Job Shock, Part Two

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Job Shock, Part Two

Edward E. Gordon, the founder and president of Imperial Consulting Corporation in Chicago, has consulted with leaders in business, education, government, and non-profits for over 50 years. As a writer, researcher, speaker, and consultant he has helped shape policy and programs that advance talent development and regional economic growth. This week, he continues his blog series with Job Shock, Part Two.

Gordon is the author or co-author of 20 books. His book, Future Jobs: Solving the Employment and Skills Crisis, is the culmination of his work as a visionary who applies a multi-disciplinary approach to today’s complex workforce needs and economic development issues. It won a 2015 Independent Publishers Award. An updated paperback edition was published in 2018.

Job Shock, Part Two – by Ed Gordon

Part II: What Has Changed?

Job Shock: Solving the Pandemic & 2030 Employment Meltdown

Would You Use a Videotape in a Blu-ray Disc Player?

The days of semi-skilled blue-collar factory jobs are fast disappearing. These jobs once provided a 19-year-old high school graduate or drop-out with the wages and benefits needed to support a family with a middle-class standard of living. Thinking that working in low-skill manufacturing or service occupations will propel you into the middle-class today is as sensible as buying a videotape for a Blu-ray disc player.

The decline of many types of U.S. manufacturing jobs was a hot political issue in both the 2016 and 2020 Presidential elections. The economic consequences of the closing of large manufacturing plants, particularly those making automobiles and large household appliances, have been especially severe. Many of these factories were located in smaller cities in which they were the central economic engines of their communities since the 1950s. They provided large numbers of assembly-line workers with well-paying, lower-skill blue-collar jobs. The growing prominence of electric vehicles has made such auto plants obsolete. The new technologies used in these vehicles mean that robotics are a central feature of their assembly lines. Such assembly lines depend on higher-skill workers who control, maintain, and repair the automated equipment. Manufacturing, in general, is undergoing a similar transition with jobs that support automated equipment growing dramatically.

The December 2020 survey of the National Association of Manufacturers illustrates the rapid escalation of skills demanded in manufacturing. Even in the midst of the COVID-19 pandemic, respondents reported the “inability to attract and retain talent” as their top business challenge. The Manufacturing Institute has projected that 2.4 million manufacturing jobs will likely be unfilled over the next decade due to skill deficits.

The Fourth Industrial Revolution is wiping out many types of middle-skill jobs. The COVID-19 pandemic has more severely affected middle-skill and low-skill workers.  More individuals see both their financial well-being and social status threatened. This has helped to fuel the growth of populist movements that are latching on to conspiracy theories or finding other scapegoats to blame for their current jobless or low-paying job situations. They are placing the blame on the wrong targets. They should be directing their anger at inadequate or outmoded training and education systems that do not provide the skills needed for the jobs that are currently in demand.

Demographic Time Bomb

The United States and the world are facing a structural labor-market race between advancing technology, on the one hand, and demographics and education on the other. In the United States alone 79 million baby-boomers are retiring between 2010 and 2030. The U.S. Census Bureau projects that one in five Americans will be 65 or older in 2030 and by 2025 the number of retirees will be enough to populate 27 Florida’s. While the US population is projected to grow to over 355 million in 2030, an increase of about 6 percent, the working age population 18 to 64 is only projected to increase by 2 percent.

Similar demographic shifts are also occurring in other nations in Europe and Asia. Birth rates are falling significantly in Italy, Germany, China, Japan, and South Korea to name a few. In these nations as in the United States, the working age population is supporting an ever-growing number of retirees. This demographic shift increases the importance of raising worker productivity. In most nations the current pace of education reform and worker retraining will be too little, too late. For example, in China about 70 percent of the labor force remains unskilled as its huge rural population is relegated to inferior schools where most students receive no more than a junior high education. (Rozelle, Invisible China)

The central premise of this “Job Shock” White Paper is that radical improvements in educational and training programs are needed to obtain a global labor force that meets the Fourth Industrial Revolution’s technological demands. American businesses have become over-reliant on importing foreign talent. However, as the world-wide war for talent heats up, it will be virtually impossible for the United States to use this strategy to compensate for our chronic domestic talent shortages. This situation is likely to become more acute between 2020 and 2030.

Lessons from the Past

This is not the first time the United States has struggled with job shock. Beginning in the 1890s the spread of electric power led to mass production methods in factories and population shifting from farms to cities. Factory technologies required workers with basic reading and math skills. To meet these expanded educational needs, compulsory tax-supported education gradually spread across the nation.

The launch of Sputnik in 1957 triggered the Space Race between the United States and the Soviet Union. This spurred the growth of the American aeronautic and defense industries with a consequent rise of jobs and careers in STEM (science, technology, engineering and mathematics) areas. Encouraged by federal funding, many initiatives sought to improve and expand STEM education and interest more students in pursuing careers in these areas. The 1970s saw the introduction of personal computers (PCs) in homes and businesses across the United States further expanding technical employment growth.

