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What is Fair?

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Yesterday, July 4, the San Diego County Fair, a combination of fried food feast, cabinetmaker creations, mind-numbing merchandise marketing, and carnival, ended its 2012 run.  That is one sense of fair.

Time’s Joel Stein, one of my favorite journalists, in part because of his irreverent tendencies, made a point about what is fair in his essay on solving the European economic instability (Stein, 2012).  Stein proclaimed that fairness “is the rallying cry of idiots” (p. 62) and, while that may be a tad harsh, in the context of the essay, a functional definition of fairness seems elusive.  Even if we could agree on definitions of fair and fairness, such agreement might not have utility beyond some moral keel rather than a rudder.

Stein (2012) offered examples that seem to suggest that people who cry out for fairness are frequently those who do not have something that they want somebody else to provide.  People in some of Europe’s southern countries want their counterparts in the north to be fair.  This, of course, is not always the case.  As a professor, students seem inclined to ask for, or demand, fairness in grading; rare indeed is they outcry for justice in grading.  As a consultant, clients want fair valuations for their companies and for services rendered; again, justice is, at best, an implication.

In each of these instances, fairness seems to be subject to negotiation, as if we should not expect what is fair to be somehow self-evident and obvious within a specific cultural context.  So, fairness is not a matter of objectivity.  Fairness also seems to be too rarely associated with accountability; people asking for fairness generally do not seem to want the other party to hold them accountable for the past, but the future might be a topic for negotiation.

People asking for fairness frequently seem to request grace and generosity from others.  Perhaps fairness is easier to request than grace and generosity because people in some cultures see fairness as an obligation whereas graciousness and generosity are gifts from one to the other.  In those cultures, asking for a gift might be rude and seeking fairnessoug may carry an implication of guilt if the request is denied.

Even though I dislike the traffic, the crowds, the exaggerated prices, and the excessive calories, the Fair somehow seems easier to fathom and define than the fair.

Reference

Stein, J. (2012, July 2). Acropolis now. It’s not hard to rescue Europe from Greece. Even I have a plan. Time 180(1), 62.

Opportunity, the Economy, and the 1%

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Joseph Stiglitz, a Nobel Prize-winning economist, offered a rather narrow view of opportunity in a recent interview (Luscombe, 2012). Stiglitz seemed to propose that opportunity can only be measured by what people actually do with opportunity, by whether people improve their lot in life at all economic layers in the United States. Stiglitz proposed that other countries have surpassed the United States as the so-called land of opportunity; while this may be the case, as measured by upward mobility, is this truly a reflection of lack of opportunity or does it more accurately reflect comparatively lower levels of motivation or execution resulting in capitalization on those opportunities?

Stiglitz raised a key factor in economic growth, which seems otherwise ignored, or at least under-considered, in the overall harm done to the economy if society either takes steps to restrict access to opportunities by economically disadvantaged people or does not consciously provide mechanisms to improve that access. Stiglitz asserted a artificial yet de facto restriction of access to the potential of people at or near the bottom of the economic ladder. I have long supported the premise that a key to sustainable improvement in business performance or the greater economy is to take strategic and tactical steps to raise the performance of those currently performing below their capabilities and capacities. On this point, I seemingly can agree with Stiglitz; however, even the best leaders cannot force people to do what they consciously or unconsciously elect not to do.

Leaders, whether political, academic, business and organizational, community, or religious and social, can encourage, empower, and inspire people to live into their potential. The opportunity to live into one’s potential is an insufficient driver of realized potential. The unasked question is whether systematic or systemic barriers prevent the realization or whether something else may be going on? Stiglitz approached the unasked question when he offered that free markets, in reality, are a false premise because laws and regulations shape all, or most, markets so access to opportunity may be artificially, yet legally, constrained.

If laws and regulations are constraining access to opportunity or it’s realization, then political leaders should take steps to identify those constraints and remove or change them. The people positioned to propose those changes are members of the so-called 1%, a term which Stiglitz also takes credit for first offering. Insufficient attention seems to get paid to the reality that a 1% will always be in a better position to do something than a 99%. We simply do not live in a society or world in which every is equal with equal resources, or equal power, or equal capacities, or equal potential. The labeling of people as members of “the 1%,” as if only one such strata exists, is also a false premise and is not necessarily or inherently a demeaning moniker.

The challenge that is greater than a simplistic label or cry of lack of opportunity is to develop the societal will to examine the causes for unequal access to and realization of opportunity and potential. How do leaders help members of society at all economic levels understand and seek to live into their potential. What defines opportunity and potential for individuals, for groups, and for society? Once somebody identifies their potential, we may find that the next major hurdle is getting people to want to live into it.

