Time for management to manage

Our industry is in turmoil. Market turbulence is at an unprecedented level. This market chaos is adversely affecting the careers and work status of many people; people we know. “I do not know where I will be working in 2014, if at all”, is a commonly heard refrain these days.

Companies want numbers, numbers and more numbers, now. Mergers and acquisitions are a relatively easy method for companies to put “lipstick on the spreadsheet”, a panacea for instant growth. As someone said years ago, “Those who cannot strategize, acquire.” Unfortunately, M&A activity often masks the sins of management.

Strategic thinking, innovation, employee skills development, internal research and development, developing sustainable competitive advantages and old fashion value creation through higher quality service are occasionally discussed but seldom performed. Many companies say that they are waiting for sequestration to be resolved, budget stability, a Congress that works together, or more market clarity.

I say, “Wrong!”

While we wait for more clarity in the market’s direction, technology is changing, competition is getting tougher, institutional knowledge is walking out the door, at the government and industry, and business risk is increasing.

Waiting for wisdom is not a strategic position in the midst of evolving market forces.

Examples of non-stop market and industry forces are:

• Companies can perform more work today with fewer employees than in the past.
• The value of the productivity gains created by having less employees accrues to the owners of the business and not the long-term, well-being of the firm.
• Many firms have high levels of cash that used to be reinvested into increasing the firm’s long-term competiveness.
• Companies that used to perform regular employee skills training, for the company’s needs, are hoping government will pay for this training.
• The gray ceiling has replaced the glass ceiling, which adversely affects employees’ opportunity for promotions or job mobility.
• Technology infusion, across our society, replaces workers at a rate of 1-2 percent per year; more in some industries.
• As robotics had a dramatic impact on blue-collar workers’ employment the past 30 years, so will artificial intelligence applications impact white-collar workers.
• Globalization will continue to offer companies the appearance of less expensive labor alternatives.

These and other market forces are hammering employees, the backbone of every company.

Traditionally, management served as a buffer between the firm’s external environment, i.e. the market chaos and the employee’s day-to-day activity.

No more. Today, employees are aware of external market forces with or without management’s interpretation. Management owes its employees a candid discussion concerning its view of the market, our industry, the firm’s direction and how it will remain competitive especially given decreasing internal investments.

It is time for management to manage.