• Past is future and zombie economics

    by  • January 20, 2012 • Economics, General

    Read an interesting article this morning, and I am not sure what to think.

    From my own personal observations, much of what Godin says rings true. For example, Godin says:

    “The way we do business is changing fast and in order to keep up, your entire mentality about work has to change just as quickly.”

    That also seems to backed up by other business observers. Fast Company had a feature in their February edition called ‘Generation Flux‘ – great read about the speed and disruptive nature of modern business. Fast Company puts the same idea this way:

    “Our institutions are out of date, the long career is dead; any quest for solid rules is pointless, since we will be constantly rethinking them; you can’t rely on an established business model or a corporate ladder to point your way; silos between industries are breaking down anything settled is vulnerable.”

    This is probably measurable too, as we watch M&A activity, and new competition in markets from unlikely rivals – 50 years ago nobody thought you’d watch tv over your phone line, or may a phone call from your cable box.

    I think this is both exciting and incredibly scary. As Fast Company notes, business models are breaking down and being replaced everyday – only to cycle again. Failure and success is as much as matter of timing, as idea quality. But this isn’t new – the idea that being in the right place at the right time separates winners from losers has been observed and noted for years – Jeff Pfeffer talks about it in his research, and Peter Drucker noted it over 50 years ago.

    For that matter Drucker noted the end of the industrial revolution in 1967 with his defining of the modern ‘knowledge worker.’ Iconoclasts like Robert McNamara illustrated exactly the type of worker that Godin says is the ‘new’ archetype. Is this a case of what was old is new again? Or is this just a case of ‘zombie arguments’ such as the recession and job market are a result of structural unemployment. I believe Godin is arguing the latter, as he says:

     ” ‘the current “recession is a forever recession’…If you’re the average person out there doing average work, there’s going to be someone else out there doing the exact same thing as you, but cheaper. Now that the industrial economy is over, you should forget about doing things just because it’s assigned to you, or “never mind the race to the top, you’ll be racing to the bottom.”

    In other words, companies no longer hire warm bodies and train them to do their tasks, but rather they hire extraordinary people only that can do their job and more. I’ll get to the issue with the structural unemployment in a moment – but what Godin is really saying is that to be a successful worker in today’s economy you have to be both a generalist and a specialist (possibly a mult-specialty specialist) or a ‘Jack of trades and a master of all trades too.’ That is like hiring an internal medicine doctor to do a complicated surgery and expecting him or her to also do your taxes – while extreme, I think this illustrates the point. You would not have your prototypical IT guy as your PR guy too right? I think this is just a misunderstanding of what today’s employed are asked to do. Companies have been able to squeeze more productivity out of employees by consolidating responsibilities. In many ways we’ve been ‘juicing’ our productivity measurements by companies requiring employees to work more than in the past. The Atlantic addressed this issue this past October:

    “Here’s the trend: More productivity; high unemployment. It’s not just that Americans have magically gotten better at tasks, hours worked are up. Since 1977, the share of people working 50 hours per week has steadily risen for most demographics, as the Center for American Progress notes. What does that look like for in real life: Companies are requiring employees to work harder, longer hours.”

    So back to structural unemployment – Godin is basically saying to be employed you must have a wide array of specialized skills – and those that those that are not employed or are ‘at the bottom’ are there because they are lacking the specific skills that would cause organizations and people to find them. The economic climate today is a result of demand – if demand was higher – does Godin truly believe that those ‘at the bottom’ would have issues finding jobs? Probably not. That said, structural unemployment as a concept makes the unemployment levels the US (and world) has been suffering from much more palatable. Instead of the jilting idea that ‘it could have been me,’ with structural unemployment as a concept we are left with a concrete reason to justify why Bill or Susie had to be fired and a great feeling of self-confidence and worth in why we were not. For further reading, I’ll leave it to the folks that study this stuff to tear down the zombie argument of structural unemployment. Here, Here, and Here.

    About

    Patrick Sprouse has over a decade of experience in the commercial real estate sector. Mr. Sprouse has held numerous positions in commercial brokerage, real estate technology and executive operations on regional, multi-market and national scales. Currently Mr. Sprouse is providing management and technology consulting service for a private real estate services company based in Washington, DC with over $1.5 billion in 2015 revenue. Mr. Sprouse has an extensive background in business management, sales engineering, project management, software selection and business analysis as well as organizational change and brand management.

    http://www.patricksprouse.com