I just heard of Roger Boisjoly’s death at 73 of cancer to the colon, kidneys, and liver and got me thinking of a turning point in American history. What most people don’t realize is the days before and after the Challenger Disaster mark the start of real change in the balance of power between senior employees and management.
Roger Boisjoly was the lead aerospace engineer for Morton Thiokol six months earlier he warned MT of a fatal flaw in their design and that there was a total failure of the number one “O” ring on their solid fuel booster during a 10° lift off and that under cold conditions a total failure would occur again. Guess what the day did come January 28, 1986 the morning temp at the cape was 0° and he and six other MT engineers spent all that night begging MT’s and NASA’s management not to launch that fateful morning, but the TV coverage wouldn’t be there in two days! So MT & NASA management ignored the warnings of the team of 6, 100,000+ hour engineers. Guess what? Statistically speaking it takes 10,000 hours or 5 years at 40 hour weeks before you start to be good at your job and if we look at Nobel Prize winners they took on average 100,000 hours to come to the concept that brought them the Nobel Prize or become an expert in years that is between 20 and 25 years. So on average it takes 20 to 25 years of work to get to the top of your game for most folks including Nobel Prize winners, so folks don’t become good over night.
Skilled labor is significant:
Alfredo Parado 1900 Century Italian Economist who discovered the theory of the Significant Few = 20% that produce 80% of the results. Well, most folks also don’t know that the science of ergonomics was driven by liberal businessmen like Edison and Ford. Ford’s assembly line was a study on human motion. Productivity gains were driven by gains in the understanding of how folks could work smarter, but today that isn’t the focus. It is on cost savings and gains are forced onto workers today in a sink or swim after job loss and the job loss is from those with the most experience being pushed out, because of three reasons. That causes a short term spike (six month period) and a long term drop as they give up that pace, because it is unsustainable. That is what has happened this year.
An expert has an 80% probability of being right over a non-expert’s 20%. A 100,000 hour employee has a huge investment in the success of the company he is working for, he has put in 20 years or more in that company, so he is a natural company man and he knows the rules of the Company, so when a 100,000 hour employee, gets uppity, he is certain of a bad for the company outcome, so the real outcome probability is like 99% to 1%. We had the Challenger disaster, which put the shuttle program on hold for two years, because the 1% trumpted the 99%. For his honesty and integrity Roger was shunned and forced out of his job shortly after, even though MT instituted all of his design modifications years later.
Even though whistle-blower laws were put on the books, Reagan Administration soon also put on the books their own counter balancing laws and incentives to destroy anyone who could be a Whistle Blower or could embarrass management, like 25 billion in deductions to subsidize the export of jobs out of this country and thus a new word was invented during the 1980’s – “Outsourcing.” Who are the main customers of the Unions: the 100,000 hour employee who understands the needs for a Union’s services; or the recently employed who is new and dumb to some of corporate life? Next, the Reagan and Bush administration appointed “Conservative Judges to the lower and higher benches, who have over their career, so limited Age Discrimination Laws, that today they are on par with the Anti-Discriminations Laws for Blacks of the Jim Crow Period. This conclusion is not mine, but based on testimony in the last years for the US Senate.
Understand Ronald Reagan’s Conservative Southern Landowner’s Styled Management Team’s Image on how things ought to be run, runs contrary to any shared decision making model. They were brought up right or wrong Management (Southern Landowners) were always right and any folks who went against (got uppity) the strong and dominant leader (Male Macho Image) weren’t not only non “Team Players,” but betrayers of the Team’s leader (CEO) and that is an unforgivable sin and to be gotten rid of any way shape or form. So after the Challenger Disaster, the Reagan administration stood by and watched Roger Boisjoly get shunned and pushed out and did nothing, it wasn’t until Senate Democrats that laws were put onto the books, after that fact, but these Laws too have been narrowed by the Reagan/Bush Conservative Judges. They have re-enforced today’s Bull-shit, Bully, discredit, Shun, Push out, all else fails fire, any worker who gets uppity Southern Management Style being used in many companies today.
