Harvard Business Review Survey: Only 31% Of Execs In The US And Europe Plan New Hires Next Year

Hope 'n Change, ya'll, Hope 'n Change...

To get a better glimpse into where these decision makers stand at this perilous moment in history, we launched the Harvard Business Review Economic Survey earlier this month and contacted 1389 executives — the majority director level and above — from the U.S., UK/Europe, and Asia. We focused on three areas of questioning: Their confidence in the global economy this year and in the next decade, whether or not they were confident their companies would hit their revenue targets this year and next, and whether they anticipated increasing their hiring in the next fiscal year.

The news — particularly around hiring — is not good: Only 31% of respondents in the US and UK/Europe said they planned to increase their hiring efforts next fiscal year. The news out of Asia was slightly better, with 41% planning to increase hiring. This general trepidation most likely can be explained by respondents' fears of an impending second global economic recession: 70% believe another global economic recession is either somewhat or very likely in the coming months. Also telling is the respondents' estimates of their own companies' performance, with only mixed confidence in their near-term organizational performance.

It's not just folks like OS on small-town main street that says we're headed in the wrong direction at about 100 mph. The GreatAndGood at places like NBC, NYT, CNN, and the White House call us ig'nrant rednecks when we suggest things aren't going well and a change is needed. What names to they plan to call these 1389 respondents?

Actually, they won't call them any names at all. They'll simply ignore the fact that the survey was taken or published, even by HBR.

That'll make everything ok. No worries. Just keep on watching 'Dancing With The Stars'...we've got this all under control.

The Lessons Of Pixar

This from the HBR blogs, always a wealth of insight.

Quote of the day from this article:

"Success hides problems."

Of course. How obvious. Why don't more of us see those obvious things in front of us?

OS's first job out of college was with a successful small business, family owned, recently moved into a lovely building custom-built for them. Creative on top floor one side, admin top floor the other, production on the ground floor, and warehouse round back. It was cool to be there, and success was in the air.

Now the building stands empty. The company was bought for pennies just before bankruptcy.

A member of the family told OS the crucial anecdote:

On the day we dedicated that building, our CPA quietly told us that this building is not a monument to what we have achieved, but to what we would have to achieve going forward.

They were so happy about being successful, they never saw or dealt with the problems.

The next time OS had dealings with them, some ten years later, they were in total chaos, in the death spiral, never to recover.

Success hides problems.

OS Is A Fan Of Michael Schrage: Two Recent Essays To Consider

So much economic writing makes the readers' eyes glaze over, as so many writers labor to appear even-handed and fair. Rather like the hamsters on the Kia ad: 'You could give this, or you could give her that!.' Ennui soon sets in.

Michael Schrage, in his musings on the Harvard Biz Review site, does not fall for that stuff. He actually has a point of view, and seeks to make sense, instead of impressing the reader with his erudition and ability to fabricate charts. OS, simple mind that he is, appreciates that approach.

So, two recent posts to share, and hopefully this will encourage the vast and swelling hordes of OS's loyal posse to read more Michael Schrage.

First: Higher Education Is Overrated; Skills Aren't

Thanks, Mr. Schrage, for stating the obvious, pithily.

We have a huge branding issue. Pundits and policy-makers jabber about the need to educate people to compete in knowledge-intensive industries. But knowledge doesn't represent even half the intensity of this industrial challenge. What really matters are skills. The grievously undervalued human capital issue here isn't quality education in school but quality of skills in markets. Establishing correlations, let alone causality, between them is hard. (Michael Polanyi's classic "Personal Knowledge" brilliantly articulates this.) A computer science PhD doesn't make one a good programmer. There is a world of difference between getting an "A" in robotics class and winning a "bot" competition. MIT's motto isn't Mens et Manus (Latin for Mind and Hand) by accident. Great knowledge is not the same as great skill. Worse yet, decent knowledge doesn't guarantee even decent skills. Unfortunately, educrats and eduzealots behave as if college English degrees mean their recipients can write and that philosophy degrees mean their holders can rigorously think. That's not true.

Second: The Hireless Recovery

Pick any recovery-shaped letter you like. Economic policymakers would still be wondering: Where did the jobs go?

Alas, that's exactly the wrong question. The better question: Where did the employers go?

America doesn't have a jobless recovery; it has a hireless recovery. Don't confuse them. After all, you first have to get hired to have a job. Organizations may be desperate to grow, but they overwhelmingly lack the desire to hire. Fewer people are working longer, harder and (presumably) smarter hours. So many firms have proven so productive even after several rounds of layoffs, that serious economists wonder if, in fact, large slices of the workforce actually offer ZMP — Zero Marginal Productivity — to their enterprise. In other words, the Great Recession reveals many employees not just to be worth less but economically worthless. Ouch.

[he continues....]

For most organizations, people are a means and medium to an end. They're not hiring employees, they're hiring value creation. If they can get that value — or most of it — from contingency workers, outsourcing, automation, innovative processes or capital investment, why wouldn't they? If tweaking a process or program empowers three people to do the work of five, then tweakonomics is the way to go. The profound difference between today and 2005 is that good hires looked like better investments than great tweaks back then. In 2010, good tweaks look like better bets than even great hires.

He tells us stuff we don't gladly hear. But, it's stuff we need to hear.

HT Mr. Schrage.