Service, Creativity and Job Market

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creativity, customer service, job market, Rifkin, service, service technician, The Zero Marginal Cost Society

Recently I have witnessed again how our service (especially after-sales service or repair services) don’t work. In one case installing cooling capabilities to already existing heating system was beyond technician’s knowledge or possibilities. In another, broken circuit board costing in Radio Shack in range of 10 dollars was not possible to replace in one of the house-hold appliances, customer was advised to buy new device.

This happens now everywhere. Harvard Business Review had a cartoon depicting technical support technician giving the following advice to some customer calling him: “If it is broken, buy new one”. This is not a joke. It is reality.

I have already written about Apple practices of simply replacing its broken devices either free of charge when those are under warranty or for a fee if those are not. Old, broken devices are then what? Thrown away? Recycled? (whatever that means).

Why is that? I think that great part of explanation of this “throw away” phenomenon (or charging for parts and repair sums close to the value of a new appliance) is in the book I have read recently: “The Zero Marginal Cost Society” by J. Rifkin. In it Mr. Rifkin stipulates that cost of manufacturing nears zero. More and more of stuff we use is made by companies which have managed to (one of the principles of capitalism) drive their costs down as much as possible through cheaper labour, better processes, use of robotics, etc. Capitalism in itself (a paradox) drives costs of goods down. Workers – representing still the biggest chunk of the cost – are being laid off and replaced with automation wherever possible or cheaper workers. The truth is that those savings on the side of manufacture of goods is not being passed on to customers, especially in case of products with fashion or social status attached to them. The prices are left the same or are relatively higher. On the other end in developed countries technicians and other skilled workers are more and more expensive due to social and worker laws. It does not take a genius to see that it makes much more sense to force people to buy more instead of employing someone with enough knowledge to actually repair that thing.

Where in all this comes creativity? On one side creative service technician should be able to suggest ways to repair a device, even using parts offered by other vendors. That cannot be done by someone employed by single specific vendor, obviously. Those vendors limit such creativeness with their procedures – technicians have clear rules what can be done and what not. Mostly ensuing discussions end with “buy a new one”. Or other one. From us, of course. On the other hand, creativity may cause others to make products replacing those with obvious problems. Or someone may figure out how to make spare parts cheaper – that happens slowly already in 3D printing or in household or car industries. Much too slowly, if you ask me.

I think that you already figured out how all this influences job market. Since machines (or automation) replace people, goods are cheap to make, and no one wants to repair them, who needs people? Not everyone can be super-creative, intelligent, expensively educated… Group of people without hopes for any job grows and it will grow even more.

Do I have a solution? No. In competitive – not collaborative – society there is no such solution. You care only for yourself and your family. If you are lucky enough to have a job and belong to group of people with jobs which are still too expensive (or not possible) to be replaced by machines, then you are OK for a time. But if not, you have almost no chance of getting out. Unless you get together and create. Rifkin states in his book that many observe rise of collaborative commons – people pull together and work together to sustain their own group, but that requires cultural change from competition to collaboration on our side, from our own initiative. Interesting where this all will take us… Why? Think – if cost of goods (at least making them) will near zero and people are the biggest cost factor, then people will go. Who will then buy those goods and for what?

Another Job Market Myth

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Harvard Business Review, HBR, hiring process, job market, Kevin Ryan

In the January/February 2012 issue of Harvard Business Review Mr. Kevin Ryan, Gilt Groupe’s CEO, speaks about hiring process in the article “Building a Team of Players”. What I liked there is a list of rules of thumb in talent management: “…One is that the great people in any company are usually underpaid (…) Another is that A-level people generally hire other A-level people, B-level people hire C-level people (…) B players hire C players not because they feel threatened by more-talented people but because most people don’t want to work for mediocre boss”.

I agree to a point. The job market is far from being perfect and in many cases you are forced to work for someone who is mediocre, or in organisation or conditions you would not accept having a better choice. Job market, contrary to theory, is not free. You are being limited in your choices by your education, experience, location, marital status, gender, age, race or sexual preference. You are being pressurised to accept a job if you are unemployed, have kids, wife, mortgage or debt. Hiring processes have also a lot to improve, as most are based on outdated procedures or are downright covers for hiring people you know not people you need. Therefore yes, I would not work for a mediocre boss if I would have a choice. But I think I would, under pressure, choose paycheck over ambition. At least I could survive some months to be able to prove to some other picky CEO that I am in fact an A-rated player, waiting for my Top Team.

Vanishing Jobs? Not really…

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Charles Handy, crisis, education, job market, jobs, knowledge worker, market, specialisation

Twenty years ago Mr. Charles Handy wrote a book about change and in it he used some of the data published some years before his book came out. One of this data listed statistics about education of young people in 1988. In that OECD stats Great Britain placed 16th in the “…league table of young people in education after 16 years of age – above only Portugal and Spain.” (C. Handy, “The Age of Unreason” p. 29, Arrow Books, 1991). Now fast forward to today and see where the Britain, Spain and Portugal are economically. I wonder how Greece fared in those same statistics.

In one of my previous posts I said that jobs are out there, we just have to find them, as they are different to those we are (or were) used to. In the age of knowledge worker of Mr. Drucker, people need to have proper knowledge in order to participate in the job market. They need to be educated in right disciplines plus they must have human properties making them suitable for service jobs. If you will greatly simplify, you can cut the job market into those major categories: scientists and their helpers (those are people coming up with things); producers (including farmers and all workers producing things for us such as candy, bread, cars and airplanes); administration (all governmental jobs including Mr. President) and service sector. All of those have changed not only in their relative size – more percentage of people work in service then in all of them combined now – but also in demand all those jobs place on our intelligence, skills and training. That is why people who have chosen wrong subject of their studies years ago are now without work. In other words, you may be a master in coal excavation, but no one will employ you. Or you may be a bachelor in software development and you will get only a medium wage boring job, because there is a lot people like you out there.

It also so happens that jobs which are available demand high specialisation and great level of education, which (without offending anyone’s intelligence) not many of us can achieve. That is why there are a lot of educated people without work, and there is work available without people qualified enough to take it. That is one side of it. The other is that some of the people in positions of power given to them by their skills, jobs and ability, can abuse that power for their own gains. They can come up with schemes lesser people will not understand well enough to be able to stop them. Look at the crisis from few years ago and complicated financial instruments which were devised and abused by few, but not understood by many.

The third consequence is that whenever a financial crisis happens, we are so affected by it – service jobs are the first to get hurt, as people normally spending their income to get the service spend less because of the crisis. That starts a deadly spiral, and we all get hurt a lot more than it was the case when majority of the jobs were in manufacturing.

All I wrote above is not new. Ideas are coming from the book written 20 years ago, but as usual, no one listened. We know why things happen, but no one told us what to do about it. I don’t believe any great writer or thinker can change the way things are right now, no matter how right and revolutionary his ideas are going to be. For me, a non-economist, non-specialist person, obvious thing to do is that we need to keep the demand for services high. Secondly, we need to make sure that service providers are quick enough in adaptation, as services demanded today may be not needed tomorrow because of many reasons. Therefore education should go towards teaching not one, but a few skills including quick adaptation. Having enough of those skills could give us a cushion to fall onto in case of problems in our main area of specialisation. In other words, we would need to replace the age of specialisation with age of multi-specialisation. I have no idea if that would solve our problems, but here I count on scientists and their helpers – at least those ones with proper set of values.