The ‘Science’ behind Changing Jobs for Better Pay

Leonard Mlodinow writes in a recent article in Forbes about the paradox of Meritocracy.

..one can imagine a more realistic utopia, where people are treated fairly and are compensated according to their skills. A true meritocracy. But there is a lingering problem–How can we tell what a person is really worth?

In today’s economy where knowledge work has overtaken traditional physical work, there is no easy way to count the number of widgets being cranked out to measure worth. For a truly fair world, compensation should be directly tied to value-added. This concept compounds the problem even further because value of an enterprise is not the assets and ‘goodwill’ anymore, but a complex series of judgments made by investors regarding competitive ability, industry positioning, branding, etc. Unfair in some sense but very much real, especially in large businesses where direct contribution to ‘value’ is buried way deep under all the financial consolidations and investor hysteria that makes up the stock market ticker symbol.

So, how does one draw a relationship between an individual’s contribution to the enterprise and the corresponding value-added? One does not even try it! Mlodinov continues to point out that

In business, merit supposedly determines pay. But in fact, it’s often the other way around, with pay determining merit. In controlled studies in which people were assigned random tasks with random pay, psychologists discovered people behave as if the higher-paid individuals have superior ability. And they do so even if they know that the pay scale was arbitrary.

Although Mlodinov does not reach the obvious conclusion in his article, the inescapable message to knowledge workers is that they will be recognized for their pay-scale first and merit second. The incentive for advancement is tied to boosting their pay-scales and not necessarily on adding value to the business. And if the climb through pay scale ladders is slow at the current company, move to another for a ‘fresh start’. Or if the risk is worthwhile, participate in the open market yourself by turning into an independent consultant. We are conditioned to value the recommendation from a $500/hr consultant even though the same recommendation from a $50/hr employee has bounced around without gaining any traction.

The message for businesses is equally clear. To add the greatest value to the business we need a robust and fair mechanism to recognize and reward merit through a visible tie to company performance. The alternate is to try and add value with a mix of (a) pay-scale focussed, unmotivated employees, (b) new employees who have joined to get that pay-scale jump they could not in their old companies, and (c) high-priced, short-term consultants brought in to try and add value using the unmotivated employees mentioned above….or by bringing in even more high-priced, short-term consultants.

Businesses need a core of meritocracy in its Utopian sense, and that core can drive value-addition in the most efficient and sustained fashion.

Tales from Two Worlds – On the Same Planet

The Transportation Security Administration (TSA) holds back a passenger carrying the new MacBook Air laptop….not able to believe that it has ‘no hard-drive’.

A Freshman trying to use Facebook for homework study group is facing expulsion.

All these students are scared ….about using Facebook to talk about schoolwork, when actually it’s no different than any study group working together on homework in a library….students argue Facebook groups are simply the new study hall for the wired generation.

But you can interact with a system using touch and gestures on a tabletop rather than keyboard and clicks. Microsoft’s new Surface Technology is coming to Harrah’s Rio Casino in Las Vegas this Spring.

You can also control your iPod with your eyelids now.

Bat an eyelid to replay your favorite iPod tune with a new Japanese remote control that works in the blink of an eye. When a user winks, movement in their skin is detected by sensors clipped to their glasses or headphones…

You can get high-tech from vending machines now. Doug Amath stuck at Dallas Airport ended up taking pictures of vending machines for iPods, Sony, Proactiv and Rent-a-Laptop that dot the airport terminal. We have come a long way from the soda and the chips….

Learning from History

The Economist has a story on why Japan lost the mobile-phone wars to Scandinavia, Korea and others despite having been a pioneer in technology and usage of mobile devices. Japanese players are doing alright within Japan and still provide high-value components like the hard drives and screens from Toshiba – but the mobile world has moved on with other global players in hardware, software and usage.

The analysis on why the Japanese failed has an uncanny correspondence to trends and challenges in Enterprise Business Systems today.

“First, too many Japanese companies make phones. All major electronics firms sell them, mainly as a matter of corporate pride: not to do so would be a sign of weakness. As a result, 11 different domestic makers compete, most of them at a loss.”

Well, too many businesses try to write their own systems from scratch instead of reusing the globs of code written already all over the world. Standards and technology have existed for quite some time now that help put an ‘envelope’ around the code you want to reuse. This allows a black-box approach to ‘composing’ new arrangements of business-models. The value is in how the components are put together – and not always on the individual component.

“Second, Japanese manufacturers concentrated on the domestic market at the expense of global growth. Yet the national business model is unique: mobile operators design the features of the phone, and the manufacturers must comply. So the makers do not have a good understanding of what users want…” 

“Third, the manufacturers designed products around home-grown technical standards and special features that are not used elsewhere. “

This reminds me of IT shops in companies faithfully implementing every single enhancement request from business users without asking the additional questions, “Is this the standard way the industry operates? If not, then does this enhancement give you a unique competitive advantage?” The discussion should focus on reducing total cost of operations of industry-standard ‘utility’ processes and on investing resources in processes that create a competitive edge.

“Fourth, high-end customers who want sophisticated phones drive the Japanese market, but the main growth in the wireless industry overall is in emerging markets, which need cheap phones. The world’s top three makers—Nokia, Samsung and Motorola—focus on this segment.”

