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Gini Dietrich

Jobs Czar Should Look to Small Business Leaders

By: Gini Dietrich | October 17, 2011 | 
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Did you see Jeffrey Immelt, the chairman of GE, on 60 Minutes last Sunday?

He’s been given the jobs czar title by President Obama, with the sole charge of convincing companies to hire, and Lesley Stahl was there to understand more.

Her big question…whether or not the man who has sent more jobs overseas than any other chief executive has what it takes to create jobs in America.

This is not a political blog post. After all, President Obama is a democrat and Immelt is a republican (who recounts a very funny story about his mom telling him he had to turn down the President because of it).

Nor is it a blog post about whether or not he’s qualified for the job. I think any person who can not only replace the great Jack Welch and continue to build and grow a company deserves the utmost respect.

It is, however, a blog post about the economy, leadership, and being an entrepreneur.

A few weeks ago, we talked about the fact that corporate America is sitting on $2 trillion in cash. Cash they’re afraid to spend because they don’t know what’s going to happen with taxes and because they’re afraid if they hire people to make more widgets, there won’t be anyone to buy them. And then we’re back where we started.

The thing about Immelt being jobs czar is he is likely friends with the executive at the companies that are sitting on that kind of cash (Microsoft, Cisco, and Google, among the top 10). Perhaps he can convince them job creation in America is the way to go. After all, we tend to listen to our friends, do we not?

But about how to invest in our companies? Don’t we know better than anyone?

According to the Wall Street Journal, FMC Corp. (another company in the top 10) has already made the decision to not be financially aggressive going forward.

If that’s the case, what can our new job czar do about that?

You know what I would love to see? I would love for our nation’s politicians to work on Main Street, running our businesses for 90 days. I’d love to see Immelt create a task force of people who can make a difference in Washington worry about cash flow and chasing money and how to make the next payroll. Just for 90 days. But really be involved in all of those decisions.

Then let’s see what changes are made to energize the economy. Because it isn’t up to the top 10 companies sitting on $2 trillion in cash. It isn’t up to Washington or President Obama or Jobs Czar Immelt.

It’s up to us.

This first ran as my weekly column for Crain’s.

About Gini Dietrich


Gini Dietrich is the founder and CEO of Arment Dietrich, a Chicago-based integrated marketing communications firm. She is the lead blogger here at Spin Sucks and is the founder of Spin Sucks Pro. She is the co-author of Marketing in the Round and co-host of Inside PR. Her second book, Spin Sucks, is available now.

31 comments
Leon
Leon

G'Day Gini,

Governments seem to have a blind spot where small- medium business is concerned. I suspect that for all their talk about the importance of small-medium business, they have little understanding.

In Australia, about 45% of all private sector employees work in businesses with 20 employees or less. About 70% work in businesses with less than 200 staff. Only 15% of private sector employees are members of a trade union This figure has fallen from about 70% 30 years ago. Yet Trades Unions are still regarded by governments as representative of all employees.

About 20 years ago, I was flying from Perth to Sydney; about 2000 miles. The airline kindly upgraded me to first class and I found myself sitting next to the Federal Minister whose portfolio included small business. She knew absolutely nothing about small business. She imagined, as is so often the case, that small-medium business was a child or teenage version of big business.

Your point about Main Street is just so relevant. But I believe that neither the politicians or the institutions know..... or care. As Al Ries once pointed out, we shouldn't bother about what Apple does now We should find out what they did when they were working out of a garage and what they did to get out of there.

Much more fun,too

Regards

Leon

hackmanj
hackmanj

Love this, it's so been on my mind lately. I am actually happy to see more people initiating conversations along these lines. It is really important that we start to chip away at this problem. Going to browse the comments a bit and see if I have anything to add.

wabbitoid
wabbitoid

Several small problems I can see as an amateur economist (in case that means anything) but I want to point out one really big problem:

The mythical $2 trillion in cash is what is on deposit in the Federal Reserve - which is to say it is the property of only those big financial institutions with access to the Federal Reserve window. it's not spread out among corporate America by any means - it's in the hands of a relatively small number of rather large companies. They have a habit of not listening to small business owners and frankly don't even speak the same language most of the time.

So while I applaud your efforts to get small business owners to think more positively, there is a problem at the very top of our food chain. It will necessarily take some kind of political organizing to change that no matter what.

glenn_ferrell
glenn_ferrell

I should keep my mouth shut... but...

...on further consideration, I'm going to take my own advice :)

Howie Goldfarb
Howie Goldfarb

Fact 1: every year the Fortune 500 sheds jobs when you figure out the net adds and layoffs.

