Archive for May, 2012

Mismatch Between Small Business Hiring Needs and the Unemployed

Wednesday, May 30th, 2012
Too Complicated!

Too Complicated!

National Small Business Week, which just wrapped up this past weekend, is the occasion for everyone and anyone in Washington to proclaim how much they love small businesses, which, after all, created two out of every three new jobs over the past three decades. The Obama Administration’s contribution to National Small Business Week, courtesy of the National Economic Council, is a “Congress To-Do List” presented in the recent report “Moving America’s Small Businesses & Entrepreneurs Forward: Creating an Economy Built to Last”.

I believe the single greatest obstacle to scale and grow businesses is the lack of candidates qualified for employment. As such, I read with great interest the NEC report’s policy recommendations for investing in worker skills and training. Sadly, they are largely a re-tread of two generations of failed federal programs for workforce development.  But a careful analysis of the proposals and existing programs suggests a more effective approach, which I outline in an op-ed piece published today in the Huffington Post.

To its credit, the Administration has correctly framed the issue. The NEC report acknowledges that small businesses are reporting shortages of skilled personnel to fill critical roles even as we continue to experience high unemployment. The President’s proposed solution is an $8 billion Community College to Career Fund. The President appears to believe that lack of funding for job training initiatives at the community college level is an obstacle to creating pathways to employment. The American Graduation Initiative he proposed in 2009, for example, called for $10 billion in funding for community colleges, but received only $2 billion from Congress.

Lack of funding is not the problem. The problem is that the Community College to Career Fund, like its predecessors the Federal Workforce Investment Act (“WIA”) and the Job Training Partnership Act, does not exist to train the workers that the private sector desperately needs.

Consider the WIA tuition grants, administered by the “One-Stop” job centers of the Labor Department in local communities. The grants award up to $4,000 for approved courses at eligible training providers, typically community colleges and other public institutions.  The federal government establishes a performance metric for states to receive federal funding: 75% of those receiving training must secure employment.

No surprise then that the states’ WIA annual reports reveal success in meeting performance metrics. After all, the state workers want to keep the federal funds flowing and with it, their own jobs. But the 75% rate is achieved by establishing barriers to entry that restrict access to training. Only the most determined and skilled can comply with the onerous WIA program requirements, the very people most likely to find jobs anyway. A review of state WIA annual reports of some of the most populous states that beat the 75% metric finds that only 2,000 or so displaced workers in those individual states received training grants. This does not come close to achieving the scale required to lower unemployment.

And I am skeptical that the people who attended workshops, met with facilitators, were counseled by case managers, passed three-hour tests of basic skills, certified job logs, and invested at least two months in completing all of the scheduled tasks required to at least be considered for WIA training grants, obtained employment at our most promising start-ups. The WIA training grants cover courses for “industry-recognized credentials”. The most entrepreneurial firms have disruptive business models and technologies. We have no use for people schooled in the status quo we seek to overturn. I believe that the President’s solution simply throws more money at failed training schemes. In my op-ed piece, I propose a better alternative.

A New Orleans Institution in a New Era

Tuesday, May 29th, 2012
Cafe du Monde

Cafe du Monde

A fun morning ritual of my frequent visits to New Orleans is enjoying coffee and beignets at Cafe du Monde (shown here in one of my older photographs) while reading the local newspaper, the Times-Picayune. So I was saddened to read that its print schedule has been reduced; it will now print only on Wednesdays, Fridays and Sundays, leaving New Orleans without a major metropolitan daily newspaper. More resources will be shifted to the web for digital news gathering and reporting. In my work with local small businesses on disaster preparedness and recovery issues, I have had the pleasure of meeting reporters from the Times-Picayune, who shared their stories of working through Hurricane Katrina, for which the paper won two Pulitzer prizes. Reporters and editors worked round the clock to give the community critical information even as their own families and neighbors evacuated and their own homes flooded. Their dedication to duty was a constant when everything else in the city was in upheaval. In the aftermath of the storm, the Times-Picayune doggedly pursued stories of promised relief aid, what worked and more, often, what didn’t. More recently, the newspaper has provided consistent coverage of local corruption and brought needed transparency to institutions that had not been held to account. What I most appreciate about the newspaper is its broader civic commitment.  Times-Picayune reporters have shared with me their experiences and lessons learned about disasters to contribute to sharing best practices with the larger small business community. While struggling and failing newspapers across American communities have sadly become the norm, the loss of the daily paper in New Orleans has particularly severe impact, given its contribution to building back a better New Orleans. In a city where many institutions are dysfunctional, the Times-Picayune is a world-class institution that inspires local pride. I hope the paper finds the means to return to its daily print schedule. New Orleans is a poorer city without it.