An OK example of this was told to me about two years ago, A top performing (top in the district sales) person had moved on, he and a gal were on the same level and they were friends the week before, but she was given promotion over him. In the first meeting, after the promotion, he greeted her in locker room language, as still one of the boys, “How the “F” are you and congratulations!” Shaking her hand. When she spoke in passing to her supervisor, his answer was, “what are you going to do about it?” Translation he is treating her as one of the boys and she was no longer one of the boys, when are you going to fire him? He did a cardinal sin that day in the Southern land owner’s way of management. Now agree the colorful metaphor wasn’t needed, but I participated in team sports heard worse and getting really pissed and inadvertently swearing (one of the few times I have) and having the Base Commander give me one look and say we don’t talk this way here. So it doesn’t take firing just a presents of mind, but this is also how this system is re-enforced down the management line.
Outsourcing is a Win, Win in the 1980’s and now?
With the 25 billion Dollars (today is 51 billion 2010 US Senate Hearings) in Tax Incentives and programs provided by the Reagan Administration the US taxpayer subsidized the exportation of jobs and a new word was added to the American Language “outsourcing.” The Reagan Administration called war on the Unions and these taxpayer funded subsidies shipped during 12 year period about 2.5 million jobs.
A Game now: Cap and Slide!
Management soon learned something else too. Cap and Wage Slide. Understand your senior employees create a wage ceiling, the higher their wages the higher the other folks junior them can be, so their wages become caps glass ceilings for the other employees. If you get rid of key senior employees and replace them with lower paid junior employees the new junior employee’s lower wages creates a new lower ceiling or Wage Cap, This action in fact capping and wage sliding every one below that position. If we look at After Income Income growth Since the 1980’s to 2008 after tax wages of the lower 40% have risen a whole 4.5% while the top 1% has risen 215%. You could say they had a Win, Win situation here. They get a reason to get rid of older seasoned employees and they got rid of any potential problem to their authority and at the same time they gave themselves a big raise. Ship out Union jobs, have US taxpayers pay for it, and give you a big raise, how good can it get? So, the Outsourcing didn’t stop at Blue Collar Employees did it? Soon they had complete and undisputed authority of their companies. You know the greedy only create more needy.
Where is our Conscience when we need them the most?
By the 2000’s when no-one in Washington seemed to be looking or caring about the Conscience and expertise of Corporations were increasingly being pushed out or intimidated quiet; leading to one after another Company scandal like Enron and ultimately to the financial meltdown. Understand, the guy who speaks up is often working off a different set of priorities from management. These guys have had years of experience, been there during the good times and bad, and are working off of long-run priorities, while today’s top tier management are often working off of short-run make the buck or save the buck now priorities. Understand there is a trade-off, often you have to be long-run smart and short-run stupid (not make as much today, be honest instead lying) or short-run smart and long-run stupid (kill the golden goose and them what you want them to hear). Roger Boisjoly’s stand is a perfect case study of the dichotomy priority set. Roger Boisjoly was telling his management guys, we got lucky the last time, but we may not get lucky this time. It is just not worth it, let’s Q NASA in to the problem and postpone the launch to a warmer day. I know our contract is coming up, but we will have time to quietly fix the “O” ring flaw this summer and will end-up with a better design for NASA, which will give us a leg up. Our honesty to NASA is a virtue to our further dealings. The management is saying we can’t tell NASA of the problem, because we have to look good, because our contract is coming up and every-one is watching today. We can’t tell them! NASA’s management was thinking well the TV coverage is here today and won’t be here two days from now. What are we going to tell the President, he is expecting a TV spectacle with Sally Ride and we are getting cross communication from MT. I guess we’ll go with management. Well, the contrarian is 60% correct on the off, if he is an expert he is 80% of the time correct and if he is uppity he is 99% of the time correct came true that day in the Challenger disaster. The effect was a much televised black eye to the shuttle program instead of just another weather delay. The short-term effect was a two year re-launch delay, but the long term effect was the killing of the Shuttle Program without a viable replacement, because to the Reagan Administration NASA did the unforgivable sin of making the President look bad, so NASA never had the clout from that day forward to get the needed funds to create an improved simpler more reliable shuttle design and because of the complex design of the current Shuttle the day would come when the Shuttle would have to be moth balled, for safety concerns. Ultimately, we see micro-cozen of why today’s economic reality was just a matter of time, when short-run smart constantly wins out over long-run smart decision making. When expertise is not acted upon, but gotten rid of, we lose the necessary balance that is needed for sustained growth, and without them top management becomes single minded, narcissistic, egotistical, self centered, short sighted, corrupt and immoral.