Fact 2: My opinion bad choice (the guy blew the sub prime which almost sunk GE)

Fact 3: Small businesses every year drive job growth (though sometimes Government too)

The problem I see if the Have's refuse to part with their money, because they like being in the 5% that Have (poverty is at it's highest rate now since the Depression and income inequality the same). They forget unless people have money to buy the stuff that made them the Have's they eventually will either stopped making money or worse have a revolt (which don't be surprised this could happen in the US...everyone owns guns and an idle depressed and possibly oppressed population lacking in opportunity will revolt)

I think the focus should be on small business growth. Removing the red tape and stream line everything from getting funding to hiring etc but not removing things like worker safety or environment regulations (EPA, FDA etc). We have to reform the patent system. And we have to stop spending money on areas that have negative ROI (war on drugs, the ridiculous rate of imprisonment we have, war, big military vs smart military, supporting old industries because they currently employ people like Oil vs supporting new industries of our future) the list is endless.

What I find funny is Obama chose someone who had a hand in our problems. GE is a big military contractor made bank on the wars. GE made bank on sub prime. GE made bank on the deregulation of wall street. GE made bank shipping jobs overseas.

And I personally do not view Jack Welch btw as highly as I did when he retired. Hindsight is 20/20. I could of done better =P

Lisa Gerber
Lisa Gerber

Yes! and I'd love to see more education at the local government level. If we want to foster the Main St economy, the local laws need to do that, and they don't. (from what I see). If this economy has initiated anything positive, it's the reluctant entrepreneur; the ones who lost their jobs and are now pursuing their dreams to start their own businesses.

Yet local ordinances, taxes and parking regulations (for example) make it discouraging for them to set up shop in downtown cores. Local government is so focused on their immediate revenue, they aren't seeing the big picture, and fostering long-term economic development, and downtown revitalization.

TheJackB
TheJackB

The good old Czar had his head handed to him by the Bolsheviks for ignoring the people and one can't help but wonder if this one is going to do anything other than serve as a peacock to strut for the government.

That is my way of saying that I agree with the esteemed senators from France and North Carolina. The government can't force companies to hire but they can do a better job to provide incentives to do so.

It may very well be up to us, but it would be useful for those who want a small business loan to have greater access to them.

EricaAllison
EricaAllison

I agree with @John Falchetto , the government can not and should not force companies to hire. They can encourage better training for not only the workers, but for the many small business owners who have no experience running a business. Lending institutions can tie their loans to courses in business management or adequate training for the tasks at hand that the money is to go for.

You are right. It is up to us. It is up to us to know what we're doing with the money/cash flow we manage to snag and to use it wisely to help not just ourselves, but others thrive in this crazy economy and situation that we're in. I'm sure Immelt didn't get to where he is today without being a sharp guy. But is he the right guy for our situation? Not so sure. Why not have a cross section of industries, jobs and sectors represented as a Jobs Special Forces Unit? Small, med, large corporations (Main Street and off the grid kind of folks) right alongside the big guys; that would make for an interesting discussion. :)

Have fun in Orlando!

E

John Falchetto
John Falchetto

The chairman of GE? One of the worst CEOs in the US, could they have chosen anyone else who is even more removed from entrepreneur's and small business challenges?

He dropped the GE stock by 60% since he took over and is still making 5millions a year. Wrong person for this job.

In any case I don't see how any government can force companies to hire, nor is it advisable.

You are right Gini, it's up to us :)

ginidietrich
ginidietrich moderator

@Leon "We should find out what they did when they were working out of a garage." Yes, yes, yes! It's SO easy for us to look at what is seemingly overnight success and wonder why we can't do that. We forget that was more than 30 years ago.

ginidietrich
ginidietrich moderator

@wabbitoid Sure, you're right. But it's up to ALL of us, not just the five or six companies that are sitting on all that cash. And I'm tired of listening to everyone place blame on things they have no control over...so why not work within what we can control?

glenn_ferrell
glenn_ferrell

@HowieG I completely agree with (what I think) is your main statement:

"I think the focus should be on small business growth. Removing the red tape and stream line everything from getting funding to hiring etc but not removing things like worker safety or environment regulations (EPA, FDA etc)."

I think that's the right focus - define the issue, establish exactly 'what' the amount of financial burden is on small businesses. Decide how much we need to lower that burden and then make the (extremely) tough trade-offs to get down to our target. Focus on the problem -- not the blame. If we each focused on what little we can do in the voting booth and in our day-to-day work to help small businesses more competitive, I think we could find a way out of the mess we are in. It requires a different attitude from each of us. It also requires politicians to be willing to take the heat, for the greater good, and perhaps to settle for a single term.

glenn_ferrell
glenn_ferrell

@Lisa Gerber

Exactly ! We ask for things. Government gives them to us. They stay elected, and we all gradually slip into budget overruns, followed by desperate searches for new revenue. If we could only figure out a sexy way to ask for a balanced budget and a sensible procedure for deciding on what gets cut... instead of continuing down the "loudest-voice-gets-whatever-they-want" path.

That's a meme I would like to see go viral :)

If nothing else, stretch things out. Wait another year before we do that unnecessary road work -- on residential side streets where it does nothing to support business. Even a better idea would be to wait till it's really necessary.

