Skill Wars: Winning the Battle for Productivity and Profit
By Edward E. Gordon
Format: Softcover, 368 pp. ISBN: 0750672072
Robert T. Howell
Fort Hays State University
In this time of rising unemployment and economic uncertainly, this work by Edward Gordon hits home with the information he presents in Skill Wars: Winning the Battle for Productivity and Profit. The main question asked in the book is "Why is this country laying off more and more untrained and under-skilled technological workers while at the same time bringing in more and more highly skilled technological workers from other countries?" Gordon also reviews the history of what other countries have done with this same problem, which countries are presently the most successful at developing technological skilled workers, and what they did to make it work. He also gives many examples and ideas that corporate training departments can use to improve their departments and measure their success.
During the introduction of the book, Gordon details the shortage of skilled technical workers in this country. He makes it very clear that this country has been leading in the development of innovations; however, Gordon notes that it is a shame that we do not have the skilled workers needed to produce these innovations in a tangible form. Gordon asks, "Why is there such a shortage of technical skilled workers in this country?"
Gordon identifies many reasons, all contributing to the problem; but the main reason, he indicates, is that few parents want to see their children in an apprenticeship program, even if they have the interest and aptitude for it. Gordon indicates that schools are providing what parents want. He states, "A central problem of the people paradox is that the great American 'education machine' of elementary/secondary schools is not up to this revolutionary task. Its curriculum and priorities are geared to college preparatory education alone, not techno-education, and most U.S. students today will never finish college" (p. 29).
With this attitude, companies are getting more and more workers without the proper preparation in technical education needed in today's global economy. Smith and Rojewski (1992) addressed this same problem when they wrote that many non-college-bound students are entering the world of work without any skills that will ensure their success. This is where companies need to realize that the business communities in the U.S economy rest largely on the exponential expansion of human knowledge and workforce education. The 21st century will become one in which the knowledgeable worker is more important than the one who works with just his/her hands. This is a major shift for American businesses and manufacturing corporations. Since the early days of manufacturing and with the development of the assembly line, workers just did their job without having to incorporate cognitive skills. In order to make the change from working with one's hands to that of knowledge and thinking, it is estimated that the average worker will need at least one month of training each year just to keep up with new technology. Gordon stated that the American Society of Training and Development reported that American companies are light years away from what is needed in the training provided. The report went on to say that 90% of training is done by 5% of the top corporations.
Once Gordon gets one's attention in the opening chapters, he moves on to other areas. Unlike many books, instead of just identifying problems, this one goes further by giving examples of what other countries have done in the past, what systems worked, and which countries are at the top today in producing skilled technological workers. After the opening section, Gordon divides the book into three sections to present the information that can be used to correct many of these training shortcomings.
Measuring Human Capital Development
As corporations proclaimed that that our schools are failing to provide enough skilled workers to fill thousands of high-tech jobs and in an effort to justify the investment of high-cost training, Gordon begins this next section of the book. Human resources and training managers will find this section very useful. In this section Gordon provides information which identifies the urgent need to train workers to become skilled with today's technology, which in turn provides a larger profit for the company. Gordon identifies this use of training as the return on investment (ROI), very important to successful companies and training departments.
It seems that when the economy isn't good, the first thing companies do is downsize and cut training programs. In this section Gordon explains why cutting back on training is the wrong move. He cites many examples of companies which did cut training and failed to utilize their employees' full potential. On the positive side is the long list of companies which have made the commitment to training and have succeeded. The successful companies were able to bind their human capital resources with their organizational capital and their customer capital into what is called the financial capital.
Calculating the ROI is an ongoing problem for companies and training departments, but the successful companies are doing it. They are developing many different methods of measuring their success vs. cost involved. Gordon lists many of the different approaches used by training departments and identifies the following nine steps to success in a training department.
- What employee performance area have you targeted to improve?
- What is the productivity target?
- What is the gross revenue generated from employees doing their current work?
- What is the value of outsourcing the work being done by your employees?
- What are the total work hours for all employees being trained in the unit?
- How many hours are there in the training program?
- How many employees are in the training program?
- What is the unit in training profits return on sales?
- What is the trainee's productivity rate during the training?
