Dr. John Psarouthakis is the Executive Editor of www.BusinessThinker.com Internet Magazine, Distinguished Visiting Fellow / Professor at the Institute of Advanced Studies in the Humanities, University of Edinburgh, Scotland, Publisher of www.GavdosPress.com and Founder and former CEO, JPIndustries, Inc., a Fortune 500 industrial corporation
The world is a better place because of great novelists and poets and painters and musicians and sculptors and actors. We could include great chefs on a short list of specialists who add value to our cultural lives. Even such a basic need as food, after all, can be lifted above the ordinary and into the realm of art. As a voracious consumer of the arts (and occasional patron of the arts), and as someone who enjoys a wonderfully prepared meal, I obviously believe esthetic good things enrich us all. I also believe everyone’s education should include a well-guided tour of the literary, visual, and musical arts. But only a relative handful of citizens can pay the rent by knowing the difference between a sonata and a fugue, or by sharing their opinion of Moby Dick—or, for that matter, by knowing how to play a fugue or write a novel or choose the best fresh ingredients and bring them to table well enough to rent a building and start printing menus. The world doesn’t work that way. The overwhelming majority of us always have needed to make a living in the mundane realm of commerce and industry (or, via subsidy by the private sector, government). Education’s role in that familiar dynamic must be fundamentally recast, however, for the 21st Century.
At a glance, educating young people for the 20th Century workforce didn’t look much different than what education must accomplish in the new age. For example, all young people preparing for today’s job market know the lately fashionable acronym “STEM,” meaning “science, technology, engineering, and math.” Pointing toward a STEM career means, according to a 2011 Bureau of Labor Statistics essay, preparing for a job that will . . .
“ . . . play an instrumental role in expanding scientific frontiers, developing new products, and generating technological progress. These occupations are concentrated in cutting-edge industries such as computer systems design, scientific research and development, and high-tech manufacturing industries. Although educational requirements vary, most of these occupations require a bachelor’s degree or higher. Accordingly, STEM occupations are high-paying occupations, with most having mean wages significantly above the U.S. average.”
That BLS quote is entirely true this afternoon, and was entirely true decades ago (many decades ago, if you eliminate reference to computers). College graduates now in their 70s and older understood, back in their own school days, a marketplace distinction between a degree in “hard science” and a degree in “soft studies.” If you possessed the inclination and grit and aptitude to follow the former path, toward being not a poet but a lab rat, you were more likely to be rewarded with “job security” and a larger paycheck. So that part of the new acronym isn’t really news. In 1940 parents would rather foresee their sons (and now, increasingly, daughters) as engineers or scientists or medical doctors than as shoe salespersons or postal workers or even “schoolteachers.” That is not to demean the other occupations. Parental preference for a hard-science education over an arts or literature degree, and certainly over jobs requiring only a high-school degree, did not derive from a love of calculus or biology. It came straight from the near-universal desire to see one’s offspring thrive and lead a prosperous life. The hard sciences were never a poor path to that result, especially in a parent’s mind’s-eye. An engineer or a researcher or an M.D. with a bent for the arts could always, after all, afford a grand piano and season tickets to the opera.
What has changed about that dynamic, and continues to change at an increasing pace, is basically threefold and could be summarized as “it’s more truer than ever.” First, more and more jobs—not merely those in the “STEM career” path—require a certain level of math and science literacy, and almost any career requires or is at least enhanced by advanced computer literacy. Second, as countless studies and simple observation reveal, a larger and larger percentage of available jobs will require bachelor’s and advanced degrees in math and science and engineering. Third, whether you are a Ph.D. doing pure research, or a community college night student making car components by day in a Midwest factory, your job will require appropriate continuing education as surely as do surgeons and psychologists. Keeping one’s skills in sync with evolving technology means shooting at not just a moving target but an accelerating target. Profound changes in the workplace will become more profound. The need for parallel changes in how we prepare workers to be employable is obvious.