Memorial Day Reflections

Monday, May 28th, 2012

As we enjoy the holiday and honor hose who served, I wanted to call attention to an expanded tax credit to motivate hiring veterans, who are more likely to be unemployed than those who did not serve in the military. Late in 2011, the Work Opportunity Tax Credit was expanded to offer as much as $9,600 per eligible veteran hired by a for-profit employer or up to $6,240 for tax-exempt organizations. The amount of the credit varies according to the length of the veteran’s period of unemployment, the number of hours he or she works at the new job and the amount of first-year wages. The credit is maximized for employers who hire veterans with service-related disabilities. The new hires must be certified and there is some required paperwork. Check with your accountant for guidance or read the details on the IRS’s website.

One Year Anniversary of Joplin Tornadoes

Friday, May 25th, 2012

This week (May 22) marks the first anniversary of the Joplin tornado, the deadliest tornado since 1950, when modern record keeping began. The devastation (158 fatalities and over 1,000 injured) has strengthened the national commitment to build resilience to extreme weather events. This month’s issue of Scientific American has a great article from NOAA Administrator Dr. Jane Lubchenco and National Weather Service Director Dr. Jack Hayes about how new technologies will increase warning times of impending storms, thereby saving more lives. It is a great article. I was in the Joplin area in September 2005 when I spoke at an event with a local technology firm. When I reached out to my contacts there on the occasion of this difficult anniversary, I heard a consistent story of amazing progress made towards recovery, but there is still a long way to go. They report that visitors are taken aback by the scope of the disaster, even as locals are proud of how far they have come. Perspective is everything.

United Nations Leadership Highlights Disaster Prevention as a Key Priority for 2012

Thursday, May 24th, 2012
UN Leadership

UN Leaders Prioritize Disaster Preparedness

United Nations Secretary-General Ban Ki-moon has identified the prevention of disasters and making the world safer among his “five generational priorities” for 2012 through the remainder of his second term. Mr. Ban stated “We have to connect the dots [between] climate change, [the] food crisis, water scarcity, energy shortages and women’s empowerment as well as global health issues. These are all interconnected issues.” The UN Secretary-General believes that  said solutions lie with harnessing “the strong power of partnerships” to respond to the planet’s biggest challenges, such as tackling climate change, combating poverty and empowering women and girls (who are especially vulnerable to major disasters). “Together, nothing is impossible,” said the Secretary-General, adding that “if we strengthen these partnerships among governments, business communities, civil organizations and philanthropists, then I think all these powerful partnerships can bring us towards the right direction.” The Secretary-General shared the story of his meeting with a boy during a visit last year to the South Pacific island country of Kiribati which, threatened by rising sea waters – as an example of the enormous faith and expectations which the peoples of the world invest in the UN. “He appealed to me to ‘Please help us address this climate change. Our homes and our way of life may be swept away overnight’,” Mr. Ban recalled, saying it is one of the reasons why climate change must remain at the top of the global agenda.

Disaster preparedness was again a key priority among three others identified by Nassir Abdulaziz Al-Nasser, President of the 66th Session of United Nations General Assembly in his end of the year address to usher in 2012. Mr. Al-Nasser said that in 2011, the Great East Japan Earthquake, floods in Southeast Asia, and the crisis in the Horn of Africa, had tasked the international community to intensify efforts to improve disaster preparedness – the third pillar of the Assembly’s 66th session.  “Though much has been done to share lessons and improve systems of alert and quick response around the world, we must do more to implement policies and measures that can mitigate the impact of natural disasters and also address or prevent man-made catastrophes”, he said. The United States is one of the 166 countries that signed the Hyogo Framework for Action, a global commitment to reduce disaster risk. I am beginning work on a related project for the UN and will share more details in the future.

