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Are U.S. managers doomed to be water boys?

Once regarded as the best educated and most effective, American managers may be on an irreversible path downward. In this blog, John M McKee cites evidence of a downward cycle and then offers advice to those who wish to succeed in a changing world.

In a column in the June 30 issue of Forbes Magazine, auto industry guru Jerry Flint observed that the US auto industry is so shaky that a total collapse is now a very real possibility.

He noted parallels to the British auto industry, where once-profitable companies went down or were acquired by overseas organizations. The result, he said, was that although cars are still being assembled in Britain, all the good paying jobs and important management roles go to those from other countries. Only the low-paying work is given to the "locals."

The Brits, he said, have been relegated to the role of water boys. And the same is likely here. His concerns seem to be reinforced by a July 1 report on combined auto sales in CNN/Money. That report indicated June was perhaps the worst sales month since tracking began years ago.

What's more, General Motors, once the world's biggest producer of cars with over a dozen car brands, is now valued at about $6B while Honda, with only two brands, is now worth over $11B.

As someone who's been around nearly as long as Mr. Flint, I fully understand his concern. I have watched while many industries and head offices left for other cities, then to other states (or provinces in Canada) in the quest for greater efficiency. Consequently, communities that were once vibrant became shadows of themselves. Unemployment usually rose. Although most folks hate to see others hurt like this, such change was generally regarded as a cost of competition. In many cases, these "local" changes didn't affect people elsewhere in the US either.

(About unemployment: There is a commonly held belief among social scientists that says, "Unemployment numbers are irrelevant - you're either 100% employed or 100% unemployed. If you're still employed, you feel no pain and so are unlikely to change much of what you are doing.")

But now, more than ever, US citizens are starting to feel the pain nationwide - across all incomes and professions:

- the US economy has 3.2m fewer jobs today than when George W. Bush became

President.

- in the last 3 years, nearly 1 in 5 workers has been laid off.

- 15 million people are unemployed, underemployed, or have given up looking for work.

The outlook is tough. The rise of middle class roles and the personal aspirations of those in India, China, South America and East Europe will continue to make it harder for the U.S. to compete. Can anything be done to stop this quickly developing trend, or is this just the beginning of a time when many managers get dehired permanently?

Stopping this trend requires that U.S. managers - and this applies to those in other western countries as well - wake up and smell the coffee. They need to realize and accept that what is occurring is not temporary activity that will cease on its own. And then managers must take the action needed to ensure that they - and their organizations - are around for the long haul. As the speed of change increases, so too does the need for great management clarity and leadership skills.

Here's what you need to do:

1. Upgrade yourself - no one wants to pay for someone who can't do what's needed today and tomorrow. Make sure "the kids" know this too.

2. Become more involved - learn how your industry is being affected by global events.

3. Recognize that even the strongest trends can be changed by committed individuals.

4. Perform at the top of your game - no one will continue to pay more for less than is available elsewhere.

5. Make a plan - if you don't have a personal action plan, how do you know if you're doing everything possible to ensure you have a better life?

6. Get angry - whiners don't survive, they just make it more aggravating for the winners.

7. Don't look to the government to fix it - competition is a global game now. It can't be stopped because we decide we want to take our football and go home. We'll just be on the sidelines watching the action.

8. Watch for new opportunities - don't wait for someone else (like your boss) to look after you. Use some of the great entrepreneurial stuff that makes capitalism great and get into a new line.

Or, order Adam Sandler's movie The Waterboy and sit back and wait.

john

Leadership Coach

About

John M. McKee is the founder and CEO of BusinessSuccessCoach.net, an international consulting and coaching practice with subscribers in 43 countries. One of the founding senior executives of DIRECTV, his hands-on experience includes leading billion d...

17 comments
dcolbert
dcolbert

I don't think we can win. We're competing against people with quality British education in an economy where they can work as effectively as us for a third of the price and attain a lifestyle equal to or better than ours, one that was virtually unacheivable in their nation just a couple of decades before. How do we compete with that? We never figured it out as we lost dominance in the automotive trade. Ultimately, those nations that are currently benefiting from this globalization face rampant inflationary cycles and diminishing returns, and then they start to see some other well positioned nation leverage their ability to execute (Indian to China and Russia). Their local economy makes a significant and painful economic adjustment, and the cycle repeats, while CEOs, Boardmembers, and major stockholders get rich on cheap expenses and gross profits. Are these 10 steps going to make a difference? Or do we just have to accept that as the global standard of living increases, we're going to have to tighten our belts and give up on the "excess" that we've become adjusted to? Sounds nice and warm and fuzzy in theory, until YOUR position is right-sized and you're facing foreclosure on YOUR mortgage.

wynnsb
wynnsb

As mentioned in another article on TR today, backoffice services are moving overseas. Move your customer facing functions and suffer the consequences. I have seen a change in management over the past 10 years. Today's managers are dual-hatted. Where once a manager was 'just' a manager, today's managers are more hands-on in day-to-day operations. Check your facts. According to the Bureau of Labor Stats, there were 136,181,000 folks employed in Jan 01. There were 146,649,000 as of June 08. That is a 10.4+M increase - not a 3.5M decrease.

roaming
roaming

Statistics can be massaged. Look at the CPI statistic, is anybody still na?ve enough believe it?