The good news is that there is not a fixed number of jobs in the U.S. economy. These past disruptive job transitions provide evidence that personal attitudes toward jobs do change and that the American labor market is very elastic. The new job requirements of the 1970s sparked a nationwide impetus for improving reading, math, and science instruction in elementary and secondary schools. There also was tremendous growth in educational options at the college level, and U.S. businesses developed in-house training and education programs for new and incumbent workers.

Today’s Job Demands

The Space Race and computer technology revolution produced islands of educational excellence but did not lead to the general development and expansion of education programs across the United States. The current education-to-employment system lags far behind the rate of change in the skill demands of the U.S. labor economy. Two-thirds of occupations now require post-secondary education, while a high school education or less suffices for only about one-third of jobs.

The challenge we now face is that only about one-third of our high school graduates leave school with reading and math comprehension at the twelfth-grade level. These skill levels are needed for the successful completion of post-secondary certificates, apprenticeships, community college two-year degrees, or four-year degrees.

Today’s technologies are increasing the importance of the ability to work in teams that often include workers in a variety of skill and job classifications. This in turn is heightening the importance of so-called “soft skills,” such as effective communication, problem-solving, self-motivation, time management, leadership, and ethical workplace standards.

The COVID-19 crisis has abruptly changed workplaces and skill demands worldwide. It is increasing the adoption of automation, robotics, and technologies that facilitate remote-work options. In this changed environment, adaptability has become a vital skill. A key to adaptability is the cognitive ability of learning how to learn as it enables workers to quickly gain new knowledge and analyze how to implement it to meet new workforce challenges.

We are now in the throes of Job Shock. Too many Americans both young and old cannot find a good job, and many have given up even looking for one. The U.S. labor market participation rate began a downward slide after the 2010 recession and has dived by two percentage points over the past year as the COVID-19 pandemic has decimated some sectors of the U.S. economy. (U.S. Bureau of Labor Statistics, January 2021) This makes the official unemployment rate an inaccurate barometer of workforce conditions.

The United States is now facing a need to provide updated education and training to two expanding sectors of the adult population – those who are not currently employed and those who need to transition to other occupations due to the impact of the COVID pandemic. In addition, the talent development needs of the current workforce must be addressed. In next month’s Gordon Report, the “Job Shock” White Paper will examine the current education and skills profiles of different segments of the U.S. population and what consequences we can expect over the next decade if changes are not made.

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Learning Objectives and Why They Matter

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Learning Objectives and Why They Matter

In tonight’s guest blog, Caroline Slee-Poulos talks to readers (and students) about learning objectives and why they matter.

Learning Objectives

If you remember more recent school days, you might be able to recall your teachers sharing your objective before each lesson. Depending upon where you are in the world, there might have been additional information provided to you: content standards, a learning map, a group recitation of the objective (this has a bit more from elementary school lessons than later years, of course).

Did any of you understand what you were doing with those objectives?

It really is a standard of best teaching practices to share the objective/s with students before a class begins. A learning objective is meant to tell a student what they should be able to DO or what they will KNOW at the end of the class. In other words, those learning objectives point you towards concrete actions and specific knowledge that will come from what you are studying. As a student, you should always know where you are going. The simple act of sharing those learning objectives can help you to focus on the subject at hand, and measure the course against those objectives.

How do you know you have mastered the content if you don’t know what mastery in the subject area actually is? As in so many aspects of life, communication is key.

Learning objectives should always be clear, specific, and focus the teaching and learning that will take place during the class.

Look back on your own education. Did you know what you were supposed to know and be able to do at the end of every class? Did your teachers share your learning objectives at the outset of every lesson? Importantly, did the class help you to achieve those objectives?

Learning should be intentional, and the way you are taught should be equally intentional. Whether you are in an online course or a face-to-face program, it is a joint effort taking place between the teacher and the student.

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Goal Setting

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Goal Setting

Tonight, our returning guest blogger Sonya Law talks to readers about goal setting. 

We will explore here how fostering a dynamic workplace incorporates the macro environment in setting goals where People are at the center of creating your competitive advantage…

As an employee, our manager will set goals for us which flow down from the strategic goals of the organization, and these goals are communicated clearly so that we understand how our performance is measured.  Traditionally this usually takes place as part of a mid-year and end-of-year performance review cycle.  The review is also an opportunity for two-way feedback, for the employee to receive performance feedback that will guide their growth and performance and for the manager to receive feedback on where the employee needs support to remove roadblocks that are limiting their potential, efficiency, and effectiveness in achieving the goals of the organisation.

