily volume of frustrated customers on the phone. This action is key, because it reduces the chaos in the contact center. The next action action of the catalytic converter is to streamline the contact methods and access to answers. Now is not the time to demand information that is not required, just because it may be of use. If the customer is already in a pickle with your product, the organization needs to remove the long contact form and replace it with – 1. What is your problem and 2. How can we contact you to help.

Depending on your product and customer profile, there are other similar actions, but there is one increasingly common type that I’d like to address. If one has a “freemium” business model, focus on the paying customers. I know this freaks out some purists, but, simply put, contract law is the best guide. A consideration paid for services demands timely service. Staggeringly, I worked for a large freemium product company that could not distinguish incoming contacts between paying and free customers. Our first order of business was to find an inelegant and blunt tool to identify the payers as they presented themselves in the midst of the 95% who were not paying. Additionally, we began to track the increased satisfaction of these customers to justify the ROI for the permanent-fix project. [Coincidentally and initially unrecognized by us, this had the added effect of reducing fraud which also reduced the chaos dramatically. Fraud thrives in customer service chaos.]

In summary, if you find you are a customer service polluter, take action immediately. First, conduct a quick, but brutally honest analysis of why you are emitting noxious fumes. Second, confirm the guiding principles that you want to be known for. Finally, begin acting coherently with those principles. Simple? Yes. Easy? No.

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