This is where the IT groups spend their annual budgets on high-end enterprise systems – ERP’s, CRM’s, SCM’s and similar ‘will fix everything and the kitchen sink’-initiatives. No money left over to analyze and improve the typical users’ workday  -better and more flexible productivity, collaboration and organization tools. No wonder the IT groups within business organizations are facing challenges from ‘mass-market’ technologies like Google Apps, WordPress blogs, Linked-In Contacts and a variety of desktop and mobile gadgets that help with balancing work and home lives. The tech-savvy, gadget-laden, knowledge-worker – with an equivalent of an IT shop at home – is the new ’emerging market’.

IT groups supporting business enterprises can add this chapter to their ‘Learning Book’…yet another set of rationale justifying the need to reinvent.

Gamers make the Best Employees

Brent Hutchison John Seely Brown and Douglas Thomas recently wrote on a Harvard Business Review blog about the Gamer Disposition – an attitude and set of traits that are ideal for today’s employees. He writes that

Today’s multiplayer online games are large, complex, constantly evolving social systems. Their perpetual newness is what makes them enticing to players.

The gamers have bottom-line orientation, understand the power of diversity, thrive on change, see learning as fun and pride themselves on discovering radical and innovative solutions. All these together are the perfect buzzwords for a resume or a cover-letter that I want to receive for everyone on my team. In this age of accelerating change, we cannot afford static structures and certainly no team that cannot be nimble and quick at the draw.

After establishing that Gamers have the best traits for being the best employee today, it will be interesting to ponder why that might be so. Interactive games provide a compressed timeline, a clear goal but unstructured and unknown environment – requiring rapid learning, environment scan, evaluation of options and decision making…in order to get rewarded by immediate feedback and hopefully a promotion to the next level!

Looks like getting Gamers to be employees is a great idea, but be prepared to create a challenging and exciting environment for them…or watch them switch to another game.

The New Heroes -The Adaptables

‘Being adaptable’ is one of those backhanded compliments. It can have negative connotations associated with being wishy-washy, spineless, impressionable, naive, crafty, calculating, opportunistic and similar. Despite this the history of civilizations is full of examples where adaptation was critical for survival and for growth.

Adapting and evolving to exploit changes in the environment has now become a business buzzword – being Agile. Definitions of agility can range across the continuum from operational agility to business-model agility. I agree with the latter definition that James Taylor clarified recently.

Agility to us, I think, is a measure of responsiveness to change rather than responsiveness to customers or to orders. It is not the time it takes a company to, for instance, restock a product. While that’s an interesting thing to measure, it is not agility to me. The time it takes a company to change its reorder approach or a specific product/vendor is, however, a measure of agility. 

Being an agile organization requires it to be able to rearrange its people, processes and systems into new configurations at short notice. ‘Composing’ new value chains and business models using existing processes as components is the new competency that sets organizations apart. The new generation systems need to support these process-components in Service Oriented Architectures (SOA). And, we need many more of those ‘multiple-hat’ people who morph among roles like architects, business-analysts, project-managers, designers and customer-advocates.

Those video-game playing, text-messaging, social-networking, hyperactive, mobile, multi-tasking kids – and adults – are perfect for this paradigm. Systems are now available as Services that you plug into as and when needed. Businessweek claimed recently that  you may never buy software (or hardware) again.

No longer do small companies have to spring for servers and IT staff just to get the basics. With software services, you don’t install programs on your own computers or server. Instead, you sign up online for software and use it while you’re connected to the Internet.  

This agile, anything-can-change-at-any-time world needs ‘being adaptable’ in spades. The pace of change is accelerating and business-ecologies are constantly forming, dissolving, splitting, aggregating and reforming in a kaladeoscopic blur.

The Adaptables are center-stage now – as always leading the charge for survival and growth.

Follow thy Customer

ShopRite grocery stores have just started beaming customized ads to shoppers through their computerized shopping carts – as part of a Microsoft Atlas technology roll-out.

Microsoft will deliver the ads based on data obtained from ShopRite’s customer loyalty cards, according to the companies. When shoppers scan their cards on the computerized shopping carts, they will see ads and promotional offers on the screen based on their purchasing histories.. 

Most retail stores track customers’ path through the store to gauge effectiveness of various displays and product placements – mostly as passive observation to help with merchandising and advertising – and not for personalized sales and advertising. So, this is a proactive move at influencing customer behavior while shopping and not the usual attempt made with discount coupons spewing out of the printer at the checkout lane.

This story reminded me of the sophistication that some Casinos had put into place almost two years ago. At Harrah’s

Gamblers don’t just win money when they play at one of Harrah’s 26 casinos. When they swipe their loyalty cards, they’re also eligible to win a variety of perks, from appetizers to Swedish massages, depending on their level of spending and the information Harrah’s has collected about them. …..Data from low-rollers also convinced Harrah’s to redesign its casino floors to include, for example, a higher percentage of lower denomination slot machines and video poker games—for a 12 percent hike in slot revenues.

Loyalty programs of various kinds need not be just a mechanism to track and reward repeat customers. If technology is used appropriately, a loyal customer can now be tracked through the shopping experience and also through the service delivery experience. A very comprehensive set of data can then be collected at that micro-level of interaction – analyzed at an aggregate – allowing new products, services, marketing and attention to be delivered seamlessly back to the customer at the individual level.

Customer and Seller can now be engaged in a longer relationship, learning from each other and helping each other be more efficient, effective and profitable.