Human Resources play a dual role, firstly to support employees in setting their GPS and aligning them with the strategic goals of the organisation.  Secondly, to support managers and employees when performance diverges away from the expected behaviors that lead to the achievement of these goals.

Quite often, overlayed are external factors for example the current Global Pandemic, which forces organisation to reorientate towards goals that respond to a changing macro environment.  The Pandemic continues to require us to have a workforce that is adaptable, agile, resilient, and able to respond to new problems and anticipate future ones.  And work creatively to come up with solutions to customer, supply, service, and delivery issues.

Three scenarios that put the achievement of employees’ goals at risk are:

  1. New Manager
  2. New Team
  3. Changes in process and technology.

These scenarios can be navigated safely, with minimal impact to employees when a dynamic work environment is fostered that supports employees to solve problems as they arise.  This grassroots level problem solving, therefore enabling managers to invest more time on the strategic side of the business.

This is a common problem in organisations where management gets stuck in the weeds fixing problems in their day-to-day and not enough time creating value for shareholders.  Human Resources’ role is to work together with the senior leadership team to create flow and foster a dynamic workplace where time is equated across the operational, tactical, and strategic needs of the business.

A dynamic workplace is a space that can easily be reconfigured to meet the company’s needs, accomplished by using resources, collaborative spaces and technology. It is meant to follow an employee’s needs, as reflected in the state of the world.

Organisations that become too linear and micro instead of a macro view, lose sight of the big picture, this narrow focus leads to inefficiencies in utilisation of your human resources and non-productive time that does not generate income to the business and cannot be recovered.  Further cracks start to appear in a reluctance to explore new markets or business opportunities, they leak resources, people, profit, and stifle innovation.  You will see a decline in quality and an increase in rework, warranty issues, product failures, and a damaged reputation, which is value eroding rather than value maximising.

Organisations gain a competitive advantage as compared with their rivals by empowering and enabling their people, they innovate, fail fast, and recover quickly, creating value for the business.

When employees are empowered to make the changes necessary in order to respond to customer’s needs, they can fix customer problems right then and there boosting trust and confidence in the product, aftercare, leading to repeat business.  When managers see their role as removing obstacles and roadblocks and empowering their team and involving them in setting their goals, this ultimately will lead to improved employee and customer satisfaction.

Managers can support the business operation by:

  1. TIME – blocking out some uninterrupted time regularly to ask employees what are their roadblocks and where do they need support
  2. REINFORCING – what we do and why we do it, connecting them with the vision of the company
  3. POSITIVE FEEDBACK – provide employees with positive feedback about their unique and valuable contribution
  4. ALIGNMENT – help employees where there is misalignment with the goals and support them to self-correct
  5. STRENGTHS – play to the employee’s strengths
  6. STRATEGIC GOALS – link employee goals with the strategic goals of the organisation
  7. VALUE CREATION – when you involve employees in goal setting, they will be more driven and committed to achieving them

A few human resources tools that foster a dynamic workplace are:

  1. Career Anchors – supports employees’ re-engagement with their work
  2. VIA strengths – identifies employee’s strengths and how to leverage them
  3. What makes me tick – helps employees to resolve conflict by understanding different communication styles within their team.

The benefits to the organisation and culture in fostering a dynamic workplace are:

  1. Higher levels of innovation
  2. Increased engagement
  3. Greater productivity
  4. Increased customer satisfaction
  5. Improved quality
  6. Lower staff turnover
  7. Stronger financial returns
  8. Agility and adaptability in responding to a changing macro environment.

Ultimately, a dynamic workplace constantly is striving to create a competitive advantage through its People that is unrivalled when it comes to your competitors, that is so unique that it cannot be replicated.  Many products can be replicated but not people, they really are your greatest asset and competitive advantage if you take care of them.  Demonstrate to them with your words, actions, and behaviors that reinforce their valuable and unique contribution to the organisation.

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Job Shock, Part One

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Job Shock, Part One

This week, we are proud to introduce a new guest blogger, Edward E. Gordon. In Job Shock, Part One, Gordon is beginning a three-week series of thoughts for your consideration. The founder and president of Imperial Consulting Corporation in Chicago, Gordon has consulted with leaders in business, education, government, and non-profits for over 50 years. As a writer, researcher, speaker, and consultant he has helped shape policy and programs that advance talent development and regional economic growth. Gordon is the author or co-author of 20 books. His book, Future Jobs: Solving the Employment and Skills Crisis, is the culmination of his work as a visionary who applies a multi-disciplinary approach to today’s complex workforce needs and economic development issues. It won a 2015 Independent Publishers Award. An updated paperback edition was published in 2018.

Job Shock Part One: Solving the Pandemic & 2030 Employment Meltdown

Introducing a New White Paper.

Part I: Introduction: Why Read This?