Celebrating the American Red Cross

Wednesday, May 23rd, 2012

This weeks marks an important anniversary as Clara Barton founded the American Red Cross on May 21, 1881. I have long supported the Red Cross. I have decided to pay tribute to the American Red Cross by publishing interesting Red Cross trivia:

  • Did you know that the U.S. Army Corps of Engineers helped build the American Red Cross headquarters?
  • The American Red Cross offers training to certify babysitters to more safely care for children.
  • The Red Cross also offers training on pet first aid.
  • The President of the United States is always the honorary chairman of the American Red Cross.
  • The American Red Cross supports the work of the chapters of the International Red Cross by, for example, supporting relief work in Haiti and other disaster-affected areas.

I invite Red Cross volunteers to expand on this list!

You Are Responsible for IT Strategy

Friday, May 18th, 2012

Stefan Dietrich PhD, my IT guru and co-author, has an excellent post on Forbes titled “Why You Cannot Rely on Vendors for Your IT Strategy”. The text of the article suggests a focus on large enterprises with a corporate Chief Technology Officer, but the insights apply to small businesses as well. I appreciated two point in particular; first, he writes that choosing the wrong information technology strategy can be extremely costly. Indeed it can and one of the advantages of being a smaller enterprise is that we need not be confined by outdated legacy systems. But if we are passive in our approach and allow our vendors to dictate our IT strategies to us, then we have surrendered a key source of competitive advantage: the nimble and responsive nature of small businesses. And smaller businesses have to husband limited resources more carefully; we cannot afford the long-term costs of bad IT strategy decisions. The costs of bad decisions exceed the costs of inappropriate hardware and software purchases; the costs represent the lost opportunity and limited alternatives that are the result of being locked into decisions that benefited the vendor, not your business. The second point in the piece that really resonated me was the needless complexity that result from vendor-dictated solutions. Their interest is promoting their offerings, not your productivity.

I recently held a conference call for my classmates from the Owner President Management Program (“OPM”) of the Harvard Business School featuring Stefan as our speaker. OPM is an executive education program HBS offers for founders of fast-growth entrepreneurial companies. The call was organized in response to a query from one of our classmates concerning choices in IT and telecommunications systems. Her message resonated with the class, as many of us has a “me-too” story of frustration with the lack of transparency in comparing IT solutions. Stefan was as candid on the call as he was in his Forbes article. We finished the call with a consensus view that we needed to take an active role in charting IT strategies for our business. Many of us had taken passive roles in deferring to the “experts” only to be disappointed with the outcome. Do read the article and pass it on to others. You will find it helpful in framing your thinking about IT strategy.

Managing Travel Delays

Tuesday, May 8th, 2012
View from the gate

The rain is not to blame

File this under the heading “So that is how it works”.  Imagine your flight arrives on time, but you cannot collect your baggage. Frustrated passengers pace back and forth and then you find a helpful airline employee who fills you in on what is going on.  The passengers had been led to believe that the light drizzle of rain (check out the photograph) was responsible for the delay. Actually, the baggage handlers will collect overtime if they can unload your bags just a little bit later. So while you are eager to take your luggage, leave the airport and get on with your life, you are being held hostage to the fine print in their union contract.  But other travelers do get their baggage right away – the elite tiers of the frequent flyers. So we asked and learned – the baggage of the elite tiers of the frequent flyer (platinum, gold, whatever they are called) are unloaded by a private sector company with which the airline has a contract. They are not union workers and they have no incentive to delay unloading the bags. So that is another unadvertised benefit of accruing your miles on a single airline to qualify for the elite tier status.

I will likely be blogging more about business travel issues as they relate to disruptions (minor disasters) and remote productivity. I have just been appointed to the Globility Board, the board of advisers for Global Traveler magazine. I am quoted in the article announcing the new board, saying “As an entrepreneur, I recognize the importance of face-to-face meetings to build relationships, but I am also attentive to the costs associated with business travel; I seek to maximize value for dollar spent. I am willing to pay for the amenities that enhance my travel experience and remote productivity, but I want to see value for the spend. That is a different approach from across-the-board cost-cutting that is often in place in larger corporations.” Please let me know of your travel experiences and feedback that you would like to share with the airlines, hotels and other travel vendors. Small businesses are important customers and we need to be heard.