With these nine steps, Gordon provides a structure for training departments and corporations to justify the high cost of training.
Reports from the Firing Line: Improving Productivity and Performance
As one can see, Gordon uses this section to tell of those major corporations that failed; some were household names in America, names that millions of people depended upon as a stabilizing institution in this country. What happened to them? At the same time, other corporations got larger and stronger; and still others were able to recover from the near disaster of going out of business. Examples of poor management and good management tactics are provided with each case. Gordon uses these examples to show what needs to be done by corporations to stay competitive.
Some of the big names in the business world failed to make the change and went out of business. Companies like Montgomery Ward, after 125 years in the retail business, could not make it. Woolworth soon followed in 1997 after 117 years as part of the national fabric. Many thought that retail giant Sears, Roebuck, and Company would be close behind, as it was in the same type of business for about the same number of years. This did not happen, due to management's realizing they needed a complete culture change, from management on down. They adapted what they called a "softer side of Sears" policy in which the customer came before profit. This change was driven all the way down to local stores and challenged employees to be innovative in meeting customer needs. Another giant retailer that surpassed Sears was Wal-Mart, which uses this same method of "customers first" and providing what customers want.
Sears and Wal-Mart were able to become giants in the retail business by changing the way they do business, in areas such as measuring customer service, performance improvement, benchmarking competitors, and building a new culture paradigm through consensus building activities. Changes like these do not come easily, since both employees' and management's attitudes need to be changed. Management at Sears called it a culture revolution.
Ford Motor Company was experiencing the same issues when they decided to make a culture change. This time it was upper management blaming the employees for their failure. In 1971 Ford hired W. Edward Deming to help install a quality system at Ford. Deming traced the problems to upper management, who were telling employees to shut up and just do it. He stated that workers were being handicapped by the system, and the system was the management. It took Ford years of training before employees were able to confront the system and challenge managers' self-defeating attitudes. Ford invested large amounts of capital in training that would change the way things were done and provide larger profits for Ford.
Changing attitudes and letting employees have a larger voice in what goes on is not a new concept: Japan has been using this style of management for years. Many European countries also use this style of management. What has taken American mangers so long to make the change? What were they afraid of?
Let the Skill Wars Begin
Employees today need to think; they no longer can be just machine operators who feed material into a machine and take out the finished product. Today's successful machine operator's job might include new tasks such as producing written reports, speaking at team meetings, participating in brainstorming sessions, and determining cost/benefit alternative solutions. Today's employees are also expected to take responsibility for quality control of the product they are making.
Management desperately needs employees at all levels who can perform today's needed skills. Employees such as managers, technical workers, support staff, and production workers are all affected by this skill gap. Successful employees need to have the skills to meet today's culture change, skills such as reading, math, grammar training, management writing skills, office practice, computer skills, software knowledge, foreign language skills, report writing, problem-solving, and conducting meetings (Howell, 2001).
Where do employees develop these necessary skills? The sobering fact is that many managers, technical workers, office support staff, and production workers will require extensive workplace educational training in order to meet the needs of the company. Gordon asks: If the American education system is not developing future workers to meet these demands, where will they come from? The answer is the same now as it has been in the past: U.S. businesses are recruiting from overseas. Since the end of the World War II, businesses have been bringing in workers with technical skills who were displaced by the war. This trend has continued today. In 1999 laws were proposed by the U.S. Congress to allow 90,000 visas for technology-related workers, up from 65,000 the year before.
Gordon goes on to examine many different trains of thought as to why there is such a shortfall of qualified employees in this country. Business blames public education; training departments blame management; management says that employees are too old and too dumb for effective training and fight against increasing budgets for training. Let the wars begin for skilled employees.
A Lesson from the Competition
In the past, many skilled employees were brought into this country from Europe. Today we are finding skilled employees from Asia as well. These countries are producing employees with skills desperately sought by today's businesses, but it was not always that way for them. During the 1980's many European countries such as Great Britain, France, Belgium, Denmark, Ireland, and the Netherlands were facing the same problems we are today. A study showed that most employees possessed the education level of a 13-year-old. What did they do to turn things around?
