E-M8 Entrepreneurial Management to Eternal Mission

One of the ways in which the government can foster entrepreneurship is by extending the unemployment benefits to anyone in the early stages of business development. Being able to pay the bills during first six months in business would not just reduce business failure rate, but encourage more people to take a stab at it. Also, the fact that self employed and small business owners cannot collect unemployment is unfair at the very heart of the matter. They need it most desperately.

To avoid abuse, a lifetime cap of one year’s worth of the benefits can be setup. In reality many people are already moonlighting, this would just make it legal.

The whole system might add cost initially, but in a long run should result in more small businesses being started and thus a wider tax base.

I cannot wait for the day when the last company that has a Human Resource department goes out of business. Humans are not Resources, they are not Assets, they are not something to have, possess or exploit. The very fact that the departments that are tasked with the recruiting and development of workforce are called Human Resource Departments in many organizations, disturbs me to the core of my being. It is not an accident they are called that. That is precisely how they treat people.

They design recruiting process to screen people out instead of attracting them. They dehumanize people by trying to fit them in to standard roles. They complain when people do not fit their unrealistic molds perfectly. They say that there is a shortage of qualified employees, yet do nothing to help anyone qualify.

Slavery has been outlawed for a long time now, yet we persist in having warm bodies fill positions in our organizations. Then we wonder why everyone hates their job, the quality sucks and productivity is only achieved through automation.

One of the keys to reviving American businesses is to abolish HR. For that matter abolish most bureaucrats who are not directly involved in serving the customers. I, for one, am tired of having phone interviews with people who know nothing at all about the actual job that they are recruiting for. In my estimation, the managers are not worth their salt, if they need HR to do the hiring and training of their direct reports. If need be, have a coordinator, to help the scheduling and benefits. But do not call that person Human Resources Manager. Call this coordinator Workforce Developer, call that person Employee Relations Specialist, anything but Human Resources.

Words do matter. They matter plenty. The quicker we stop treating each other as “resources” that need to be “managed”, the quicker we might end up with a work environment that can actually support mass customization initiatives, instead of resisting them.

One of key economic for Obama is Dr. Robert Reich , and while I like most of his ideas and policy considerations I am baffled by him liking minimum wage laws. I will use Obama’s (and Dr. Reich’s) argument regarding their pro choice views (while neither endorsing or oposing them) to illustrate what I believe to be an inconsitency with the minimum wage views.

The argument goes like this: Instead of forbiding abortion is it not better to create a loving and supporting environment where people would have no reason to every have one done. Nice argument.

Let’s apply it to minimum wage laws: Instead of requiring business owners to pay minimum wages is it not better to create an environment where people have skills and the job market is competetive enough to ensure that the employers will pay wages that are way higher than a minimum wage and more in line with the living wages.

Please somebody explain to me how the same logic cannot be applied to the question of minimum wages. Most importantly, the practical aspect of it is that small businesses either will find ways to ignore this PRICE FLOOR (creating a black market and generating a surplus of minimum wage seeking workers); or they will compete more agressively in automating their processes and hiring specialists that can replace the need for manual labor; finally, if they can, they will ship the work to places that do not have minimum wage limits, like China.

The consequence of all of those actions is that people at the bottom of the wage scale will be constantly underemployed. Since many of the people on the bottom of the scale are either young, or disabled in some way, they will never have an opportunity to receive the on the job training necessary to transition to better compensated positions.

Whereas, a businessman would love to hire a 14 year old gofer (a kid that I can send to fetch stuff) for $2-3 an hour and allow him/her to just hang out, watch over their shoulder and learn the trade, today that is not possible. As a result, many 20-25 year olds have never worked a day in their life and never got the experiences that would aid and motivate them to get anything out of their formal education.

The consequence of the current system is precisely the thing that Dr. Reich works so hard to oppose: it is the separation between the skilled and the unskilled, the rich and the poor, the elimination of the middle class and semiskilled workforce that are both the heart of a sustained economic performance and strong democracy.  

If we are serious about increasing the quality of life for everyone, we should help people become valuable enough that the employers will want to pay them above minimum wage. Everything else is just another wa to force inefficiency and inflation.

Dr. Robert Reich (key Obama economic advisor) on his blog suggests that we should focus on demand side of economics by investing in infrastructure. I have something even more valuable for our government to spend money on than infrastructure (much faster pay back as well).

Spend it on the PEOPLE. Invest it inentrepreneurial, engineering, science, medical and other practical forms of education?

By improving our education (not just pouring more money in the current disfunctional system) we can once again become competetive. The best way to educate people is right in the mist of doing the jobs for which they are being educated.

That’s where infrastructure projects come in. We do need to upgrade our infrastructure, improve the interfacing, digitize our nation’s information and create better protocols for data exchange.

The government can sponsor these projects, documenting the ROI not just on the improved infrastructure, but on reaching the educational requirements of the contract. For example, I can build a really nice web site for $3,000 or for $10,000 I can guide a group of 6-8 people who have never designed a web site in their life through building that website. The government is better of paying me $10,000 since I have now created 6-8 people who are more employable than they were prior to this project.  So the infrastructure projects will not only generate a better infrastructure, but help people be more employable and thus likely making more money and paying more taxes. Teaching people to weld by welding, to desing by designing, etc. is the rebirth of the aprenticeship programs that our country desperately needs. 

It is quite simple to add a requirement for any contractor that wants to work on the infrastructure to have an educational component as part of their bids. The result will be not just better bridges, but more engineers, not just more secure internet, but more internet security specialists. It would finally put business teachers right where the belong, in the midst of the business.

What are your thoughts?

I am OK with GM bailout. On a precondition that is. All GM employees accept a 50% wage cut until are done paying back the loan. That’s not too drastic. Most of the country already gets paid less than half of the lowest paid union workers and definetly less than management.

Not only that, but the union contract has to be renegotiated from seniority to skill based meritocrocy. This way we will not have $35 an hour employees whom we cannot redeploy even at $12. 

The industry desperately needs these structural changes and while it will hurt for a while, we will all be better of for it.

This is how the management could sell it to the union: In exchange for a merit based contract, with substancially lower initial wages, the Union receives a seat on the board of directors and all management and supervisory positions become open to unionization. The Union doubles its membership and gains additional influence. In exchange, the company gets a Union that works with it not against it. It creates a transparent compensation structure that allows people to know what they need to do to make more money, and thus to control their own destiny.