Welcome to the Fourth Industrial Revolution in a COVID-19 challenged world economy. Their combined impact on the U.S. job market will stretch to 2030 and beyond. Say hello to “Job Shock!”

“Job Shock: Solving the Pandemic and 2030 Employment Meltdown” will be released as monthly topical Gordon Reports. This will give readers a greater opportunity to consider their outlook on the future of employment. “Job Shock” will present our most up-to-date research on the future of the U.S. labor market over the coming decade. We will review both long-term and short-term problems and solutions to them that are now underway across the United States. “Job Shock’s” premise is that America’s students and workers are as much in need of knowledge injections as they are of vaccine injections against COVID-19.

Defining the Realities of Job Shock

Technologies that have transformed American workplaces now require higher skills. The United States is not creating more high-pay, low-skilled jobs; it is creating more high-pay, higher-skilled jobs.  Unless we confront the reality of this talent mismatch, we face a decade in which there will be too many unskilled people without jobs who run a high risk for lives in poverty and too many skilled jobs without people. This potentially threatens to undermine the broader economy and increase the social disruption that has already begun.

In today’s job market at least 50 percent of today’s “good jobs” (those with higher pay and benefits) do not require four-year college degrees. These jobs need students who graduate from high school with a good general educational foundation, i.e., strong reading/math comprehension, good written and verbal communication abilities, problem-solving and teamwork skills. Students then need to obtain a career certificate, apprenticeship, or a two-year degree from a technical or community college. We are not preparing enough students for the talent realities of the current U.S. job market.

The United States has millions of well-educated, talented workers.  But the unrelenting demands of Job Shock tell us that we will need to double their numbers over this decade to run our high-tech economy.

Job Shock from COVID-19

The ongoing COVID-19 pandemic has only exacerbated this skills gap and sped up employment meltdowns. It caused the sharpest increase in the official U.S. unemployment rate ever recorded, rising from 3.5 percent in February 2020 to a peak of 14.7 percent in April. At the close of 2020, 12 million of the 22 million jobs lost at the start of the pandemic had been regained. The December unemployment rate of 6.7 percent reflects the number of workers permanently laid off because of the pandemic. The labor force participation rate also remains low.

But the effect of COVID upon different industries and jobs has been very uneven. The leisure and hospitality sector has been particularly hard hit with its low-wage workers experiencing the greatest job loss. Payrolls for couriers and messengers have increased by over 20 percent.

While many businesses lay off workers, others are struggling to fill job vacancies. Overall U.S. businesses continue to cut job training programs, further widening the skills gap. Businesses are increasing investments in automation and technologies that facilitate remote work. The continuing Fourth Industrial Revolution will further raise demands for workers with the skills needed to invent, use, maintain, or repair advanced technologies.

The COVID-19 pandemic is illustrating that skill shortages can have lethal results.   COVID-19 vaccine manufacturers have hundreds of vacant jobs in such areas as engineering and quality control. There are acute shortages of critical-care doctors and nurses as well as lab technicians to process COVID tests.  How many of the over 400,000 dead (greater than the death toll of the U.S. armed forces in World War II) could have been saved if we had fewer shortages of medical personnel in COVID hot spots?

Also, the skilled people we take for granted to meet our daily needs are in short supply. As computer systems have become more and more central to our daily lives, breakdowns and threats to the security of our private information proliferate. Finding a qualified plumber, carpenter, electrician or medical technologist has become more difficult in many communities. If more effective talent development efforts are not initiated, there is a real danger that the world will not end in a big bang, but that it will come to a slow grinding halt due to a lack of workers with the skills needed to maintain advanced technologies. Welcome to Job Shock!

Job Shock Objectives

The goal of the “Job Shock White Paper” is to raise awareness of the broad scope of the changes needed to equip students with the education and skills needed for 21st-century jobs and careers. And we must retrain workers with the specific skills needed by employers. There are solutions already underway in communities across the United States that can help your local area. But these solutions are not easily available to all.

We see the most promising responses to Job Shock coming from regional cross-sector partnerships composed of business owners and managers, educators, parents, government officials, union leaders, non-profit associations, and others. These partnerships have begun regionalized initiatives to rebuild their outdated education-to-employment systems.

“Job Shock” is a call to action. We need to work together in initiating the systemic changes needed to prepare more people for better-paying jobs and thus create a more equitable and prosperous economy over this decade.

Part II of “Job Shock” will provide an overview of how technology has dramatically transformed workplaces and occupational requirements over the last 50 years. Unfortunately, other parts of American society have failed to adapt to these labor market changes thus contributing to the social unrest the United States is now experiencing.  We invite to submit your questions or comments by email or by calling us in Chicago at 312.664.5196.

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Principia for After-sales

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Principia for After-sales

In this week’s guest post, blogger Ryszard Chciuk offers us his Principia for after-sales, and brings us more ways to improve this valuable part of our business.

