Looking At The Wrong Skills Gap

The scolding I gave the antagonists last week in their people argument set me to doing a little research in the people area, and every time I look into lean people issues, I come back to the subject of the worker ‘Skills Gap’ .  The basis for the President’s "American Competitive Initiative’ laid out in the last State of the Union Address was a study conducted by the National Association of Manufacturers and Deloitte, published in the 2005 Skills Gap Report.  8,000 or so CEO’s, COO’s, Presidents and HR executives were polled. My gut reaction is to tell you that the survey and the report are a load of self-serving crap that says more about the caliber of the execs than the workers – but to use such phraseology would be a violation of my Lenten resolution to be more positive.  Instead, let’s just say that the report seems to have been built around some flawed assumptions, leading to a, perhaps, erroneous interpretation of the data.

When asked "Given changes in the economy and business environment, which of the following will be most important to your company’s future business success over the next three years?" The most popular response was "High Performance Workforce", racking up a 74%. Increased Customer Service Orientation came in at number four, garnering a paltry 20%.  (They are a little muddy about how the numbers indicating the responses to a question calling for one answer can add up to 253%, so maybe there is a math skills deficiency lesson to be learned from the report.)

Coming in at numbers 2 and 3 were "New Product Innovation" (49%) and "Low Cost Producer Status" (45%) – both more than twice as important to success than customer service, according to the august group of responders.

After acknowledging that 72% of them provide no training at all to at least a third of their workers every year, the survey goes on to trash the education system, then winds up at the ‘what to do about it’ section. The solution the execs really like is fairly predictable. 61% of them think the government should give them a tax break to train their employees.  43% of them don’t want to mess around with complicated tax breaks – they just want the government to give them the cash right up front for training.

So let’s review: The boys in the boardroom think that labor is all that matters for them to compete – four times more important than taking care of customers.  They invest little or nothing in employee development. And they think their problems are the school system’s fault and the government’s responsibility to fix. I think that pretty well sums it up.

There is a serious skills gap, but they are asking the wrong questions.  These 8,000 leaders should have been asked about manufacturing management – lean manufacturing management, to be specific.  The senior HR people should have been asked to explain in detail how Toyota provides stable employment and exactly why their company cannot do the same.  They should also have been asked the size of the gap between Toyota’s training effort per employee and theirs, and to explain the gap.  When they finished blubbering about a lot of cultural claptrap, the bottom line would be that HR managers, almost across the board, have no idea what lean is or how to answer those questions. Human Resources professionals are probably the furthest behind the lean curve than anyone else in manufacturing.

Perhaps the Finance types among them should have been asked to explain lean accounting and provide the concrete, logical reasons why their company does not have a lean accounting system.  In fact, they know next to nothing about lean accounting, have made no effort to find out, and would likely rationalize their woeful ignorance with blathering excuses about Sarbanes-Oxley.  However, ask them what their stock price was an hour ago, or to explain the concept of derivatives, or the recent SEC regulations concerning executive stock options and they will wax eloquently for hours.

Poll the CEO’s, COO’s and Presidents on lean manufacturing knowledge in any detail – it doesn’t matter what aspect, just get them to go beyond broad theory from Womack’s books – and ask them to explain specifically why those principles have not been applied in their organizations.  They can’t do it because they have either delegated lean to some low level staff guy, or ignored it entirely.

There is a skills gap. all right, but it is sharper and more devastating in the executive office suite than on the factory floor,  While the elementary schools can certainly do a better job with math, the business schools are even worse.  Mark Edmondson at Lean Affiliates talks to a lot of senior executives in the course of his day, and he is continually dismayed at how often he runs into senior people that put him off as soon as the conversation turns to lean.  Far too often, he is given the name of some staffer and told, "Talk to him – he handles all of our lean stuff."

It is mystifying to me how keeping up with the state of the art is so unimportant to a group of very intelligent, very well compensated people.  I know of no other field of endeavor in which this is true.  The idea that they know it all once they move into the big office seems to be pervasive, however.  These executives are often the same ones that have a secretary to type their letters because they do not know how to use Word, and call in IT people to create simple reports because they have no idea how Excel or Access work. Someone has to set up their email for them in the simplest, one button fashion because they know nothing more complicated than the AOL account they use at home.  The feeling seem to be that anything they did not learn before they became executives is unimportant. We should all be thankful that doctors and nurses, scientists and engineers, military personnel and firefighters, and scads of other folks who typically make less than the execs do not have such a cavalier disregard for lifelong learning.

The President fell for the NAM -Deloitte study hook, line and sinker. He should have commissioned a management skills gap study.  Then he should have taken the NAM folks who offered up a document saying that customer service and employee development were unimportant to these companies (unless the government paid for it) by the scruff of the neck and tossed them out onto the White House lawn.