By Design: Gross Mismanagement Part II: Downsizing as Dumbsizing

Many countries struggle to provide for an increasing number of unemployed citizens. Some are financially strained and facing default. Back in the days when there were plenty of jobs nearly everyone who worked could take care of themselves and the system worked well. If jobs could be found for whomever wants to work today, it would solve a lot of the world's current problems.

People without jobs don't get married. They don't buy cars, houses, groceries, appliances, furniture, Christmas presents, office equipment, injection molding machines, and the latest digital devices that stimulate the economy. Young people with time on their hands get into mischief and are easy prey for any fast talking evangelist who promises to solve all of the world's problems.

It is obvious that the winner-take-all global economy is not generating enough jobs for those that want to work. The United States has an abundance of freshly minted college graduates who are having difficulties finding employment. There will shortly be thousands of returning soldiers who need and definitely deserve good jobs.

University/job mismatch

An average unemployment rate of over 9% is high for the U.S. At the same time, employers, including manufacturers, are claiming they could expand their businesses but cannot find qualified employees. There is evidently a mismatch between the available jobs and the capabilities of the job seekers. It has always been this way, and there is no sound reason why this mismatch should be stunting the growth of the economy. The lack of jobs for recent college graduates is a good example of how this mismatch came about.

Some university curriculums fully prepare graduates for narrow, well-defined careers. Most provide a general education that can be used in many different occupations. My own field of product design is a good example of a general education. Product designers have all kinds of backgrounds. However, most formally educated product designers are mechanical engineers or industrial designers.

Graduate mechanical engineers could take jobs requiring the design of earth-moving equipment, medical products, air compressors, lift trucks, consumer products, heavy electrical switch gears, lawn and garden equipment, cars, motorcycles, boats, trucks, airplanes, inline skates, and so on. Such a designer should also know how to work with the common materials such as steel, rubber, glass, plastic, aluminum, wood, ceramics, etc. They should also be aware of the mind-numbing array of manufacturing processes used for all of the different materials.

There is no way that a university could prepare a student to know how to perform all of these varied jobs. The answer to this problem is simple. Universities didn't try to teach their students everything they needed to know. They teach the basics and the very latest state-of-the-art technology that theoretically could be used on many jobs. If a student commented that his family's business produced metal gears and he needed to learn how to design and manufacture plastic gears, he was told that gears were beyond the scope of the course. The professor would then go on to explain that each job required specialized knowledge that the student would learn "on the job." The professor was correct. This wasn't an ideal situation; however, this is the way it had always been done, and the practice worked well.

On-the-job training needed

The system worked because companies that required special proprietary knowledge had a few senior designers and maybe even a chief engineer who knew everything about the company and its products. Under the old model, the new graduate arrived on the job with a general engineering education plus all of the very latest technology, but no knowledge of gears.

This was alright, however, since the company's senior engineers taught the new graduates what they needed to know in order to make gears. Simultaneously the new employee was teaching the company's senior engineers how to use those portions of the new technology, such as computer aided engineering, that were applicable to the manufacture of gears.

This system was thought of as "on-the-job training" of a new employee. It was actually an exchange of knowledge between new and old employees. There is a high probability that some form of this "on-the-job training" also took place in banking, school teaching, health care, merchandising, farming, and most other forms of human endeavors.

The system worked.

In fact, it worked so well that the U.S. developed the world's largest economy while enjoying the world's highest standard of living. It is difficult to understand why anyone would want to change that system, but that is exactly what was done.

Downsizing as dumbsizing

In the mid-1980s a new group of university-trained business majors with no practical experience began to assume control of corporate America. Following the latest management fad, they strove to create the lean and mean organizations that were so highly prized by the stock market. They quickly learned that downsizing was the fastest way of increasing quarterly profits. Downsizing became dumbsizing and many of the experienced designers were replaced by less costly, new graduates with no knowledge of the company's products.

Eliminating the senior employees also resulted in the loss of the knowledge of how to design, develop and manufacture the company's product. They also lost their corporate history. There was no one left who knew why things were done the way they were or what to do if things went wrong. With no one left to train them, the new designers were left on their own to make beginner's mistakes while learning by the expensive and time-consuming process of trial and error.

These new graduates have now become the senior designers. They have gained the knowledge and experience to teach and learn from a new class of graduates. Regrettably things have changed. Corporate America has now decreed that they can no longer afford the time and expense of on-the-job training. The current concept is that new employees must be fully qualified and capable of doing their jobs with no additional training.

This is wishful thinking. Universities cannot produce graduates who are fully qualified for all of the different jobs they may assume. The uneducated people who are now moving from job to job cannot be expected to be qualified for any job other than by prior experience. Both groups of potential new employees require varying degrees of on-the-job training. The quicker corporate management recognizes this fact and starts providing on-the-job training the sooner they will have all of the qualified employees required to sustain their company's growth.

This is the way it has always been and the way it must be again. Corporate America could afford in-plant training in the past and they can afford it today. Failing to train enough employees to sustain a company's growth is another example of gross mismanagement.

GLB