In Principia for Business I presented my personal view on the foundations of every organization. It was not a summary of the pile of publications on that subject I have read. In fact, I did not find there too many useful tips on how to build a durable and efficient organization.

In this and a few next posts, I am going to describe my own way of defining and implementing the idea of the main principles (values).

One of the main tasks of the founder of a new organization is to define the set of the most important principles binding its members. They should also know the long-term goals (have a look at the post about our vision). After that, they are able to find the proper ways to get closer to the goals. You will help your people in that process by telling them HOW you want to run your business to be different from the competition.

Another two important questions are: WHY you are starting up (Ron Slee explained his WHY in Why do we do what we do) and WHAT you are going to do for the wellbeing of your customers, employees, suppliers, environment, and yourself. Without a clear and public answer for those three questions a new entity is mined and the time bomb is ticking. It is my belief this is the main cause of going bankrupt by so many companies.

When I began to build the best after-sales organization in my country, Simon Sinek was not ready with his great TEDx presentation How Great Leaders Inspire Actions (54 million views since 2009). Just common sense told me that I should establish the main principles for my new team (apart from the long-term goals and mission). Some consultants say it should be done by a group of people. I dare to doubt. Only slaves must obey the rules established by their owners but free people always have a choice to work or not, for a given company. Its founder is entitled to set the main values. However, it is a must to discuss the meaning of values with all employees when somebody breaks any of the main principles. It is also helpful to celebrate when an employee finds a new way of better fulfilling any value.

The main values are important for employees when they have to take immediate action without the support of their superior. Very often they are not even aware that a required ­– in a given situation – behavior is described in detail in one of the dozens of special procedures. The older the organization, the more not understandable procedures, often written in a lawyers’ language.

Big companies define their values on a corporate level. In our case, they were: Quality, Safety, and Environmental Care. They seemed to me too general for the after-sales team I had the honor to create around twenty years ago. I defined the main principles as follows:

  1. Integrity
  2. Care of people and environment
  3. Profitability
  4. Excellence

It is not very common that the after-sales department has its own main principles (values) and purpose (mission) but I believed what I was doing was right. A few years later I found confirmation in Built to Last. Successful Habits of Visionary Companies by James C. Collins and Jerry I. Porras: There’s absolutely no reason why you can’t articulate a core ideology for your own workgroup, department, or division. If your company has a strong overall corporate ideology, then your group-level ideology will naturally be constrained by that ideology – particularly the core values. But you can still have your own flavor of ideology, and certainly, you can articulate a purpose for your own sub-organization. What is its reason for being? What would be lost if it ceased to exist? The concept of the core ideology embraces both mission and values.

It can happen the top management of the dealership does not know how they are going to run their business and does not bother about any values. Then CFO, Sales Director, and After-sales Manager lead their teams in accordance with completely different, opposite values. For example, CFO cares mainly about profit, Sales want to increase the number of sold machines, and After-sales are focused on customer satisfaction. The most dangerous is when they do not know each other preferences. Daily conflicts between managers are stepping down to the lowest level of the hierarchy. Employees do not collaborate with their friends working for another department. It is possible to avoid that problem. The managers have to look each other in the eye and tell each other the meaning of their main principles. Of course, their values have to be aligned with those the company founder believed in. Otherwise, it is a great waste of time to work for that kind of organization.

Next time I am going to share my point of view on the potential conflict between private and company values, how to write value definitions, the importance of constant reminding of the main principles…

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3 Reasons Your Business is Not Profitable Part 2

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3 Reasons Your Business is Not Profitable – Part 2

In Part 2 of his blog series, guest writer Bruce Baker continues to break down the 3 reasons your business is not profitable, and what to do about it.

REASON #2: Not Understanding the Flow of Money

It’s reportedly unhealthy for people not to breathe in and out regularly, so why expect this from your business?

 As was mentioned in Reason #1 of the 3 Reasons Your Business is Not Profitable, understanding how your behaviour impacts the outcome (money) is an important place to start. Not understanding how to control the flow of money in and out of the business will remove all the value you gained by working through Reason #1.

Just like the human body breaths oxygen in and carbon dioxide out, so does a business system breath cash in and cash out. The only difference is that humans do this automatically without thinking…most of the time!

On the other hand, a business only has the owner to regulate the amount of cash-in and cash-out of the company. The business owner’s problem is not understanding this rhythm and making decisions that do not lead to profitability.

breathe

Imagine taking a deep breath and enjoying the feeling as you feed your body its much-needed oxygen. Breathing out as much as you can and stopping there…without breathing in for 30-seconds. Not the best feeling in the world! The discomfort we feel is our central nervous system ringing the alarm, forcing us to breathe in again.

If this makes an individual uncomfortable, why would this be expected from a business effectively maintaining the same balance? Sounds logical, but why not simple?