Turning folks into Humpty Dumpties:
You all know the kid’s rhymth:
Humpty Dumpty Sat on a wall
Humpty Dumty Had a Great Fall
All the King’s Horses
And All the King’s Men
Couldn’t put Humpty Dumpty
Back together again?
Not too long ago I had a conversation with an oldish gentleman, 60ish still smart, a nice guy, go out his way to help, but half of his face was drooping from a small stroke. He had worked for Honeywell, he was a millwright by trade. He came to Honeywell after being laid off from Rockwell. When he started there none of the production machines was set-up right. One machine’s concrete pad was cracked and crumbling, because it was over striking the form. In less than a week, he had that machine working right; he went from one machine to the next in the following six months set-up every machine there. They received one of those new automated robots. The line would be down for 3 months as the robot got programmed. He looked over the instruction manual and said if you get an engineer over here I can set it up for you. In less than a week he had the robot up and running saving Honeywell over $50,000. Soon Honeywell said they wanted to expand their production, but not here – Mexico, he agreed he would go down and help out with the set-up. It was like being in jail. They had to go to once you got to the hotel, you all ate together and once you got done you all had to go to your room and lock the door. After 3 months the lines were almost up and he wanted out of the place.
Just a matter of time as I figured.
Soon after returning back to Kentucky he was laid off with the rest of the factory, after all they could manufacture the parts cheaper in Mexico. Well, now it seems Honeywell needs him back to reset the Kentucky factory back again. Seems a top manager was kidnapped while visiting. But he had gone through a lot, since he was laid off in 2008. He said I would love to, but I just can’t.
Here is an example of use and abuse, sorry that is how I see it, instead of protect and preserve. I am left wondering would the guy in be this condition if he hadn’t been laid off? Once you ruin and wreck they stay ruined and wrecked!
I literally just got done talking to a man who manufactures specialized automated manufacturing machines, because he needed a machine from me, only one manufacturer and only 20 units being made. His cliental is the Who’s Who of manufacturing; he tells me that he gets electrical engineers and mechanical engineers out of college. He can only hold on to them no more than 6 years, because the demand is so high for them, they can literally write their own checks after he has trained them. He confides in me it takes an electrical engineer 5 years to learn the trade and 6 years for a mechanical engineer to learn it. What about the 10,000 hour rule? 5 years? Translation, it takes 5 years of college education, than an additional 5 years of hands on training to reproduce today that 1, 100,000 hour man I first talked about. The proof of this is that we today have 2 million job openings in manufacturing that literally can’t be filled! Yes, can’t be filled! Why, well the answer was given to me recently. The very people who are needed to rebuild and retool manufacturing and business today are the first ones to be gotten rid of and not the last, which creates a huge Brain Drain and today at least a 5 year lag! Let me repeat at least a 5 year lag! Remember 5+5 = 10 years. Maybe one of the reasons why we have had ever longer joblessness is the ever shorter supply of key skilled tools makers to restart and maintain our manufacturing plants. Could the Brain Drain at the Top as today our fortune 500 first goes after the 100,000 hour worker, be a significant factor to joblessness? Maybe there is a related factor too?
The Board is killing the Golden Goose and everyone is good with this?