The workplace is market-driven. Competition creates profound change without new government policies, without any prompting from outsiders. Any new manufacturing technology or more efficient process becomes a prerequisite for survival. Large workplaces that don’t heed free-market cues to change will go under—or send their CEOs to Washington, hat in hand, to seek rescue via unorthodox, taxpayer-funded bankruptcy. Industries that can infect an entire economy just by sneezing might find relief that way (though their secured creditors will not). But even in the case of GM and Chrysler’s bailout, the result was massive change. GM, in fact, became almost unrecognizable. No such change is yet visible across an educational system that needs three new R’s: reform, refocusing, and response.
I am not here to suggest how our K-12 schools can best be reformed to produce students who are better readers, better at math, more devoted to scientific method, and more literate in those cultural enrichments mentioned at the outset of this chapter . . . to say nothing of making a better impression at job interviews. The experts will need to find answers within a daunting environment that includes new family dynamics, social change, instant and omnipresent communications media, and budget constraints. Such answers, however, must be found. We are the world’s greatest nation and yet we have communities in which most kids do not graduate from high school, and many of those who do graduate lack credible readiness for further education. Schools in almost every district have become engaged in a running battle with a standardized testing system that may or may not be adding value to the educational process. The American public school system, including its urban schools, once could claim a gold medal for democratic excellence. Today, among parents, some of the loudest educational buzz is about “charter” schools as a means to avoiding these same public schools. Too many schools are failing both as educational institutions and as centers of socialization and security. It will take some of the best minds of this generation, fully dedicated to the problem, to find solutions and instill public confidence.
Meanwhile, every graduation day, for better or worse, millions of our offspring take one more step—we hope—toward entering a fundamentally changed, and changing, workforce. In that regard I am here to suggest that our schools, however they attack their demons from the bottom up, must pay more attention to the workplace. It’s true that schools are tasked with preparing students for a life, not just a work life. I remain fervently in favor of providing that guided tour of the arts for everyone, and I do not believe eighth-graders need to be or should be deciding whether they will become surgeons or teachers or ironworkers. But precious few students will find life rewarding without ability to compete—first for a job and then within a workplace culture, or as an entrepreneur. Jobs that require only a high-school education while offering new employees a career that will support a family are virtually extinct. A good salesperson can always make a good living, of course—sometimes a very good living. But any young person with that in mind should interview a few sales managers and find out how many newbies must be hired and fired before a single success story is written. There is no avoiding the fact that every 21st Century K-12 student needs to be exposed to all the “STEM” courses he or she is capable of completing successfully.
Exceptions to the STEM advantage tend to be entrepreneurial, unless you are that 1-in-20 salesman or that 1-in-20,000 athlete. Some exceptions are, of course, as enormous as it can get. Bill Gates is often, and accurately, described as the world’s richest college dropout. Gates is not the only entrepreneur who became wealthy without a college degree. Almost every town in America includes high-school dropouts on its roster of serious entrepreneurial success stories. Behind every statistic, including the BLS numbers regarding the workforce outlook for those trained in science and technology, lurks someone who has shattered that statistic’s expectations. Unfortunately, the someone who did the shattering did it on his or her behalf alone, not for others in the statistical group. Outliers—positive or negative, admirable or to be scorned or mourned—are mere blips in the statistics. Many people live to defy the life insurance industry’s actuarial tables, but the tables nonetheless are bankable. Do not quarrel with numbers that say the more science and technology you have in your educational resumè, the better off you will be in the job market. The numbers are indisputable even if you know someone with a Ph.D. in physics who is living in his parents’ basement and working as a night-shift manager in the fast-food sector.
There you have a few words about the first two 21st Century “R’s” in our education dilemma, one bearishly difficult and one incredibly obvious. The first, a bearishly difficult question about reform (which of course I leave to the experts to answer), is: What must our educational establishment do to confront an era in which external social factors have helped diminish the quality of our K-12 output, even as career paths are demanding better-prepared high-school graduates? The second, incredibly obvious puzzle piece is this refocus: No offense to the “soft” or liberal-arts faculty and curriculum, but what today’s students will most need as adults is every successful hour of science and technological education they and the system can handle. With a little will to act, this second element is simple (in concept, a least), nothing more than a bit of a shift in emphasis, and an intense effort to make science and technology education absolutely as inclusive as possible. Through his or her K-12 studies, no capable student should be allowed to make a soft landing away from fundamental science studies. It’s as obvious as the statistics about STEM graduates. It becomes much more obvious if one simply looks around to see a citizenry that is literally plugged into technology most of their waking hours.