Digital Spring Cleaning

Monday, May 7th, 2012
Lily of the Valley

Spring Lilies of the Valley

In addition to the usual housekeeping tasks associated with spring cleaning, I am completing a digital cleaning project for my business. It doesn’t provide the same sense of satisfaction as routine housework in that I don’t have the gratification of seeing clutter or dust removed. But when I sit down to work at my computer, I feel a sense of calm that comes from order. I recommend this process for all small business owners. It facilitates your business continuity planning, since you will only be backing up and tracking the files and applications that you actually need and regularly use. I began my removing software applications that I no longer use, thereby ending the obligation for their licensing fees. I made certain that all of my current software applications are up to date. I organized my digital media files, including audio, video and graphics, with a tagging system for more efficient retrieval. In case of duplicates, I retained the highest quality file. I made certain that all of my directory and contact information is up to date, streamlined my databases and confirmed my file taxonomy so anyone can find a file without reading my mind. I also deleted all of the junk files. It is great to sit down to the computer in apple-pie order. Next, I am organizing my home and personal files in the same manner. I am also doing the more conventional cleaning and de-cluttering tasks. I have sold or donated over 1,200 books, some of which I have had since high school. One month later, I cannot remember which ones are gone, that is how infrequently I consulted them. I read that one reason for the popularity of e-readers in Japan is that they enable large libraries in small homes. I already feel lighter. This photograph, by the way, is of lilies of the valley that are now ubiquitous in my neighborhood. The lilies and the clean home and office are a sign that spring has arrived.

Pet Training as Contingency Planning

Saturday, May 5th, 2012
Dogs on the Beach

First Beach Visit for Coco and Henry

I recently adopted a second cocker spaniel, this one from a local rescue shelter. An animal control officer picked him up and as he lacked identification, he was listed for adoption as “Franklin”, for having been found in February. I named him Henry, a name he now responds to as his own. Unlike Coco, my first puppy, Henry has a history with another family that we will never know. What we do know is that he was found on the streets without a collar, a tag or a microchip and no one came to the shelter to claim him during the mandatory hold period, when his photograph was posted on Petfinder.  When the hold period expired, he became available for adoption. I had brought Coco to the shelter to meet him to see if they would be compatible as sibling playmates. There was little interaction between them during this visit; Henry was very anxious. His nervousness was evident in profuse sweating through his footpads, which left prints on the floor. It is difficult to assess a dog in the stressful environment of a rescue shelter.

So I was quite surprised when I brought him home. It was quite an adjustment for all of us, as Henry shifted from hiding to interacting with us, and finally, feeling comfortable and totally at home. It took about a month for him to be integrated into the family as I worked with a trainer to deal with some of Henry’s more difficult behaviors, like chronic barking. I remember commenting to our trainer that owners do their dogs a terrible disservice by not socializing them and investing in their obedience training. A visit to reveals stories of dogs that are homeless because of human problems: foreclosures, evictions, relocations, divorces, deaths, loss of independence of elderly dog owners, etc. Dogs that are not socialized or trained are difficult to place in permanent homes. I read that nearly one-third of dogs are returned to shelters within two months of their adoption. In most cases, the dogs are returned because of behavioral problems; the cuteness wears off very quickly once the dog is home.

The first month I had Coco we participated together in Puppy Kindergarten. Class met one evening each week as a trainer led five puppies and their owners through basic obedience training (loose leash walking, the name game, coming when called, sit, stay, etc.). It gave me more confidence as a dog owner. It also provided some assurance that should I ever, through death or disability, be unable to care for Coco and now Henry, the relative in whose care I have arranged to entrust them would not be overwhelmed and surrender them to a shelter. It is my responsibility to make sure that they have a loving “forever” home and training-socialization is part of that commitment. I also realize that should we ever have to evacuate due to a disaster, it would be a secondary disaster to have to get into a battle of wills with a dog who doesn’t come when called, walk on the leash or whose behaviors compound what will certainly be an already stressful situation. Better to deal with the behaviors when the environment is calm.

I am so glad I brought Henry home. All he wants is to love and be loved and be part of a family. It is amazing to me that this little creature, who was sweating and pacing when we first met in the shelter, is now climbing into my lap and gently taking treats from my hand. He acts as a very protective older brother to Coco and intervenes when he thinks her play with other dogs is getting too rambunctious. By the way, this photograph shows our first visit to the beach. Coco and Henry are checking out the seaweed, digging in the sand and walking along the beach (it is still too cold for swimming). Then we had a little clambake and they enjoyed bowls of cool water and doggy cuisine while the adults had clams.