Looking for Work in Hard Times

In case you haven't noticed, we live in interesting times. And about the only way you wouldn't have noticed is if you were in a coma, in an underground bunker for the past several years, or you are a very uninformed individual. Today, we have high unemployment (and going higher), a ravaged economy (no thanks to our titans of industry), and civil unrest throughout the globe. With this background, many Boomer's are faced with an early termination of their careers (highest-paid front line personnel are the first to go), or they find themselves in early retirement with less spendable income than they thought. Whatever the initiating issue, a lot of people find themselves looking for work.
Given that one must look for work, the choices are:

• Perform an extensive job search and look for traditional work. If you find it, you work in a cubicle, and have a management structure populated with people that have contributed in large part to the problems we have today. Since you will be the first hired, an older employee, and probably higher paid than your peers (but still lower than your previous job), you will be the first to go when hard times hit.

• Perform an extensive job search and look for non-traditional work. These jobs are harder to find and are harder to fill. However, they provide an opportunity for the job-seeker to expand their skills and expose them to new opportunities. Pay can be comparable to the traditional job. It can also be a little less. However, benefits of the start-up or non-traditional business can range from numerous perks (free lunches, beer Fridays, casual dress) to non-traditional perks (in-house exercise, concierge services, and similar benefits).

• Become an independent contractor. Using services such as Elance, anyone with a skill that is in demand in the marketplace can become an independent contractor. Though the individual is responsible for the all benefits, it provides the opportunity for the individual to work in a wide variety of environments, with a wide variety of businesses, and generally expands the worker's business experience. Pay can range from subsistence to quite lucrative, depending on the skills, the work, and the deadline.

• Start your own business. This can range from a business on a shoestring to a fully-funded corporate enterprise. The two things necessary are you must have an idea that can be translated into an executable business strategy, and you must have a business idea that will have demand in the market. If you have the skills, some areas are always in demand: plumbers, electricians, woodworkers, and similar skillsets. I addition, if you are a technology professional with Java, Perl, PHP, or other Web programming skills, it is usually easy to find at least temporary work applying these skills.

Even in a down economy, there is demand for skilled individuals. The problem is finding the work, matching your skills to the opportunity, and selling yourself. Future articles will explore these job-search aspects in more detail.

If you have suggestions, additional insights, or other comments, we'd love to hear them.

Pop-Up Businesses

In the February 25th issue of Businessweek, futurist David Zach discusses his prediction of an emerging trend toward "pop-up businesses" in the next 10 years. Pop-up businesses are defined as dynamic groups of people with specific talents who are dedicated to achieving a goal and then disbanding. Think of it as a temporary company. Think of it as a business that uses a temporary staffing agency to fill personnel needs, but where the entire company is temporary. Finally, think of it as an entire company built around a project--a project with a beginning, a deliverable product or service, and an end.

The pop-up business is interesting in that it has the advantage to tap into the vast underutilized resources of retiring baby boomers, other aged and retired executives, skilled personnel now swelling the unemployment lines, and various people--from moms to high school and college students--who just need a little extra income. Yet, it does not have the pressure of most traditional businesses--staying in business. This is a sea-change in the way business trade takes place. The advantages are many:

• Low overhead; simply rent space or office virtually from where ever the employee resides.
• Easy business forecasting; leaders know what they need, how long they need it, and the cost.
• No "bench" expense; a problem with many traditional companies is the need to keep people on the payroll in anticipation of new business. Not so the pop-up company; they only hire what they immediately need.

Of course, there are many disadvantages or a least undefined issues to be addressed:

• Who guarantees product/service? If the company is no longer in existence, who will stand behind the product? This may give rise to yet another emerging business--product guarantors.
• How do they build a business reputation? If you are not in business over the long-term, issues of brand, reputation, and market ownership have no meaning. Who will hire the pop-up business? What will the criteria be for engaging is they are always new? It is in this area that the emerging social networks will play a role. The pop-up business will become organized and institutionalized crowdsourcing and the brand and reputation will reside with the individuals in the pop-up business.
• How will the be engaged? Looking in the yellow pages or on the Internet for a company with given products, services, or attributes will not be possible--the pop-up business does not exist until needed. Therefore, new ways of contracting will be needed. A starting model may be Web sites such as http://elance.com. The pop-up business becomes a social network phenomena where markets are created to bring together business needs with individuals who can meet the need. The difference from Elance will be the emergence of the "general contractor" or leader of the pop-up business who manages the hiring, scheduling, financing, and delivery of product or service.
  

The possibilities boggle the mind. Read more about the original discussion at:

http://images.businessweek.com/ss/09/02/0225_inventions/16.htm

What do you think? We would love to hear your opinion.

House Approves COBRA Premium Subsidy for Jobless Workers

With the number of unemployed Boomers rising each day, I thought some of you may find the following article encouraging. Titled, "House Approves COBRA Premium Subsidy for Jobless Workers," if actually signed into law, it could provide subsidized COBRA benefits for workers who are 55 and older until they turn 65! With health insurance one of the major concerns for jobless workers in the market today, this may be a great benefit. The link to the article is here:

http://tinyurl.com/aohodc

After reading the article, if you think it could benefit you, I would highly recommend you contact both your Congressional representative and your Senators. Millions of voices have a way of making them listen.

