Dead-End Job or a Stepping Stone?

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You
may be asking yourself this question. If you aren’t, then your son
or son-in-law may be.

I
argue that no job is a dead end job. There are dead-end employees.
A dead-end job is there to provide a stepping stone for upward-bound
employees and also downward bound employees.

Most
greeters at Wal-Mart are older. For them, the job is a dead-end
job because they are probably retired. They need extra money. They
are dead-end employees. They know this. So does the general manager
who hired them. I do not see people in their twenties working as
Wal-Mart greeters. The younger ones are on the floor, stacking things
on shelves, and helping customers to locate the correct aisles.
They may also be on the check-out registers, which used to be called
cash registers back when people bought things for cash.

Some
people are content with their dead-end jobs. They have reached what
Lawrence J. Peter called their level of incompetence. They will
not be promoted again. Or maybe they are at their level of maximum
competence, recognize this, and are not willing to take a promotion.

Because
consumers are fickle and always looking for bargains, they change
their buying patterns. They shop. This puts pressure on companies
to keep ahead of consumer demand, but not too far ahead. Companies
are not guaranteed income. So, they don’t offer lifetime employment.
They are ready to fire employees, or shut down plants, or eliminate
entire layers of middle management. The consumers demand this by
their decisions to buy and not buy.

The
question you had better answer is this: Is my job a dead-end job?

If
it is, then the next question is vital: Should I seek a better job?
If the answer is yes, this raises a third question:

Should
I move up or out?

A
REAL-WORLD DECISION

Recently,
I spoke with a man in his late twenties. He has a bachelor’s degree
in computer science, which is not marketable in the way it was before
the dot-com collapse in March of 2000. He received his degree in
December, 1999. Not good timing!

He
is working as a one-man computer team for a small company in the
insurance field. It provides underwriting services. It deals with
retail sellers. It has 35 employees. The company had a policy of
not spending money to update its computer system. It got caught
by a programmer who made the company’s software dependent on him
— a common practice of programmers. The company is paying the
new man to cut the umbilical cord to the old system, but without
spending much money.

The
company’s retail clients keep asking for upgraded services, which
means upgraded software. The company refuses, claiming that it has
no money to upgrade. The new program it’s using to replace the older
one is less effective than the old one, the man says. But the company
will not have to pay the original programmer the extra money he
was demanding.

From
what I can see, it’s a dead-end job. The company itself has some
standard marks of looming extinction:

  1. Low capital
    spending
  2. Stagnant
    or shrinking employee base
  3. Fails to
    respond to clients
  4. Depends
    on one man for its software/hardware operation
  5. Pays him
    a minimal salary

The
young man has concluded the same thing.

BREAKING
AWAY

His
problem is that he needs his entry-level salary. He was out of work
for six months in a new city. He lived frugally on his savings.
He wants to replenish his savings. This is the correct attitude.

He
had worked as a computer repairman before. He was sent out to fix
messed-up systems. He grew tired of dealing with people whose computers
don’t perform as they expected. Computers are quirky. They stop
working for reasons unknown. They are not miracle machines. He found
that the users blamed him for the failures of their old systems,
their own ignorance, and the complexity of previous undocumented
software.

The
widespread problem most middle-sized companies face, he says, is
this: proprietary software is unique. Companies can’t locate outsiders
who understand their in-house system’s problems. There is too much
variation.

So,
they become dependent on in-house programmers. Then these programmers
demand raises or else quit. They have the companies over the barrel.
Escape is not easy.

So,
the young man wants to break away from his mid-sized company. At
the same time, hundreds of local mid-sized companies may want to
break away from 100% dependence on an in-house programmer. Is there
an opportunity here?

A
SOLUTION AT A PRICE

I
tried to give the young man advice on how to set up his own company.
What mid-sized companies and some small companies need is a preventive
maintenance program that is provided by an outside firm of computer
geeks. The geeks’ provide preliminary information about looming
problems. If they can analyze what’s wrong, they can recommend high-price
specialists to come in on a part-time basis to fix the problem.
For this, a company pays the geeks a monthly retainer fee of $500
to $1,000. A computer analyst comes in once a month for half a day
to check things out, get rid of viruses, worms, etc., and give a
warning of trouble brewing. But such geek service companies don’t
seem to exist. Is this an opportunity? Or is there some fundamental
barrier to entry?

The
young man told me this:

"A
company can buy a server for under $1,000. But they don’t. It’s
too risky. If the server goes down, the company may go down. So,
they buy redundancy: levels of back-up. They spend $10,000, not
$1,000. But then they become dependent on one in-house technician
to run the system. It’s crazy."

I
told him that with this explanation, he had the makings of a direct-mail
ad. He should tell this story of reduced-risk back-up for hardware
but no back-up for technicians to run this hardware.

Computerized
companies face a real-world problem. Anyone who has experienced
a computer snafu knows. On Christmas weekend, Comair, a subsidiary
of Delta Airlines, had its computer go down. Over 30,000 passengers
were stranded. The disaster became the main weekend news story on
the networks — the worst advertising possible. Delta was already
in financial trouble. This will make things worse.

Delta
is big. The industry is dependent on computers. But to the extent
that a company is dependent on computers, it ought to spend money
to buy back-up. This includes back-up programmers. The more proprietary
the software, the more a firm needs back-up programmers who understand
the system’s code.

As
corporate loyalty has declined, companies have become more dependent
on machines and technicians to run them. A programmer can quit for
better pay. What happens to the company in the interim? It may take
a new programmer six months to become familiar with even the basics
of the system.

I
told the young man that a good ad might convince 20 companies to
pay him $500 to $1,000 a month to serve as an early warning system.
The problem is, he says, the enormous diversity of the proprietary
systems. One service company can’t supply the repairs.