Oz_Media
Oz_Media

As recognized by most companies around the globe, American corporations have a lot of completely useless managament positions. Most people have seen the effects when a US company is bought out and most of the management is let go. This is because other companies don' thave all the middle management and lower management positions. I once worked for a Canadian company that was bought by a Us company, then bought by a global company based in HongKong. the Canadian company had a few top level managers and that was it, when the US bought us out, there was a great deal of management promotions. Once the Hong Kong company bought it from the US, all those redundant management positions were nixed and people were put back to work with the others they had formerly managed. I think it's just a case of too many cooks in teh kitchen and US companies over manage their workforce in order to offer promotions to people, the US business mindset had always been overly focused on fortune and prosperity, even when a company is going to sink from it. They will promote you to management, find SOMETHING for you to manage so that they can boast great results to investors. I think it's just a sign of the times, American corporations, like others worldwide, will need to realize they can't waste and forget. There is going to be a much greater demand placed on employees, lower wages offered, less management and less market control (throwing weight around) than before. Its not a bad thing, its just a coming of age I think, a humbling or reality check if you will.

ibogorad
ibogorad

US managers, on average, are among the best educated in the world. Compared to other countries, they are also more likely to take calculated risks. Is the automotive industry in the US in turmoil ? Absolutely. Is it the end of the world as we know it? Of course not. It is a huge stretch and ignorance with respect to business realities to suggest that american management is on the way to assume supplicant positions. The North American economy has been steadily moving towards becoming knowledge based. Such economic environment requires no less management talent than that relying on natural resources or production capacity. It is also the one that creates value, not merely implements it. Ilya Bogorad ibogorad@bizvortex.com www.bizvortex.com

TheProfessorDan
TheProfessorDan

I like this response to all the Chicken Little's of the world out there. My family is from Pittsburgh PA. Many moons ago, Pittsburgh was on top of the world because of the steel industry. The rise of Japan's steel industry buried Pittsburgh and for many years, the area was in economic depression. What happened? A lot of people left Pittsburgh but those who remained dug in and rebuilt the economy. The adapted and survived. Pittsburgh may never reach the level it was, but it prospered. I also agree with Ilya Bogorad that U.S. Managers are very smart and capable. Bashing the U.S. has become an international hobby. We have our issues, but really, what country doesn't. People forget that these kinds of things are cyclical. When I was growing up, Japan was going to bury everyone. Today it's China, tomorrow maybe Russia.

Oz_Media
Oz_Media

Okay, okay, I stopped laughing now. Lets see if I can discuss this with a straight face. I know that there are more US students receiving a college education than in many other countries, but this does not mean that they are the best educated in the world. I have worked for a couple of US companies and the upper management, "highly educated with multiple degrees" were the dumbest people I have met that actually had a role in business. We'd do seminars etc. and most of the time people would be courteous and grin and bear them, and then start laughing amongst themselves about the idiot presenters when they left the stage. with comments like" "What do these Americans know about our business? They have no idea what they are talking about, I'd lose half of my clients!" It made me wonder how they ever got grade 12 education yet alone a colleg cert. The American business model is such an extreme alternative to others that illustrating it in other countries just makes them look stupid. The US' "we need a million smanagers" to seem structured concept is a flawed and failing concept. It is expensive and companies in a competitive market can't sustain themselves thay way. But really, the best educated in the world, that's a side splitter! :D Now in your defense, you DID say AMONG the best educated in teh world. So that could mean many things, they have SOME of the best colleges in the USA. Among all the managers in the world they (teh USA) have SOME managers that are AMONG the best. On average though? You'd have to find someone else to believe that, perhaps an American will agree with you. Yes they have ATTENDED a lot of school, but that does not make one the best educated. I have yet to see or work within a more incompetent workforce than I have seen in from US companies, either working in the US, working for US firms up here or just conducting business in the US. It gives you he constant impression that you have to dumb everything down and speak a bit slower or something. Not that all Americans ware stupid, its just that in business they don't seem so quick to actually rationalize and make strong business decisions once the text book, corporate plan doesn' thold up. They seem to know ONE thing, how to conduct business IN the USA, and how to spend corporate money on road trips and conventions but that's about it. If they are really AMONG the best educated, they better let the rest of the world know because I sure as hell don't know anyone that buys it. I am sure there are many highly qualified and very intelligent people running companies in the US, but such a blanket statement does not hold water in the real world, just in stats perhaps.