Let me know what you think.

The end of an era

I joined EDS in 1973 when the company was a little over 11 years old. There were 3,000 employees, the company had revenues of $110 Million. I was there and helped the company achieve $250 Million, $500 Million, $1 Billion, $10 Billion, and $20 Billion. I was there when the employee count went to 5,000, then 10,000, then 50,000, then 100,000, and eventually 160,000. I was there when the company first went international. I was there when Ross Perot sold the company to GM (itself now struggling for survival) yet managed to keep EDS as an unconsolidated subsidiary with it's own tracking stock (the first time such a class of stock had ever been offered on the New York Stock Exchange). I was there when Ross left the company assuming the title of "Founder." When he left, he was still earning the same salary as when I joined, $60,000 per year. He always cast his lot with the company's fortune, basing his wealth on his stock in the company. He was bought out for $700 Million.

Subsequent to Perot's departure, the company had a succession of leaders. Les Alberthal initially continued to grow the company and eventually led the company back to an independent corporation. He also made an effort to erase the "cult of personality" that he viewed as Perot's influence. But it soon became obvious that Alberthal (and the rest of the second tier leaders) was no match for Perot's business approach and influence. The company soon stalled in it's growth and Alberthal was replaced after receiving $36 Million for his accomplishment.

Dick Brown, a telephone guy, replaced Alberthal and pretty much the senior leadership in EDS. he also couldn't match Perot. In fact, he couldn't match Alberthal--in a mere two years, Brown and his team brought EDS to the brink of bankruptcy.

Brown was replaced by Michael Jordan, a turn-around specialist who once again brought (and bought) his own cadre of secondary leaders. By basically selling off assets, cutting out (or drastically reducing) investment in future technology, and embarking on a series of labor cuts and early retirements, EDS was "saved" into profitability. Jordan left the company in better financial shape than when he joined, but the company was well on it's way to becoming a tier 2 player.

When Ron Rittenmeyer became chairman, it was only a matter of time before the company was acquired. EDS was fast becoming a niche player, unable to effectively compete against those larger companies that both manufactured hardware and sold services.

The end came rapidly: In August 2008, EDS was acquired by HP, becoming a business unit called "EDS, an HP Company." That was only a transition phase. In October, HP announced a massive reduction in force at EDS of around 26,000 people over three years. However, with the beginning of December, it was obvious that reduction was going to be accelerated. HP did not want to have the lingering problems it experienced after acquiring Compaq Computer (and to a lesser extent, DEC). Added to that was a souring economy and the need for action became more critical. Therefore, in the first week of December, the layoffs accelerated, it was announced that Rittenmeyer would retire at the end of the year, and EDS would be absorbed into HP's Technical Services Group. So long EDS. As W. Edwards Deming once said, "Survival is not mandatory."

From the beginning, I owned EDS stock and continued to own the GME tracking stock even when I left EDS for a few years in the 1990s. And I owned EDS stock when HP cashed it out during the acquisition. I did well (not as well as Rittenmeyer's three-year tenure and buy-out, but I can sleep at night). I hope HP prospers as I continue to own their stock. But I will miss EDS. I was a part of something probably most people never have a chance to experience and those there now will never experience.

I have been retired from EDS for more than a year. It was a great ride and I wouldn't trade it for anything. Alas EDS, I knew it well. It is truly the end of an era.

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EDS One Year Retired

This Sunday, November 30th will mark the first anniversary of my retirement from EDS. In that time, the economy has tanked, we have elected a new president, the wars in Iraq and Afghanistan continue, and not to be forgotten, EDS has ceased to exist as an independent company.

EDS' fate was better than other corporations such as Bear Sterns or Lehman Brothers--at least it still exists as a division of HP. Similar to Citi, HP has announced massive layoffs at EDS, but those layoffs are smaller in absolute number and spread over a longer period of time. Timing is everything--who knows what would have happened to EDS if the acquisition was delayed by three months.

It is interesting to look at EDS from the outside, having shed some of the biased lenses that come with a job inside the company. While remaining a stockholder in HP, having no stock interest in EDS as an independent company also helps shed some bias.

Something is going to happen soon, based on activity by EDSers on LinkedIn. I have never seen the level of activity by all levels of the organization on LinkedIn representing either worry about their jobs, or dissatisfaction with their jobs. Employees are joining, making links, or expanding links, and joining groups at a rate I haven't seen in years. Whether employees think something is happening or something is really happening, it's hard to say.

With that said, EDS seems to have done well in the last year. It has significant challenges over the next 18-24 months, as do other companies in the IT marketspace. I believe that HP's CEO has the intelligence, perspective, and will to fully integrate EDS as a successful adjunct to HP's hardware offerings. However, it will be an interesting few quarters to see what happens. The transition will be complete when EDS' CEO leaves. My guess is that will occur in the next year.