Work through the following exercise to start eliminating Reason #2

#1: On the first day of the week, determine approximately how much money needs to leave the business (i.e., expenses).

#2: In response to money leaving the business, determine your “battle plan” on how you will meet his obligation (i.e., at least break-even). If you cannot, do not sweat it…you have more weeks to work with until the end of the month.

#3: On the last day of the same week, review your accuracy of what money you anticipated leaving the business and evaluate whether your “battle plan” in at least breaking even was effective. Remember, make notes, so each week becomes a more effective week than before.

*Remember… If you do not at least break even for the specific week, no worries! You have more than one week in a month! Leverage this to plan for the week after. For example, if $1,000 more left the business than anticipated, ask yourself how you plan to make up for this the week after.

The more you practice this, the more golden nuggets you will discover about this process and your decisions’ effectiveness.

The purpose of this exercise is to provide you with an intimate understanding of how the money system in your business flows. The fact that the business owner regulates the flow of money in and out of the industry means that a company by default is not a cold non-living entity.

This means that the profitability of the business is directly associated with the owner’s natural behaviours. Attempting to go against your natural way of behaving, ignoring why you behave the way you do, leads to a path of misery and an unprofitable business.

Embrace and leverage your natural human behaviours and do not allow Reason #3 to hold you back from building your profitable business –

REASON #3: Changing Versus Leveraging Natural Habits

To ensure business profitability is to abandon the traditional axiom of  Sales – Expenses = Profit and adopt Sales – Profit = Expenses

 The GAAP (Generally Accepted Accounting Principles) formula for determining a business’s Profit is Sales – Expenses = Profit. It is simple, logical, and straightforward but not effective in building a profitable business because it does not account for human behaviour.

In the GAAP formula, Profit is a “leftover,” a “final consideration,” or something that is hopefully a pleasant surprise at the end of the year. Alas, the profit is rarely there, and the business continues its cheque-to-cheque survival.

Why is this the case? As noted above, natural human behaviour is not considered. One kind of human bias that most are not aware of is the Primacy Effect (i.e., people’s tendency to place more importance on what they see or encounter first as opposed to last).

It does no good to expect to build profitability and reduce debt if “expenses” are positioned first in the formula as opposed to “Profit” being “second best.” A human being does not work this way, and ignoring this, ends with the business not being profitable.

Placing profit first and flipping the formula to Sales – Profit = Expenses allows the business owner to leverage their natural behaviour and habits. Leveraging our everyday habits instead of changing what we do naturally opens a brand-new world to business profitability.

Another human bias that impacts our ability to be profitable is Parkinson’s Law. Author and historian C. Northcote Parkinson theorized that our demand for a resource increases to meet its supply.

For example, when we are given 2-weeks to do a project, it takes 2-weeks, and when we are given 8-weeks to do the same project, it takes 8-weeks. That is why when given

$1,000 to complete our work, we get it done with $1,000, and when given $10,000 to achieve the same outcome.

Making Parkinson’s Law an asset vs. a liability is immensely powerful in building profitability. By taking profit first, the money available for expenses lessens, and we are forced to find ways to get the same things done for less money.

Work through the following exercise to start eliminating Reason #3

Make a great leap forward by reading a few chapters from my friend and mentor, Mike Michalowicz’s book – Profit First.

 I share the TFR system with business owners in my FREE group –  Profitable Business Owners

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Universal Design and the Classroom of Everywhere

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Universal Design and the Classroom of Everywhere

In tonight’s post, Caroline explains some of the elements that take place behind content creation in Universal Design and the Classroom of Everywhere.

One of the downsides in education is that we love, and I do mean LOVE, our buzzwords. We really do like to assign a catchy name to our processes. Tonight, I want to break down one of those key names and bring home what it can mean for you.

Universal Design for Learning (UDL) can be simply explained as flexibility. It is flexible in the way that students can engage, in the way materials are presented and made available, and in the way that students demonstrate their knowledge. This is part of what we bring to our students today. There are three main principles in UDL: multiple means of engagement, multiple means of representation, and multiple means of expression. In other words, a class is designed with the student in mind. This can be a paradigm shift for professionals: we don’t tend to think of ourselves as students, more as experts in our respective fields.

Continuous improvement comes with lifelong learning. It transforms you from being a professional exclusively, into a student at the same time.

The classroom is whatever you need it to be because this classroom is everywhere.

But when you set your own time aside to commit to your professional development, you want to be intentional about your classroom. Are you at work, immersed in the content you are studying? Are you at home, finding a quiet corner – or trying to – in order to focus on your class? Do you want or need a formal test before you select a course of study? Do you prefer to assess yourself and analyze your own skills?

These elements of your learning are entirely within your own control. When you sign up for one of our classes, we try to bring that element of choice and control to you as you study.

