Thursday, May 16, 2013


We blame the Islamic Arab world – and in particular the Kingdom of Saudi Arabia – for denying a good part of its population, the women, an equal role in building the future of their countries and we wonder how in this day and age a nation can prosper if it leaves a large percentage of its population on the sideline.
The answer is more likely than not that it cannot prosper under those conditions. It can stay afloat for a while, particularly if the nation is a hydrocarbon rich country that can generate wealth by exploiting its natural resources. But it is unlikely that it can reach its full potential if not the whole population is engaged in the nations building process.

In the USA we don’t have that problem. Or do we?

Warren Buffett just recently made a case* for women to shatter what- he believes- are mostly self-imposed limitations on themselves. He blames these limitations on lingering after effects of centuries of institutional inequality between men and women. There is more than symbolism in the fact that our Declaration of Independence declares “all men are created equal”.

Warren Buffet writes: “The closer that America comes to fully employing the talents of its citizens, the greater its output of goods and services will be.”

Arguably, the contribution of women in our society can be enhanced by removing any and all remaining vestiges of a time we should finally leave behind. This is particularly the case with women’s opportunities at the top levels of business and government, where women remain significantly underrepresented in spite of great progress over the last decades. But there is a whole other segment of our population that we should focus on if we believe that “running on all cylinders” is a prerequisite for success in the race to the top of nations. And this segment is by and large equally divided between men and women.

First of all, we need to realize that nobody counts the number of people employed in the USA. The Federal government through the Department of Labor makes an effort (not very successful) to measure the unemployment rate, but what would be really interesting to know is the number of people who are employed (and by deduction, the number of people who are left out of the labor process).
Isn’t it somewhat befuddling that our government cannot tell us what percentage of the population is engaged in the labor process? And, therewith, the percentage of the population that is not?

The Bureau of Labor Statistics measures a metric that it calls the “Labor Participation Rate”, which stood in April of 2013 at 63.3%. This statistic measures the number of people in the labor force that is either working or actively looking for a job as a percentage of the civilian population aged 16 and older.
It also measures a metric that it calls the “Employment-Population Ratio”, which stood in April of 2013 at 58.6%. This statistic measures the proportion of the civilian noninstitutional population aged 16 years and over that is employed. It includes people who are under-employed in terms of the time they get paid for or in terms of the level of work they are asked to perform.

Thus it appears that also in our country close to half of the population is left out of the labor process. Some percentage of this “unengaged” population is either below working age, retired with no intent to get re-engaged or studying full time.
The bottom-line is that the Federal Government cannot tell us with any degree of precision what percentage of the work-eligible and work-capable population is actually disengaged from the labor process and thus not participating in the growth of our economy and the strengthening of our nation. But we can come at it from another angle:

We know from the Census that the USA has a population of about 314 million, that about 74 million are below age 18 and about 42 million are over the age of 65. Since some unknown percentage of these age-groups are employed (let’s assume 10% of this populus), it follows that our labor pool would be approximately 210 million.
We know that in April of 2013 we had
·         11.7 million unemployed
·         14 million on disability (a staggering number!)
·         2.3 million in prison (a staggering number!)
·         7.6 million involuntary Part Time
·         2.3 million marginally attached

These 5 categories add up to 37.9 million people in the USA that would theoretically qualify for the workforce but are either unemployed or underemployed. That represents 18% of the labor pool. Arguably, this number is a more accurate measurement of disengagement of the labor process than the unemployment rate of 7.5%.

Warren Buffet, in his interview in Fortune, states: “No manager operates his or her plants at 80% efficiency when steps could be taken that would increase output”. We point the finger at the Islamic Arab world for running their nations at 50% efficiency by denying women the right to participate. But we should not be blind to the fact that we run America at much less than 100% of its horse-power.

If America wants to stay on top in the race of nations, it will have to find a way to run on all cylinders and get a much larger part of the labor pool, men and women, engaged in supporting its economic growth and development.

*In the May 20 issue of Fortune

Thursday, May 2, 2013


Leadership is hardly a topic to be dealt with in a column for a blog or a magazine, because it has so many aspects, but it is too important to success in business to ignore it. It is also a near inexhaustible theme for writing, because the world offers so many examples of leadership that are worth studying, because they are inspirational and worth following.

In all of my attentiveness to samples of leadership that I have seen, heard or read about, one stands out as a model that is near impossible to replicate. Like a world record that may never be broken or Cal Ripken’s string of 2,632 consecutive baseball games played. Part of the improbability of surpassing my top pick of leadership lies in the fact that it happened almost a century ago and at the other end of the world. The principles of leadership, though, are unaffected by time and location and the model could be replicated given the same degree of determination, discipline and persistence exhibited by Ernest Shackleton in his ill-fated Antarctic expedition in 1914-1916.

The story of Sir Ernest Shackleton’s expedition on board the Endurance is too long and nuanced to be repeated here, but is worth reading. The authoritative book on the expedition, with exceptional pictures taken by Frank Hurley – one of the crew members – is written by Caroline Alexander under the title “The Endurance” and was published in 1999 by Knopf.

The reason why it should be studied by believers in the value of leadership is because it exemplifies leadership of the highest purity of purpose: When the expedition vessel Endurance got trapped in pack-ice in the Antarctic summer of 1914 and ultimately broke up nine months later– killing the expedition’s mission – Shackleton shifted his pursuit from being the first person to cross the Antarctic continent on foot to the single purpose of bringing every member of his 27 crew home to safety. He must have known that this was an odds-defying feat, if he could pull it off.

Having lost, with his ship, his shelter and most of his stores he had to improvise every move he made on his way to a safe return to civilization, which his team ultimately made in September of 1916. His major challenges were time (more than 2 years of hunger, disease, frostbite and deprivation), distance (thousands of miles of drifting and floating) and weather (two Antarctic winters).

After the break-up of the Endurance and having camped out on drift ice for six months, the crew made it - with two salvaged open life-boats - in 15 days to the uninhabited Elephant Island. It was now April 1916 with another winter approaching. On this barren, desolate island Shackleton left most of his team behind to try to reach in one of the open life boats -with 5 crew members and without proper navigational instruments - the nearest whaling station on South Georgia Island 650 nautical miles away. Risking the good chance of getting lost in the huge expanse of the Antarctic Ocean, which would have doomed every one of the 27 members of the expedition. He got there in 16 days through some of the worst weather and seas imaginable and was able to arrange a vessel to pick up the expedition members who were left behind on Elephant Island. Shackleton himself captained the vessel that picked up the castaways on August 30 of 1916.

The elements of Shackleton’s leadership are unmistakable from just the outline of this story. They come vividly to life if you read the blow by blow account of the expedition as written by Caroline Alexander:
  •          To place the safety of the crew ahead of his personal ambition as an explorer
  •          To acknowledge defeat when the Endurance was lost and timely switch the mission at hand
  •          To never relinquish the responsibility for making the tough decisions
  •          To never ask something from members of his team he was not willing to do himself
  •          To maintain discipline among a team of 27 individuals, each with a different appreciation of the   situation they were in and constantly confronted with life-threatening conditions
  •          To never lose faith and give up on his mission in spite of near insurmountable adversity
  •          To completely succeed in the (revised) mission

What makes this showcase of leadership so exceptional – and most likely not to be surpassed – is that the mission was achieved without any of the comfort and technology available to modern day explorers.

Leadership is of all ages and knows no boundaries. It is a vital component of any human endeavor. You will have difficulty identifying any highly successful business enterprise, where the leadership component was missing.