That leaves a third “R”—response. This element is all about change, and relates to education as FedEx and UPS relate to the Pony Express. “Exponential change” has been a popular phrase for a generation or two. In the scientific sense of the word, exponential change means change of a magnitude equal to a mathematical exponent, those superscript numbers in an equation. In other words, a particular exponential change would upset the proverbial apple cart to the second or third or fourth or 50th power—or as is also popularly, and without specificity, used in daily conversation, “to the nth degree.” Despite all the common usage of such phrases, and despite my talk about fundamental change, it is important here to note that for the most part I am not talking about the need for our educational system to deal with “exponential change.” If the exponent were merely modestly large and quick, it would be an impossible task. We haven’t reached that point, at least not yet.
Technology does advance with remarkable speed, sometimes with breathtaking speed, occasionally with stunning speed. We have come to expect that technology will make fundamental changes in world within a single lifetime. But we do not wake up on Monday and find the printing press invented, wake up on Tuesday to discovery of the microprocessor, arise on Wednesday to find the first personal computer being marketed, greet Thursday with our first peek at the internet, and end the week attending a dedication for the first advanced manufacturing plant that does not employ a single human being, not even a security guard. Calculate an exponent spanning each of those morning surprises, if you wish. But console yourself, as an education reform planner, in knowing that a 21st Century education system must move merely very, very fast . . . not impossibly fast.
It’s also important to note that despite my interest as a citizen in K-12 education, this little book is essentially about how, as the politicians always (meaning something that never changes, exponentially or otherwise) say, getting the country moving again. That means growing the economy, in a free-market setting, so as to create a larger pie and thus benefit everyone who participates in the process. And although better grade-school outcomes and better high-school outcomes absolutely will help in that effort, it is at the college and university levels where the fastest, most direct connection occurs. That is the only connectivity level with which I have had direct experience as a technology manager and entrepreneur. It is the only connectivity level where education can seek to move if not as rapidly as technology moves, then at least rapidly enough to nurture a competitive workforce and continue to produce a domestic “technology supply” that has fast become the world’s most valuable raw material.
In other words, when our colleges and universities offer curricula that turn on a dime to support the changing technological savvy required of world-class manufacturing employees, then our manufacturers will know their workforce can compete globally for the long term. And if our colleges and universities continue to produce graduates who create world-class technology, either in academic research or in the private sector . . . then our great holistic economic engine, if allowed to run at full speed, will remain unchallenged as the world’s foremost sustainable generator of per-capita prosperity. World-class research and scientific education have been our strong suit for a very long time, and remain ours to sustain or lose. The quick-turnaround “continuing education” of the workforce, top to bottom, is the new, 21st Century imperative.
Just-in-time manufacturing came on the scene as a managerial strategy that increased efficiency, reduced inventories, aided quality control, reduced costs, and enhanced profits. It is tempting, and I think valid in a certain oxymoronic sense, to think here of “just-in-time technological education” for the manufacturing sector. Similar to a new part being manufactured just in time to keep an assembly line moving efficiently, a college can create a new training class—whether an actual, semester-long course with hourly credits, or simply a seminar unique to a particular company—that will bring workers up to speed on a brand-new piece of technology. Unlike just-in-time manufacturing, however, it’s not a matter of delaying the process until the last effective moment; “just-in-time education” is about providing knowledge at the first practical moment in the face of rapidly advancing technology. In either case, something happens just in time. With parts and inventory it’s a matter of being just in time, on the back side, for efficiency and profit. In the educational arena it’s a matter of being just in time, on the front side, for survival. A workforce that falls behind the educational curve is a workforce that might soon be without a workplace because others are moving quicker to integrate new technology. It can happen not just to one plant, but to an entire market sector.