When you learn, when you set goals, you always need to consider, as Ron says “what’s your why?” In the classroom of everywhere, we try to answer the “how” for every student.

I invite you to explore our classes, our assessments and spend some time reflecting on your professional goals.

The time really is now.

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Information and a Call to Action

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Information and a Call to Action.

 

Recently we did a Podcast with Mets Kramer where we talked about the “Digital Dealership.” Then we had a Candid Conversation with Ryszard Chciuk on his work experiences in Poland over the past forty years. Then I caught up with Ed Gordon and we talked about “Job Shock” which is his passion. All of this takes me to Data and Information.

Over my lifetime we have gone from “Data” Processing to “Information” Technology. We have changed the name but I am afraid to say we have changed little else. I remember mounds of paper with all manner of data on them. No Information. Today I still see mounds of Data and perhaps a bit more Information. However, I don’t see, from either the Data or the Information, any call to action.

I recently reread a book by George Friedman and his team called “The Intelligence Edge” with a subtitle of “How to Profit in the Information Age.” It was written in 1997. Sadly, I don’t see much in the way of success in the Industries in which I work to have learned enough about this subject. We have made incredible strides in how we have transformed data into information. I myself can attest to that truth. However, what knowledge have we gained from all of this information?

Looking back, I suspect that we have become over-sensitized from the pains of the early 1980s when inflation ran away and then tandem of Ronald Reagan and Paul Volker finally got us out of the inflation bubble by inflicting high interest rates on us. That transformed most of the Capital Goods world by a rather shortsighted solution of reducing headcount. I know it was necessary for us to be able to survive with such punitive interest rates, however, in many ways, we are still suffering the consequences of that action. We don’t have enough people. I have seen altogether too many dealerships that focus on headcount. I am coming to believe that the result of this action is like cutting off your leg and telling your mother how successful you have been at losing weight. Yes, it is true that you weigh less than you did but you now have to function with only one leg. Hardly as effective as functioning with two legs.

I see the same thing in how we operate today with information. First of all, most of the information we get is Financial Information. While I agree that the financials are important. Yet they tell us about things that have happened but much about where we are today nor where we are going. Yet where is the Management Information that we need? Where do I find Market Share from the Parts Business or the Service Business? Where do I find the replacement schedules of equipment working in the field? I don’t see that Information anywhere in the dealerships.

Which people on the payroll are doing that research? Who is working with that information to deliver it to the leadership of the departments and the dealerships? Does the leadership get early warnings of things to come or the necessary action to take? I don’t see these employees in any of the dealers that I have been around. Sure, there are Marketing Departments. But I don’t see them providing this information. I see them maintaining websites and perhaps newsletters. Important work I agree but there is more to marketing than advertising and trade shows. I am talking about what the book calls “Intelligence.” Yes, like the CIA. Information gathering, creating processes and systems to collect and collate and consolidate information. Then to produce this information as a form of intelligence that can be acted upon.

“The Mortal Enemy of Intelligence is Time and Wishful Thinking.” This is a famous Friedman quote. He goes further in the book. “The ability to see the consequences of actions clearly, even when the perception run counter to conventional wisdom, requires courage and a willingness to be alone.” This is the struggle of the “Pioneer” isn’t it? The people who go out front. Blaze a new trail to somewhere. It takes courage to go off into the unknown. “Sometimes it requires courage to be wrong.” That might mean in the sense of the Pioneers, their death. Without them, however, where would we all be today?

Let me bring this thought process to an end this way from the book. “The will to believe that what the facts reveal, and the courage to act on those facts, is the foundation of success in all endeavors.”

I believe it is time we set up Intelligence thinking in every department and every dealership. Find the data and transform it into information. Then use that information in combination with intelligence to take action and strive to succeed.

The time is now.

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3 Reasons Your Business is Not Profitable Part 1

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3 Reasons Your Business is Not Profitable – Part 1

In this first of a two-part series of guest blogs, Bruce Baker shares with us 3 reasons your business is not profitable. 

The real truth is that there is NO REASON why you should be working so hard and seeing little return from all your efforts!

I always see business owners trying to convince themselves that this is “just the way owning and running a business is.” Let’s be honest, why the heck would you put so much blood, sweat and tears into something that does not even reward or engage you?

You may have already spent money on expensive consultants, business books and online courses to figure out how to build a profitable business and still pay yourself consistently and eliminate debt. Well, if you, like many other business owners, have done this already, you’re most likely know by now that it hasn’t produced much of a result for you and your business.

What if there was a way to ensure your business is profitable and remains possible. What if this was a reality and you were still able to pay yourself and wish your debt a final farewell?