What
is needed, I said, is an intermediary service company that can supply
routine procedures for several companies on a monthly basis, with
a list of independent specialists for emergency repairs. The service
company could get a finder’s fee for the specialist’s contract —
say 20%. Maybe only 10%. But something.

PAYING
TO RELIEVE FEAR

Basically,
a service company is like an insurance policy: it is there in a
crisis. Most people won’t pay a service fee for preventive maintenance
in most areas of their lives. It would be too expensive. There are
a few exceptions. Local motor oil-changing companies sell what is
in effect preventive maintenance. Going to the dentist is another.
But how often do we go to a dentist? We usually avoid it until a
tooth starts hurting.

If
a company refuses to hire in-house back-up computer personnel, then
it had better outsource this service. In every area in which a system
failure could bankrupt the company, it had better have fail-safe
procedures, either in-house or outsourced.

Consider
your employer’s vulnerability to a system failure. Does it have
back-up? If it depends for its existence on one person in the IT
department, does it treat that person with deference and money?
It had better do this, because its survival depends on this man.

I,
for one, would want a back-up person who knows the entire system.
This subordinate must be paid well, just as a company pays lots
of extra money for hardware back-up — or had better.

You
may think that you are immune from such failures. You may have great
faith that your boss has considered all this and has taken steps
to protect the company and therefore your job. But unless you verify
this for yourself, you are staking your financial future on faith,
which is defined in the New Testament as "the substance of
things hoped for, the evidence of things unseen" (Hebrews 11:1).
I recommend against exercising this much faith. A few discreet inquiries
as to the state of the company’s back-up systems is in order.

If
your employer is cutting costs by refusing to insure against a major
breakdown, then he is rolling the dice. As your employer, he is
rolling your dice, too. To the extent that your lifestyle is dependent
on your job, your employer’s decision to be penny-wise is pound-foolish.

The
refusal of top management to spend money systematically to upgrade
technology, which includes the technical staff to maintain the technology,
is an indicator of short-term thinking. It’s management on a wing
and a prayer. It is indicative of a deeper problem: the failure
to develop a long-term marketing strategy.

The
young man I counselled is working for a company that displays this
weakness. In my view, he would be unwise to consider this company
as anything more than a port in a storm. But if that’s true for
its employees, it’s equally true of its clients. The clients should
start looking for alternative suppliers of the service.

That’s
why you need to investigate the condition of your employer. If things
are excessively uncertain for the employees, the same is true for
the clients. If the clients depart for greener pastures, you will
be forced to do the same.

That’s
why it’s important for you to find out the condition of your company.
It’s self-interested behavior to investigate the degree of risk
that your employer is willing to take, because he is accepting this
degree of risk on your behalf. If you are a crewman on a ship, you
had better be ready to jump ship if the crucial systems don’t have
back-up.

THE
STORY OF DAN ROGERS

I
heard about Dan Rogers when I read Blind
Man’s Bluff
(1999), a history of the use of America’s nuclear
submarines in Cold War espionage. The book includes a chapter on
the sinking of the Scorpion in 1968, one of the two worst disasters
in American submarine history.

Dan
Rogers was an electrical technician’s mate on the Scorpion. He began
to have doubts about its safety. He resigned his post in late 1967.
He saw his shipmates off at Norfolk, on Feb. 15, 1968. They never
returned.

In
a 1999 Nova show on PBS, they
interviewed Rogers. This interview stands as a warning against exercising
excessive faith in the decisions of senior management.

In
1993, the Navy finally offered a theory of a defective torpedo,
activated on board, which was then released from the ship, followed
it, and sank it. Doubts about this theory were raised almost from
the day the official report was issued.

NARRATOR:
Dan Rogers doesn’t believe the torpedo story either. He transferred
off Scorpion just before her final voyage because he believed
inadequate maintenance made the submarine unsafe.

ROGERS:
I really didn’t want to be there. I was really that concerned
about the condition of that boat, especially the material condition
of the boat.

NARRATOR:
Eventually, Rogers shared his doubts with Steve Johnson, an investigative
reporter for the Houston Chronicle. Johnson found letters from
other crew members that showed they too were concerned about the
mechanical condition of the sub. He tracked down Ross Saxon, whose
doubts about the torpedo theory encouraged him to keep digging.
Then, after years of effort, he unearthed a critical piece of
Scorpion’s past.

JOHNSON:
I obtained several thousand pages related to the Scorpion’s maintenance
history from the Atlantic submarine fleet. I’d sent out a half
a dozen requests under the Freedom of Information Act, and it
just so happens they found these documents that they thought had
been destroyed, buried amid thousands of pages, and it was the
day-by-day history of how the Scorpion was selected in a secret
program that drastically reduced the maintenance that it would
have ordinarily received.

NARRATOR:
To save time, the Navy had cut back on Scorpion’s last overhaul.
Scorpion was in the shipyard eight months, though an average overhaul
took twenty-four. They spent just $3 million, a fraction of the
norm.

Rogers
had placed his career in jeopardy by requesting a transfer from
the Scorpion. He was publicly breaking with the senior officers
and Navy brass about the safety of this high-tech showcase. Who
was he to make such a judgment? Answer: the lone survivor.

He
won no praise after the disaster. The Navy did not come to him to
get his opinions on the safety of the ship. Instead, the Navy covered
up the story for a quarter century, then released a misleading report
about the cause.

But
he survived.

CONCLUSION

If
you are in a dead-end job in a competitive company, you may not
care. It may fit your career objectives. But if you are in a dead-end
job in a dead-end company, you had better start looking for an exit
strategy.

December
29, 2004

Gary
North [send him mail] is the
author of Mises
on Money
. Visit http://www.freebooks.com.

Gary
North Archives

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