When I created JP Industries in 198X I walked straight into the world of acquiring manufacturing companies that could and should be doing better, improving their operations, and integrating each new unit as a synergistic piece of the larger corporate entity. This is equity capitalism. I did not invent the process, but I was an early student of the process and soon thereafter a practitioner. Contrary to equity capital’s poor image in some quarters as a mere “bleeder” of companies that otherwise would have thrived, most such acquisitions—and every acquisition I was involved with—pursue the long-term best business plan and operational strategy for any acquired unit. A hypothetical 200-employee company that survives and thrives for the foreseeable future as a 150-person company, for example, has emerged in a better position than an obsolescent 200-employee company that clunks along for a year or two or three, then goes out of business. The numbers are different with every acquisition, and the possible parameters are infinite. But that is the model I followed throughout my entrepreneurial career.
Some acquisitions are more successful than others. Usually there is a near-instant reduction in payroll. One could say “of course” that’s true, because in most cases the plant was for sale because it was bloated or otherwise inefficient. Often the owner could not solve its problems and did not see a good future for it. In some cases lost jobs eventually returned in part or in whole as efficiencies and new technology were implemented. This entire era of American manufacturing, don’t forget, did not occur in the same environment as, say, the Eisenhower era. In the middle of the 20th Century many undeveloped nations would have been hard-pressed to produce even those aforementioned cocktail-stirring umbrellas. Most of Europe’s great factories had been bombed into rubble. Japan was just beginning to reinvent its manufacturing base. The cargo container had not been invented. It was assumed that except for specialty items and products we did not wish to make, we owned the manufacturing trading lanes, and that most of what arrived here from the Orient was junk. You know how that story turned out.
Within a few decades, manufactured goods and components of every stripe, from cars to TV sets, were flowing in this direction. Small and medium-sized companies across the heartland could no longer coast along with marginal efficiency, barely caring about new technology, and sending the sales force out twice a year for a seasonal handshake. Many, however, remained stuck in the old culture. That was the operational environment in which equity capitalists came on the scene to triage underperforming companies, creating a healthy new life for many, almost always with a regimen that included dead-weight loss. It is fair to say that my company and others were not always the most popular arrivals in town. It is also fair to say that an underperforming and troubled company’s prospects are seldom a secret, so our arrival was welcomed, though rarely cheered, more often than you might think. At any rate, JPI never overleveraged a deal, and never bought a company for no reason but to sell its component parts for a quick profit. I selected underperforming companies which, if brought up to their potential for efficiency and quality, could contribute to our corporation and stay around for a long time. That was not merely an honorable way of doing business; it was vital to the economy—and will remain so.
One such acquisition was a small manufacturing operation in Grand Haven, Michigan, where about XXX employees made automotive camshafts. That product was a good fit for JPI. It came as no surprise to anyone when one of our first actions was to lay off perhaps 15 percent of the workforce, the first step toward bringing the operation into a reasonable state of competitive efficiency. Soon thereafter we saw a way the plant could produce better, more competitive, more profitable camshafts by transferring newer technology to the operation. The technology was already in use by a JPI unit in Germany. Some of our German employees flew to the shores of Lake Michigan and led any necessary retraining of our Grand Haven technicians and machinists. The new technology brought in more orders—meaning a workforce that previously had to be shrunk for efficiency’s sake was hiring new employees because of technological efficiencies.
At another plant, in western Iowa, workers began feeling out the new ownership—us—to see what they could do to improve their own prosperity. Some of their proposals, particularly on benefits that these days are called “legacy issues,” simply would not work within the plant’s bottom line. Recent, and ongoing, debacles involving both government and private-sector legacy costs show what can happen when, at midday, you promise the moon. When JPI explained that to the Iowa workers, some of them raised the idea of profit-sharing. I suggested that could be a fine idea, as long as productivity remained high and as long as there were profits to share. We moved toward a plan that seemed like a win-win situation until we hit a surprise stumbling block. It became clear that many employees, perhaps most, had no idea how to read a balance sheet. Some could not differentiate revenue from profit. What to do? A call from JPI to the local community college resulted in creation of a brief “course,” just for us, on how to read financial statements. Suddenly the workers had a profit-sharing program, understood it, knew how to communicate about it, and in most cases developed a heightened interest in creating a profit . . . for them and for JPI.