Gordon states that each country took a different approach to the problem of training skilled employees. The one constant was that a lot of time and money was spent to make the programs work. Not all programs worked; some countries failed at first. Great Britain was one of the countries that had to make changes in its training programs. What Gordon suggests is to look at the past, see what worked and what didn't, and try to develop a system of training that will work for this country.
In the end, it's people that count. Placing the blame for under-skilled employees is not going to solve the problem. What is needed is a proactive approach by everyone involved. Gordon states that we need to prepare students adequately with the needed education for the high-tech careers of today and tomorrow. Providing future employees with a college education is not always the answer. According to the U.S. Department of Education, about 25% of Americans receive a B.A., M.A, or Ph.D. degree each year. The questioned asked now is "What happens to all the others?"
For many Americans, entering the workforce signals the end of their education. This can be a major problem for those who dropped out of high school, went to work right after high school graduation, or did not complete college and have never worked before.
Good News/Bad News
The good news for future employees is that it is estimated that 70% of the future jobs in America will not require a four-year college education. It would appear that there will be ample jobs available to all those non-baccalaureate-educated future employees. The bad news is that only about 10% of these future employees will be job-ready. There is more bad news: non-college-bound students remain a low priority in most American high schools.
Herein lies the problem: many people see education as the exclusive job of the schools. Teachers see career preparation as an intrusion into their classroom and a plot by American business to create factory schools controlled by corporate America. To top it all off, many conservatives are opposed to using tax dollars to fund student career preparation programs.
As Gordon stated earlier, he feels that parents are the real problem. Parents don't know what schools are doing. Most parents view the secret of getting ahead as the completion of a college degree. Parents must realize that their children need the skills to earn a living and are not getting these skills in school. This is the real crisis, according to Gordon.
The paradigm change happening now is what's going on in the American factory. Henry Ford developed the high-speed assembly line, which took away the workers' ability to think--they just stood there waiting for the work to come to them and did the job without thinking about it. Fredric Taylor perfected this art even further with his time-and motion studies. This signaled the end of the craftsman and took away the ability for employees to think. These methods worked for years, but times changed as customers demanded more for less. Companies demand more from their employees to meet the challenges of the future. Now employees must be able to master essential skills in math, reading, problem solving, teamwork, communication, and computers.
A new approach in education is beginning to develop in the country. Government money is being funded to support school-to-careers programs. Communities and businesses are taking an active part along with schools to ensure that students are better prepared to meet the growing demands for skilled employees. In an effort to meet the needs of the future, former President of the United States, Bill Clinton, signed a bill that called for the creation of a National Task Force on Preparing Youth for the 21st Century, College, and Careers. Gordon states that there is not one best solution to this problem; but like other countries, we need to work with what works best for the times. Gordon finishes his work by providing many different examples of what other states, corporations, and schools have been doing to overcome the problems they have encountered.
In this book, Gordon has done an excellent job of putting the problem together. He admits that he in not an educator, corporate executive, or public servant. He is an historian who uses what has happened in the past, what is happening now, and what others see as the future to provide information to solve problems. Gordon's timing for this book is very good; he sensed the economy changing and the need to make changes. Things can be turned around, as other countries have done in the past. We do not need to make the same mistakes as in the past, but we must realize that we need to begin now to make changes to stay competitive in the global market place.
This book was written for the corporate trainer to justify a training program and to obtain a larger budget. It provides many useful methods of measuring a training program and gives needed information to justify a training budget.
The book provided many answers to the problems and questions that have been asked over the years. Industrial and technical teacher educators should read the book and utilize much of the information to justify and strengthen their programs. What the author says in the beginning chapters is what we have been talking about for years. We know that industrial and technical educators play an important roll in developing students' interest in technological skills; this book gives the profession some important facts to present to school administrators to help justify and strengthen our programs. We could also follow some of the author's advice and develop a means of measuring our success in teaching our classes.
Smith, C.L., & Rojewski, J. W. (1992). School-to-work transition: Alternatives for education reform. Youth and Society, 35(2), 222-225.
Howell is Assistant Professor in the Department of Technology Studies at Fort Hays State University in Hays, Kansas. Howell can be reached at firstname.lastname@example.org.