Some of you may still remember the announcement of a Labor Union’s giving into Airline’s demand who was acting like they were about to go under, after getting the Union to give into their concessions an month later the board announced that they were giving the CEO an million dollar bonus. How the CEO was able to do this was that real financial information on this company was kept from the Unions, institutional investors and from small investors. Today only the Board of Directors (Largest Investors), the CEO and the VP’s directly under him, who represent less than 1% of the Company, have any access to the Financial Information of the largest corporations, most require employees to do online anti-whistle blowing agreements as part of their continued employment, if they see corruption, they are only given an Independent Company? Paid by the Corporation? To go to, instead of the SEC or State Attorney’s office that would be truly independent and have force of Law to both protect the Whistle Blower and prosecute, none of which the Independent Company has. Knowledge is power, Bernie Madoff understood it, and the 1% understands it too. Pay the institutional investor just enough, so they are kept happy, don’t worry about the small investors they are disorganized, set your raise payment decision to before the annual report and act like you are poor until then to lower raise expectations, increasingly offer instead a bonus system, but raise the bar to lower the payment(the PEOPLE) if it is successful (give them smoke instead of money), so you can announce ever larger bonus packages for the Board of Directors, your VP’s directly under you and yourself, oh get rid of anyone who expresses concerns to keep things that way, because you can use the nondisclosure agreement against them.
For every action there is an equal and opposite re-action = Masses without Money:
Whether they actually intended this to happen or just didn’t realize the Natural Law of Action/Re-action the net effect has been an ever increasing level of poverty in this country. When FDR toke over the Nation’s Poverty level was over 25%, by 1968 the Poverty Level hit its lowest level at 12.8% mostly done by raising the minimum wage and protecting the 100,000 hour worker. We had the highest productivity rate increases and the longest period of Economic Stability of nearly 40 years. Today we are looking back at nearly 20% of our population living under poverty level. The percentage of working poor has increased every year, since 1974. Instead of doing a Matthew 20 minimum wage increases during Reagan’s Presidency he opted to use Negative Income Tax, so for over 12 years there was no Minimum wage increase, because was no minimum wage increase poor wages lagged behind, in 1992 the University of Minnesota did a study and found that the Negative Income Tax without any Minimum Wage increase ended up being a huge Corporate subsidy. See with the minimum wage being held so low even if workers receive wage increases they would never receive enough of a wage increase over their work life to ever get out of the poverty level. Thus the term working poor was created. Because they would never leave the poverty level the negative income tax was actually a subsidy to businesses like Walmart. The other reason was worker churn-over. After five years most corporate wage increases were set, so if a worker stayed with a company after 5 years the worker would lose to inflation. So a type of planned turn over by inflation attrition was adapted, by most fortune 500 companies. So employees would self fire. That is if you stayed at a position longer than 5 years, you have to face year after year of lower standards of living. The proof of this is in the savings rates of US citizen’s during from 1980 on. We went from a savings country to a debtor country, which reflects an ever greater need of the workforce to use their income to sustain them and thus savings would naturally go down. The fact is as 100,000 worker get of Caps and slides wages downward from the top and raise scales from the bottom set to lose to inflation more and more workers are caught in the game of monkey in the middle and you have a new class of workers who are just as poor as their lower paid counter parts, but they struggling not to show it leaving them open to the Predatory Practices of the 2000’s, and a class defined as Masses without Money. Understand, Amazon couldn’t start up in Africa, no masses with money. Only just recently could Walmart go into China. Why, masses starting to have money. To have Mass Markets you have to have first Masses with money to sell to. Everything is a cash flow; it takes sustained demand to produce sustained supply. Let me repeat, demand sustains supply! Without Masses with money Big Box Stores like Walmart, Kmart, Best Buy go out of business. I see Kmarts closing. I see Best Buys being ghost towns. Without Masses with money businesses based on the Walmart model go out of business unless they retain there first place to go to status. That requires highly skilled and knowledgeable sales force and customer centric communications system from the floor on out instead of the home base on in. The second thing making this recession longer is Masses without money and sporadic consumer consumption. Allowing the 100,000 worker to once again be paid what they are worth and following up with necessary wage increases will self correct the Masses without Money and Consumer demand will return.