That is not an example of just-in-time technological training, but it certainly was just in time to rescue a win-win personnel situation that was going bad for no good reason. The nature of JPI’s integrated auto-parts business plan meant that much technology-specific continuing education could be done in-house, the way our German unit worked with staff in Grand Haven. Community colleges, however, offer excellent accessibility for manufacturers with plants scattered about the country, often in small cities and even semi-rural areas. The junior colleges are not only geographically accessible, relatively affordable, with minimal bureaucracy and strong ties to . . . well, they aren’t called community colleges for nothing.
As competitors for tuition dollars, two-year schools generally are delighted to develop synergy with local employers. As grassroots educators, most are willing to develop new programs specifically designed for a new business in town, or for an old business with new technology issues. At JPI, though we took care of our own group training for new processes or machinery, we paid employees’ tuition for any college-based training that related to the workplace, be it in engineering or accounting or management. And we paid any vocational training tuition for laid-off workers during their first year of a job search.
Community colleges are not America’s sexiest post-secondary educational institutions. But they are vital, and they should become more vital. I have been out of touch with that scene for two decades, but I know four-year institutions have begun to partner with two-year schools to build networks stressing preparation for the regional workplace—nursing, for example, where health-care is a major employer. Small manufacturing operations looking for a new plant location put that kind of educational access on a short list of site priorities. Response among the more nimble two-year schools is already happening. We need more of that, with access to quickly custom-made science and technology curricula. And we need the paradigm to trickle upward to four-year colleges and universities in every way that more advanced rapid response education to technological advances can be enhanced. Not an original idea. It is happening. It needs to be intensified. The public needs to be aware of this synergy, needs to know the stakes involved. Good things happen when good ideas have broad support.
The above are simple examples of an American education system responding to specific job-training needs down at the retail level, where the “just-in-time” concept can work efficiently. It’s a template that also can be viewed from within the philosophy of continuous change—which clearly is a fact as much as it is a way of thinking. The institutions that fail and crumble sooner rather than later, whether taken in the broadest historical scope or within the much shorter timeline of an era, are the institutions that insist on static goals, insist on static ways of reaching goals, insist on fealty to “grandpa’s idea.”
Pretend for a moment that the greatest influence on contemporary life, technology, is a static thing. Technology is the least unchanging thing imaginable, but try to imagine it anyway. Even lacking new ways of designing things, making things, marketing things and using things, one hopes change in the form of “social progress” would occur. We saw a great deal of that, for example, between the invention of the wheel and the invention of the steam engine. I am one who raises both eyebrows at some “legislation” that emanates from our court system. Yet it is also inarguably true that the only way our great Constitution has worked, and can continue to work, is via a certain amount of flexible interpretation. Our national touchstone cannot be static. Let us not forget that the founders themselves waited just two years before massively editing the Constitution with the Bill of Rights . . . but the Boston Red Sox won the World Series four times (and even the Chicago Cubs won it twice) before American women were allowed to vote. The spirit of the founders’ Constitution, its grand sweep wrapping federalism and unprecedented individual rights into the same system of government, is indeed indelible. It was the founders’ own genius that has prevented the document from falling into a landfill with other lifeless documents.
Channeling continuous change toward positive and productive ends is an excellent definition of progress, one that good business managers understand and call “continuous improvement.” I once adapted the idea to a little book for my own employees entitled Better Makes Us Best. Research showed, by the way, that lower-level workers were most likely to have read the book. For sure, any institution that seeks to thrive and grow must steer itself across the seas of change rather than try to build a dike and hide, unaffected by such a powerful force. That includes our largest and greatest institutions of learning, which to my observation are doing quite a decent job of continuous improvement.
Reference: Book “The Technology Imperative: What Jobs! Jobs! Jobs! Really Means in the 21st Century”, www.GavdosPress.com, September 2012.