T.Walpole
T.Walpole

I see you have your opinions, but lets deal with some facts. Fact - The MBA is globally accepted as the standard for business management education. Fact - The majority of top-ranked MBA programs world-wide are in US based universities. Fact - Almost all MBA programs world-wide are based on the US program model. There also exists a perception that US managers are more culturally disposed to getting things done and being solution oriented rather that process oriented. This is what makes them attractive to firms looking to implement change.

NickNielsen
NickNielsen

and I can probably show that the beginning of the decline of American manufacturing coincides with the rise of the MBA. Of course, I can probably also show that the major cause of cancer in laboratory rats is laboratory scientists. ;)

ibogorad
ibogorad

Compared to Canada even, and notice that I am from Toronto, managers in the US are, on average, better educated than anywhere in the world. The best of US business schools are the best business schools in the world. This is a fact. US managers know much more than what you so near-sightedly described. The best run companies in the world are run by people who are product of the US management and leadership education. This is also a fact. It is intellectually demeaning to you to operate on such a basic level of ad hominem attacks and stereotyping. I am sure you are better than that. Cheers, Ilya

JohnMcGrew
JohnMcGrew

The British auto industry died because by the '60s they were producing shoddy products and the labor-dominated management just wanted to keep factories running instead of adressing the problems. The American auto industry did similar, and in the '70s were complacent in their oligopoly position, until the Japanese took over. The repeating theme is that industries don't seem to wake up to this until it's too late; when consumers get fed up and their reputations are tarnished for generations.

Oz_Media
Oz_Media

Actually dies due to labour costs. Hand building cars and even partial assembly lines were fa too slow and expensive for the competitive market. Sure, luxury Coupes are still in demand at 200,000.00 pounds plus, but they are not what keeps a maker alive. The only reason to actually NEED hand made cars today is because in luxury models, the multiple curves and angle welds cannot be built by robots, or at least we can't program a robot to make one. and so they are still made by hand. For teh most part, British manufacturing has been driven by cost to a need for fully automated builds. Take a Volksawagen for example, most are made today in about 9-11 hours in a fully automated, robotic manufacturing plant from start to finish. A Bentley Coupe, now made by Volkswagen, takes over 120 hours for a handsewn headliner. That's nearly two weeks, full time to made a single headliner! The seats take about 15 cows worth of leather and 90 hours to sew by hand. It is ridiculous, mainstream vehicles cannot be made this way. So now, the less expesnive mdoels are slaped together in an assmebly line by robots and luxury coupes like the Bentley get the hands on treatment. British manufacturing plants just were not able to produce the inespensive cars at an affordable cost to compete with the market, they were forced to sell out to people who could.

JohnMcGrew
JohnMcGrew

Much of Britain's manufactured goods were designed as though to maximize the need for vast amounts of manual labor, which was clearly at odds of the American approach of efficiency. Much of this was driven by government policy that sought to maximize employment at the cost of manufacturing efficiency. By the time of WWII, this really hurt Britain in the war effort, and a continuation of this policy eventually doomed their auto industry by the '70s in terms of cost and quality.

save_clippy
save_clippy

Aston Martin is now a Malaysian-owned company. Jaguar hasn't been British for years. Robotic production certainly had nothing to do with those.

JamesRL
JamesRL

Today its the US auto industry, a few years back it was TV manufacturing and the cycle keeps continuing. No matter how smart US managers are, manufacturing will continue to migrate to lower cost centres as time goes by, because consumers continue to favour cheaper goods as opposed to locally produced goods. That doesn't mean the entire economy is shot, just one sector, and in other sectors, like software, things are ok. While GM, Ford and Chrysler are struggling, Honda, Toyota and Nissan are emplying US workers and making cars profitably in America. Most of your suggestions are commonsense and are applicable to everyone all the time. James

tekwrytr
tekwrytr

The situation has changed to the degree that it is no longer sufficient to manage by dictate. That is, the military-model of "you have to do what I say because I'm the mommy" is inefficient and, increasingly, ineffective. The normal policy of promoting from within is flawed, because managers are promoted from the ranks of subordinates, often removing the most productive from the subordinates, with little thought or concern for the ability of that person to manage. "Management" is based on "figure out what needs to be done and then tell subordinates to do it." It may be more useful for managers to learn how to persuade, rather than coerce, and to motivate, rather than threaten. While it is easy to find external factors that may influence the decline of managerial competence, it is difficult--especially for managers--to accept the fact that they may be the cause of their own decline. In this case, the philosophy of "if it ain't broke, don't fix it" is useful; management is badly broken. Any good ideas on how to fix it? tekwrytr

CareerCoach
CareerCoach

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