One of the biggest challenges I see as a graduate school professor land that I hear from my public school teacher colleagues is that students offer as a primary reason for not doing homework that they simply did not want to o it. Teachers cannot get students to work. Parents cannot or will not get students to work. Why should anybody expect the system to facilitate the attainment of a person’s potential when neither parent nor teacher nor, sadly, a large portion of students clearly demonstrate tat the will or the ability is not there?

Reference
Luscombe, B. (2012, June 11). 10 Questions, Time, 179(23), 66.

Bain Capital and 1980s-vintage Management Consulting

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The discussion of Bain Capital provides an interesting backdrop to the first topic for this course. Bain Capital (2012) began in 1984 as the investment arm of management consulting firm Bain & Company. In 1984, I completed my MBA studies at Rutgers University’s Graduate School of Management and joined a management consulting firm to help that firm, not Bain, transition from their traditional expertise of scientific management and productivity improvement to process and quality improvement based on the principles of Deming, Juran, and numerous disciples. Consulting firms and their clients interested in improving operational and financial performance had one primary tool in their toolkit, productivity improvement leading to staff layoffs of, typically, 20-30%.

It seems easy to complain about companies buying companies or parts of companies and then reducing costs, often through labor reductions, in order to realize a profit on their investments.  Investment firms have an obligation to their investors to produce a positive return on their investments.  For many of the firms that Bain and others purchased, the alternative was closure; companies like Bain may not have been able to save every job but some organizations were able to survive as the result of significant changes in operations.  In some cases, however, the seller to the investment firm made out much better than the investment firm or the purchased company’s employees.

Productivity improvement from the 1950s through at least the middle of the 1980s had scientific management based on the work of Taylor, the Gilbreths, Emerson, and Henry Ford, among others. Work measurement and work management were common. Colleagues of mine from my early years of consulting would tell of consulting firms that would, as crude as it sounds, essentially take a list of people and simply mark every fifth one for termination. The consulting world still includes firms who offer little other than work measurement-based productivity improvement and resulting staff reductions. I knew the techniques, but my clients seemed to only need me to use them to optimize the use of staff without staff reductions.

Scientific management principles applied to manufacturing firms initially, most likely because manufacturing was the basis of the economy in the United States and Western Europe for much of the 1900s. I was director of operations for a productivity consulting firm that worked primarily for government and service organizations. We helped then-growing telecommunications companies determine how best to staff and organize hardware installation teams and customer service organizations. We helped government entities figure out how to handle rapidly-increasing work volumes without expanding staff, since tax revenues were not keeping pace with demand for services.

In the 27 years since I began my consulting career, automation has changed most work processes. The automation of processes relies significantly on the principles and practices of scientific management. Improvement of operational and financial performance, of efficiency and effectiveness and quality, and the reduction of waste in its many forms continue to keep the attention of managers and to be central to the conversation about improving business and government performance. It is easy to forget that scientific management is at the root, even today, of how organizations get better, including enhancing the value of shareholder equity.

Today’s tools often seem more sophisticated than those my colleagues and I had available in the 1980s.  However, a goal of investors continues to be a positive return on investment. Managers and executives, among their many and conflicting objectives, have an obligation to shareholders to improve performance and assure investors that investment in certain companies and industries is good and not utter folly.

References
Bain Capital (2012). About Bain Capital. Retrieved from http://www.baincapital.com/AboutBainCapital/Default.aspx

The American Divide – Causes or Effects?

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A fascinating read providing some insight into causes, or possible effects, of division in the United States. http://online.wsj.com/article/SB10001424052970204301404577170733817181646.html?mod=WSJ_WSJ_US_News_10_1

I’m not sure whether this article identifies causes or effects, but it seems clear that people who profess a religion, delay children until after marriage, stay married, and finish high school, if not college fare better economically than people who profess no faith or religion, have children outside of marriage, get divorced, and do not, at least, finish high school.  The article does not examine whether the more “traditional” lifestyle leads to more economic success or whether people who are more economically successful gravitate toward a more “traditional” lifestyle.  The presented facts are food for thought.

The demographic differences seem to suggest that, as the middle class experienced division since 1960, during a time of broad cultural change in the United States and elsewhere, two seemingly distinct cultures emerged.  These distinctions may help account for the increasing sense of division in U.S. society and among our elected officials, along with the increasing sense of polarization in general.  Whether these are causes or effects, what is the vision of leaders for addressing the causes and the effects?