Retail, the end of the Walmart Model:
Has anyone ever thought that always lower prices = always lower real wages? If all you need is some-one to stock shelves than you don’t need much skill there, but how about a HD TV or a Laptop Computer or order online something not carried in the store? The day of the unskilled worker in a consumer electronics driven retail market is soon coming to an end.
Two opposite forces:
Our labor market is driven by two opposite forces.
The first force is Chancellorism. Chancellor was a Princeton late 1900 Century Economist who believed that all labor could be broken down into basic steps or components and therefore you could teach any one even a monkey to do any job. You just needed to figure out the steps. Under Chancellor there is no need for a long period of training. We define this labor as unskilled.
The other labor force was discovered afterwards, that is the 10,000 hour rule. We learned it by looking at gifted and instant successes and found out there wasn’t anything to an instant success. To become very good at any job or task you need at least 10,000 hours of doing that task to gain the needed expertise to start being good at it: which went along with much of what trade (Union) labor’s who had used apprenticeships for years; one needed an extended period of hands on training before one became good at what one was doing. We define this labor as skilled.
Law of Likes Promoting Likes:
The Computer and the industrial robot were meant to lower the need for skilled labor, but the exact opposite is actually true today. As technology has become more prevalent, so has the need for ever more skilled workers to work with the machines increased? Seems that College Educated techs develop machines that need College educated folks to run them: just like in the 1940’s machines were being built by high school graduates and you soon needed a high school education to run them. The loss of 100,000 hour workforce has meant that you lost the folks who could span that education gap. But it also means that once was considered the domain of unskilled labor is now in reality in dire need of having skilled employees. Like Walmart!
So, businesses to this day can be defined by how they train and develop and keep labor to the 10,000 hour mark. Chancellor based businesses don’t train or try to keep their labor to the 10,000 hour mark except for management positions. While companies that recognize the 10,000 and 100,000 hour rules actively work to retain constantly train their workforce. In a Chancellor based business you are just another brick in the wall. In a 10/100 business you become a company treasure.
Another Company Model :
For the US to fully recover from this recession and restore the economic growth the American economy once enjoyed we need to rid our corporations of the Southern Land Owner Management Styled Model and replace that model with a more direct model. In my opinion the best model for this is a liberal model, yes liberal model. Thomas Edison was a professed anti-war liberal, but his Concentric Circle Model is one of the most streamline management models out. Thomas Edison wanted to be no less than 3 phone calls (degrees) away from any-one that work for him. Be it the guard at the gate or the new hire in one of his labs. When Blue Bloods would talk down about a group of folks, He would smile and say, “Well my company is run by a Black, an Irishmen, a Jew and a Scott and I’m the Scott.” But everyone of those men were every bit 100,000 hour plus guy. Did they stop him from making big mistakes, NO, but they all accepted long ago that mistakes were part of the R & D game. Just move on. Did they tell him you better believe it! Did he fire them for it, nope! He made them his right hand men. Thomas Edison favored balanced ideas over group think. When you are surrounded by men who have the long term good of the company in mind you run the company more smartly.
Replace Imbalance with Balance:
What I know to be true, people work, fight for, produce and consume, it takes people, it will always take people, It is people that are important. The Labor data shows that as the 100,000 hour employees go, so does the rest of labor go. We need to recognize and start to treat the 100K hour as National Treasures they are. Just like other US National Treasures we need to protect and preserve them and the institutions that protect their rights need to be strengthen not weakened. We need to Remove and Replace the Conservative Judges who taking away their rights. We need to remove and replace Conservative Legislation that has made them second class citizens. We need to put their long run views back into Corporations to put our Corporation decision making back into balance, because balanced growth is sustainable growth.
For more information about Roger Boisjoly check out these links: