Saturday, September 24, 2011

It's Not About Jobs- It's About Dreams, Businesses & Careers

As someone who left corporate life in 1996 to adapt what I'd learned concerning corporate strategy and performance into quantitative consulting products and an equity management process, I'm familiar with the concept of building a business.

Thus it strikes me as foolish and naive to hear federal politicians of both parties ceaselessly natter on about "jobs," as if that's all people want. Some sort of economic unit of income delivery.

That's not what people want.

The people who inadvertently create jobs want to monetize their dreams. They have what they believe to be either unique, or uniquely competitive business concepts, the successful implementation of which they believe will bring them fulfillment, satisfaction and wealth.

Some of those people who start businesses, as they in fact succeed, may create employment for others. It's likely been this way for homo sapiens since we hunted mastodons while living in caves hundreds of thousands of years, and longer, ago. There were, in each group, probably one or two superior hunters with whom others hoped to join, in order to get a share of the food he would lead them to and kill. Perhaps a loose confederation of a superior tracker and the best spear-thrower of the group.

Call them chiefs, kings, what have you, human social groups have probably always had, in the hunter-gatherer era before settled communities, rainmakers. Those who organized and led the efforts to secure food.

Today, we buy food, water, shelter and clothing. Those basics about which I learned in a simple 7th grade economics unit taught in Social Studies by, I believe, the current secretary of Transportation, Ray LaHood. So rather than join other humans in hunting game or gathering edible plants, we hope to earn sufficient income to buy those goods and services which we once procured directly by our own efforts.

Most people want more than a job. A job suggests a temporal source of money which necessarily results in reduced spending and a large sense of uncertainty about which of your life's aspirations will be attainable. Even those who labor at manual tasks ideally seek situations which make their own sense of economic and financial vulnerability to forces outside their control somewhat less.

I think what those who don't create businesses want is to be useful and valuable to, employed by someone with a passion for building their successful business. So that they can look forward to some security in their ability to rely on the income they earn in that business.

They want careers, not jobs. But both business creators and their employees ultimately desire, though it's hard to attain, long term involvement in a business which brings them income security based on the continued success of their efforts in creating value in the enterprise.

If you've ever worked for a large company, as I have- AT&T, Chase Manhattan Bank and Andersen Consulting (now Accenture), you know that, in the post-1970s era of downsizing and LBOs, you were only as secure as your connection to your upper management, if then. More likely, as happened to me at all three companies, large-scale reorganizations could affect your job, and, thus, your career,

In the era of my late father's corporate career, working for a large firm typically meant security, as things moved slowly. Not so in the era that followed. The era for those of us in the middle and late boomer cohort.

My experience after corporate life, in a smaller consultancy (Oliver Wyman & Co.), working as a consultant to a wealthy would-be hedge fund operator, and in association with various hedge fund and private investment partnerships, provided the expected trade-offs of anonymity with direct risks of interpersonal quirks and individual unreliability. A most personal form of counterparty risk, if you will.

Working in small organizations, with or for entrepreneurs, affords no less risk than working in a large firm- simply a different sort. You know the person who will dismiss you for purely personal reasons, or in a direct contravention of agreements. Your partner loses his financial backer, whimsically decides to pursue other businesses and exit the effort on which he's asked you to work, or simply comes up missing with promised capital, as my last partner did. Or, as in the case of the last consulting firm for which I worked, decides your success on agreed-upon objectives are now too expensive, and reneges on original employment terms.

My point is, earning income is never as simple as just having a "job" for anyone with a college degree and hopes of more than mindless manual labor. Every employment or business creation effort involves risks. You hope you wisely manage those risks, but they never just vanish.

To fix a nation's hopes on public spending to employ road and building construction workers misses the point of returning our nation to a situation in which educated people can imagine, construct and manage their careers.

The sort of personal income streams creation that will return America to the type of society it had in recent decades will only be achieved by the ability of those who want to create businesses to do so, and perhaps employ others in their impassioned drive to build those enterprises.

Those will be careers, not just jobs seen by politicians as temporary or unenumerated income production units.

The involvement of humans in US society to earn income transcends simply putting in a day's work for a current paycheck. And, thus, transcends seeing such effort as just a job.

That is why temporary measures, including more federal borrowing to build roads and schools (a/k/a Stimulus II) and/or suspension of payroll taxes, won't deliver what people want. Those measure might create temporary jobs, but they won't provide opportunities for the business creation and expansion which provides careers.

To do that, government needs to lower taxes, reduce cumbersome regulation, and provide a more certain, reliable climate in which more businesses may be formed, and existing ones expanded. That comes from real demand from the private sector for what those businesses provide, not the faux-demand of temporary government fiscal policies.

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