Job Specialization

I am amazed at how this economy has amplified job specialization. For those that have managed to survive their careers undamaged at this point in this difficult economy, you had better hope you like what you do. It has always been puzzling to me how executives, senior managers, and middle managers can change direction with their careers or transition into other industries. Competition for open spots has definitely gravitated more over the years to specialization, and the generalist has seemed to fade further into the background.

However, now with so many people looking for work, the supply and demand equation has made it a huge employers market. I have seen some job postings lately that are almost humorous in the nitty gritty requirements that are listed. Recruiters often come across like "if you haven't done this exact job for someone else please don't apply". And the fact is, no matter how specific the requirements are, in most cases they find the person they are looking for.

But what about the talent that is out there that has the ability to adapt and ramp up quickly with accelerated learning curves? What about people that can bring a fresh perspective into a company and a role instead of Mr. "This is how we've always done it in the business"? Maybe how we've always done it is part of the explanation for why things aren't going to swell lately.

I would like to think there is still value in a generalist approach. Someone who has good analytical skills, is a good communicator, understands the consultative role of selling, can develop and lead people, and can bring a fresh business development approach to a company has to have value, even if they haven't sold this exact product category in this specific industry for a minimum of this many years and achieved this percentage of this sized market.

In fact, I would wager that some of those folks are even more valuable.

Bankruptcy as a "mulligan"

I've never pretended that I have a deep understanding of how corporate bankruptcy really works. But after seeing what has been happening of late -- two of the big three automotive manufacturers, plus going through it with my own employer -- I've come to question the purpose, the fairness, and the ramifications of the process.

In golf they call it a "mulligan". That's when you hit a tee shot you don't particularly care for and just decide to hit another one that you will like better. Don't count the bad one against your score that you are ultimately judged on, just pretend like it never happened. There seems to be similarities in the Chapter 11 reorganization bankruptcy process. Don't worry if you have made bad decisions, engaged in contractual obligations that have not turned out well, or lacked the vision to invest for the future. Just press the "11" button, flush it away, and start with a clean slate.

With the automakers, it seems like they had to turn to the courts to get them to do what they were unable to do for years regarding unfavorable union contracts. The courts get to be the bad cop? In the meantime, how many little suppliers end up recouping pennies on the dollar of their receivable balances, thus jeopardizing their own future. What about people like the man who lost his wife and mother of his kids in a horrific accident where she burned to death after the gas tank exploded? The product liability lawsuit?.... sorry, dismissed with a bankruptcy filing. Pretty heartless mulligan.

I always assumed that the word "bankruptcy" had dire consequences. Once filed, the company would have trouble securing funding, keeping paying customers, acquiring new ones. But what I have seen lately makes me wonder if the downside to filing is anywhere near as dire. When you hear that automakers might emerge after only a month or two as a newer, leaner organization built for success, or when my employer plans for a quick turnaround into a bigger, better, stronger, faster, organization, it makes you wonder why more folks don't jump on the old Mulligan train rather than have to make all those difficult and unpleasant decisions.

"10 big banks given approval to return $68 billion in bailout money"

Those words appeared in a recent L.A. Times business section article. I believe the world has gone mad. Maybe next is the announcement that the sun will no longer rise, that gravity no longer exists, or that death and taxes have ceased to be a certainty in life.

How ludicrous does it sound that a lending institution must obtain approval to repay a governement loan? The article also points out that many of the banks felt they were "forced" to take the money by former Treasury Secretary Paulson. So which was it -- banks were on the brink of failure due to an overwhelming amount of poorly underwritten loans, or they didn't need the money? The average person who does not have in-depth knowledge of the financial markets must have more fear and mistrust than ever with the inconsistencies that brought about this crisis and the explanations since.

Just months ago there was widespread panic that paralyzed the credit markets. Now the very moves that were made to ease that panic are being viewed in hindsight as "we didn't really need it". Yet at the same time the article says that three of the largest banks still are not healthy enough to pay the money back.

So what is the truth? Did these institutions really need the money to avoid collapse, or was the whole thing a symbolic gesture to build confidence and avoid panic? Or is it more the case that the lenders don't like the stipulations that go with the loans regarding executive pay caps and restrictions on dividend payments. I would tend to lean toward the latter.

Smith Barney et al

The value of the brand

In today's mail, I received a notice from MorganStanley, my main broker, announcing they have joined forces with SmithBarney. The new firm is "MorganStanley SmithBarney". Originally I was a client of "Dean Witter", which became "MorganStanley DeanWitter" for a while until Dean and Witter departed and they became just "MorganStanley". And if memory serves, years ago I was a client of E.F. Hutton and they joined forces with SmithBarney, presumably so they could become "E.F. Hutton SmithBarney". So I guess I am now a client of "MorganStanley DeanWitter E.F. Hutton SmithBarney".

In the banking arena, I have switched banks 5 times over the last 15 years or so without ever actually switching banks. I went from Meridian to Core States to First Union to Wachovia and now Wells Fargo. I'd like to be the sign company at the arena where the Philadelphia Flyers and 76ers play. One building changes from the Core States Center to the First Union Center to the Wachovia Center in just a few years. Will they dare order one more sign change to the Wells Fargo Center now?

Whatever happened to the value of the name brand and brand loyalty? Has it become irrelevant? How much money, time and effort goes into building the brand name? What if I really place a high degree of trust and value in MorganStanley but think little of SmithBarney? What if I don't want to be a Wells Fargo customer?

I realize that mergers and acquisitions have been part of what makes our capitalistic culture tick. However, between companies failing in this economy and others too weak to survive on their own, it almost seems like very few companies will eventually own everything and competition will be diminished substantially.. These days it just seems that the brand only has meaning for a while only to fade away. At least I'm not a loyal Pontiac buyer.

GM dealership closures

I’ll never forget the day early in my career working with automotive retail dealers. I was working in Southern New Jersey and noticed that I had passed four standalone Chevy dealers on one stretch of highway. The distance from the first to the fourth was 15 minutes and could not have covered more than 25 miles. None of the stores, even back then, approached 100 cars sold a month, and most were in significant states of physical disrepair. I thought to myself, “How many Chevy dealers do we need in a world where less people seem to want to buy Chevys?”

Recently we learned the answer is – not nearly as many as we have. Now comes the painful part. After years of the decline of the domestic car business, a lot of dealers will close, a lot of jobs will be lost, and a lot of blame will be passed around. Paul Taylor, Chief Economist at NADA, argues that the contraction is unnecessary. That’s a tough argument to prove. The arrogance of the Big 3 over the years somehow seemed to mask an obvious and well-published decline in their business base. It was almost like they believed they could just turn it around as soon as they put their mind to it, analogous to a sports team heading in the wrong direction at season’s end and still believing they can fix everything come playoff time.

There is no single source of blame for this huge mess. Unions that now want to come across as the most cooperative of negotiators were purely hard-line when the decline first started. Executives managed to reap huge financial rewards for bad decisions and lack of vision, unable to wean themselves from the high margin drug that came in the form of large gas-guzzling vehicles. And the games that were played to make the public believe that domestic cars were still in demand (i.e. rental car fleets) just masked a growing ulcer that has now ruptured.

So now a lot of businesses will close, and shopping for a domestic vehicle will be more like the experience of shopping for a Lexus or an Acura, where you might have to drive more than 5 miles to find the dealership. Did anyone think this was going to end differently?