Years ago, when I started my first business, I initially fell in love with the hopes of building a company that provides immense value to the market with excellent prospects of profitability. I did indeed add tremendous value but worked 12–15-hour days, 6-7 days a week! I became unhealthy, struggled to pay the bills, and dealt with uncontrollable debt.

All this with ZERO quality of life, GUILT from not spending time with my family…the list goes on! This made me realize that it had nothing to do with how much or how little money my business produced but how I was thinking about money and the time I was using to manage it. This led me to the system I called Time and Financial Repurposing (TFR), a complete game-changer for my business, clients, and hopefully for you!

*Repurpose: “to use something for a different purpose to the one for which it was originally intended.”

Stop wasting your time on traditional, outdated methods that get you little if any results! It’s time for you to take advantage of a system that is not new but is uniquely you and is as natural as breathing. TFR will transform how you use your time and money, ensuring your business is profitable!

I share the TFR system with business owners in my FREE group – Profitable Business Owners

ELIMINATE THE 3-REASONS YOUR BUSINESS IS NOT PROFITABLE:

1. Controlling money (the outcome) and not actions (the reason money exists).

2. Not being clear how money moves in and out of the business.

3. Trying to change who we are vs. leveraging what comes naturally to us.

REASON #1:
Controlling Money – Not Actions

Human beings are focused on the end result versus what and how their actions impact the outcome.

The pattern is ALWAYS the same. Business owners gauge their success with what ends up in the “bank.” How many times have you thought to yourself how hard you work, only to have to deal with this…look familiar?

Bruce Baker

So, where does this leave you? Disengaged and deflated!

Remember, the only reason your business produces “money” is through the decisions you make and the actions you take…that is it! We spend a ton of energy (in many cases negative energy) stressing about the money (the outcome) versus the actions and decisions (the driver) that produce money (the outcome) in the first place!

Bruce Baker

As one CEO and client of mine once commented, “I avoided looking at my bank account for a month and mysteriously ended up with a positive bank balance for the first time in over 3-years”.
Magic, alchemy? Not at all! Simply put, she moved herself to flip her focus from money to action. It was a challenge for her, but the success blew your mind!

Work through the following exercise to start eliminating Reason #1
#1: List all the actions and decisions you have taken in the last 4-weeks and identify which decisions were directly related to generating revenue.
#2: Identify which decision led to successful results (no matter how small) and which decisions did not lead to any results.
#3: List the reasons you defined the outcome as either successful or unsuccessful and what you will do the next time differently.

The purpose of this exercise is not to analyze your financials, but your behaviour(s) based on how you interpret a situation. Doing this, highlights how your emotional response(s) to a particular situation leads you to the decisions and actions you take and the outcome (money).
If you are noticing connections between your behaviours and the money outcome, move to the second reason which we will post next week.

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Distance Learning Victories

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Distance Learning Victories

In tonight’s post, Caroline shares the news of victories in the area of distance learning. As early adopters of the virtual classroom, we know a few things about that here at LWS.

As we all know, it’s been more than a year since the world as we knew it closed down, including our schools. I still remember very clearly the last face-to-face day I spent with my younger students in 2020. Distance learning wasn’t something new in the world of adult education, but suddenly K12 education was thrust into the same platform and style of learning. Now, face-to-face means someone turned their camera on during an online course.

Here at LWS, we began to shift into a virtual classroom several years ago. The software we reviewed and selected was on the newer side, most live meetings were conducted with GoToMeeting, and this “webinar-style” delivery was an exciting thing to help create. Fast forward to the pandemic, and the software options seem endless and Zoom is a household name!

I think it is safe to say that we have all heard the horror stories surrounding distance learning. Tonight, I would like to bring us back to focus on learning success stories.

One of the aspects of what we do here at LWS is student choice: we engage with adults who want to improve their marketable skills within their field. Since 2014, we have fine-tuned that process into what feels like a new “school” on this side of the screen. As each student progresses through a class, they now have the option of listening to the audio or just reading content or doing both together. When we first started our online classes, feedback from learner surveys indicated that Ron’s voice could run to the soothing side – so we made a shift. We have also started to switch narrators, as I myself have begun recording audio tracks as well. My voice is not as soothing as my Dad’s: my high school students swear it isn’t.

We have brought full, professional translations of assessment and classes into French and Spanish. For the student who prefers to skip a formal assessment, we offer the self-assessment: you choose your training path, and you select your skill level. We have even developed coursework based upon student requests.

Where we once offered only traditional, multiple-choice tests, we now offer short response, multiple-choice, and reflection responses. If a student doesn’t want to write that response, they can upload an audio file and simply give the response verbally.

Even though I tend to be the more silent of the two of us (don’t tell Dad I said that, he says I speak in “pages, not paragraphs”), I can tell you this: when students have choices about not only what they learn, but how they demonstrate that learning, success is the outcome. I invite you to join us and start building your success story today.

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