Your thoughts?

[Posted with iBlogger from my iPhone]

Boomer Losers

Yesterday, CEOs of the big three automobile makers in the US made their pitch to Congress for an ADDITIONAL $25 billion bailout for their industry. Having already been authorized a $25 billion line of credit to "innovate" alternative energy cars, they are now asking the American taxpayer for an additional $25 billion that will buy them at most 6 additional months of cashflow. For example, GM stated that they are burning through $5 billion a month. They stand to get around $12 billion of a $25 billion handout. Therefore, a bailout would give GM anlittle less than 3 months additional time. Should Congress grant their wish? Congress is reluctant to do so.

These three CEOs demonstrated the dire straits of their respective organizations by the example of their behavior and that is why this bailout is a bad idea. First, while they will be forgoing their hefty bonuses, their salaries remain astronomical when compared to their well-payed rank-and-file. For example, the CEO of Ford makes some $28 million a year and he has taken that company to the brink of bankruptcy. Second, demonstrating that cost-cutting and sacrifice start at the top, all three CEOs flew to Washington on private corporate jets.

I agree that failure of the big three auto makers will be catastropic to the economy. Yet, it is investors who put a CEO in charge of Chrysler who, in his previous job, almost destroyed Home Depot while walking away with a $210 million golden parachute. It is the people talking to Congress that are the problem. It is the boards of these organizations who appoint and overpay these CEOs that are the problem. It is the investors who do not hold their boards accountable for gross mismanagement that are the problem.

Unfortunately, giving the people who are the problem more money is not the solution. There is a much better chance that real change will occur through a court-supervised bankruptcy than through legislated bailouts.

Investors wanted short-term profits at the cost of long-term survivability. Well, you got it and now you and the employees and suppliers and communities where these companies are located are all going to pay the price. As Dr. W. Edwards Deming once stated, "Survival is not mandatory."

Don't provide the bailout. Put that $25 billion toward paying the pensions of retirees who were guaranteed a pension when they worked at these companies. Congress let the companies underfund the pensions. Now Congress needs to make their mistake right, not dig a deeper hole. The Boomers are screwed either way.

[Posted with iBlogger from my iPhone]

Beware: Your Pension May Be In Trouble

I happened to see an AP news item that some 300 large corporations were sending a letter to Congress asking that certain portions of the Pension Protection Act of 2006 be delayed. These stipulations required that companies fully fund their pensions. However, with investments in funds plummeting on the stock market, many companies now find their pensions once again severely underfunded. Companies want more time to fully fund the pension plan.

However, these pension plans would not be underfunded had the companies invested in the pension instead of pointing that money into other business operations (or worse into obscene executive compensation). That is, the company management made a good short-term decision at the cost of a bad long-term decision. Now they want a no strings bye on the funding requirement. It amounts to another bailout, this time funded by your retirement pension, and enabled by your representatives in Congress.

Like the other bailouts passed by Congress or being considered, big business is basically extorting money from their employees. If they don't get relief on pension finding, they may have to lay-off employees or, in the worst case, declare bankruptcy. If the latter, the pension plan would be one of the first things to go meaning retirees would lose their pension. Even if the pension plan were to be taken over by the Pension Benefit Guarantee Corporation, the retiree would receive only pennies on the dollar of the benefit promised to them by the company. This also assumes that the Pension Benefit Guarantee Corporation does not go bankrupt--they are already out of money. The result would be a required bailout of the PBGC. Your taxpayer dollar at work.

I think there should be a cost for getting the full-funding delay--a shared sacrifice. First, executive pensions are typically in a separate plan from the rank-and-file employee. If management wants pension relief, they should be required to fold their pension plans into the employee plan. Their pension should also be at risk.

Second, any executive bonuses and raises should be eliminated until the pension is fully funded.

Third, sacrifice should start at the top. Therefore, corporate management should take an across-the-board pay cut of 40% until the pension is fully funded. This sacrifice could perhaps be higher, but 40% feels like a good painful number.

Fourth, golden parachute clauses in executive contracts should be recinded. Executives should get the same separation package as any other employee. If the executives don't like it, they are free to leave the company.

Fifth, executive perks should be eliminated. These perks are nothing more than compensation and should be the first to go in tight economic times. Indeed, this should have been done BEFORE asking for relief.

Sixth, in exchange for pension relief, the companies must stop all lobbying activities. That money should be directed at funding the pension plan.

Seventh, bankruptcy laws should be amended to require that a percentage of executive compensation, all bonuses, all golden parachutes, and all perks be directed to fully funding the pension plan. The pension plan should be the first debtor.

While these actions may seem drastic (especially to executives and management), there should be no free lunch. If relief is needed, there should be a high cost. The alternative is fund the pension plan.

I also think many of these actions should be stipulations for a Congressional bailout.

What are your thoughts? Agree? Disagree? Other suggested alternatives? Let me hear from you. Start a dialog with you Congressional representative to let them know how you feel.

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