Good CEOs have no more than 3 top objectives a given year (i.e. a given budget period.) If we could get town, village, city councils down to that. Perhaps we would get a little more focus on our spending.

ginidietrich
ginidietrich moderator

@Lisa Gerber We could have an entire conversation about this and about what is going on with Occupy. Perhaps we need to even say it's up to all of us to support local businesses, as well.

ginidietrich
ginidietrich moderator

@TheJackB I agree the lending environment sucks. And it is hard to grow without access to cash. But what other choice do we have?

ginidietrich
ginidietrich moderator

@EricaAllison Ohhhh! I like the idea of tying lending to further education. I like that idea a lot.

ginidietrich
ginidietrich moderator

@John Falchetto I don't know anything about him and I think it's great the President is getting business leaders involved in energizing the economy, but I'm not sure they're the right leaders. We were just going through some slides for a presentation we're giving to peers this morning. It shows only 12% of Americans trust Congress and only 8% trust big business. One would think Main Street business leaders would be asked for help, as well.

wabbitoid
wabbitoid

@ginidietrich I agree, this is one of the big problems with a Depression - the only thing we have to fear is fear itself. We have to get past the natural hunkered down posture that many assume as it feels like the world is closing in around us.

As one of the very first people to call this a "Depression" I am more than willing to be one of the first to say that I see the restructuring happening and the way out forming all around us. There is very good reason for optimism right now. A positive attitude will help anyone find opportunities in this new economy when most people are focused on the fear and insecurity.

This is the time to act!

Lisa Gerber
Lisa Gerber

@glenn_ferrell@HowieG The less we can rely on government, the better. As I said below, and in agreement with both of you, loosen up the regulations to make it easier for small business to do small business and get out of the way.

I am so sick of the political rhetoric. It just doesn't seem to matter who it is - they say the same thing, and get into office, be it congress or presidential office, and can't get anything accomplished because the system is so messed up. (I self censored the F bomb here.)

and Howie, you so could have done better!!! :)

Lisa Gerber
Lisa Gerber

@glenn_ferrell @HowieG @ginidietrich @lisa Gerber
I saw howie's comment about his ice cream sandwich client just as I was headed out to yoga class. I promised myself I'd come back and comment but now I don't want to disrupt but my zen-like state. So I won't get all fired up which I was about to.
I joined the Board for our downtown association hoping I could help effect change for the SBO. I get so frustrated with some of the local regulations that make it cost prohibitive to have a small business in a downtown core. We had a cupcake shop paint cupcakes on their storefront: prohibited. We had a chef from Italy that moved here to open a little cafe. He got slapped with a huge in lieu parking fee when he renovated his space.

I got home last week for the first time in five weeks and four downtown restaurants were closed.

And to your point, Glenn, there are plenty of people who don't want to see any change. They are afraid eir town will become gentrified, and they will get priced out. And yet, they complain about the economy. If downtown were economically sound, things would be different. They just don't realize
. :) ok, I stayed relatively calm.

glenn_ferrell
glenn_ferrell

@HowieG@ginidietrich@Lisa Gerber Well.. I agree with everything here ! Besides the union worker who doesn't care, at the local level - many times - the home owners don't care what happens downtown either. Which is one of the reasons we need to be vocal about supporting our local SBOs.

Not that homeowners shouldn't care -- a vibrant downtown area supports all property values in a town.

Howie Goldfarb
Howie Goldfarb

@glenn_ferrell@ginidietrich@Lisa Gerber

we have to think local. The Ice Cream Sammy client of mine in LA is a mobile business. She needs permits in each city she operates in. She needs health department permits in each county.

Recently she was closed down (2 in one year and you can't operate for a year). Want to know what it was for? The Los Angeles County health dept changed the requirement for how big the plaque showing the address of your commissary needs to be on your truck. Forget the federal level who cares. I just think states should stream line things so you get state certified and be done with it. Local counties and towns reap the benefit from jobs, property taxes and sales taxes.

I looked into incorporating in CA (easy) and NY (not easy). NY requires I place a classified ad in a local and a major print newspaper and run it for 5 weeks just to claim the business name!

I also think too many of us forget how entwined we all are. A union worker or someone with a white collar corp job or someone working for the state/county etc might not think voting for representatives who champion small business is important.

glenn_ferrell
glenn_ferrell

@ginidietrich@Lisa Gerber@HowieG

Maybe one of your readers can change who Obama appoints. I can't. But I can focus on the little data points that make up the statistics -- help local business get more attention, more traffic, more sales; communicate with those who can support them in government. Talk to your local SBOs and find out what their top 3 problems are - then dig a little bit (in Six Sigma they call this the "5 Whys".) Start anywhere. Maybe just fix an incorrect address or add a picture of their business on Google places, add a positive comment on Yelp . While you are waiting on your clothes, chat with the owner of your Dry Cleaners - maybe explain some concept about websites, social media, etc. that would help them.

SBOs are incredibly beleaguered and busy. "Blame-talk" wastes a huge amount of time. Defining problems, identifying, debating and deciding on solutions seems so much more productive -- even tho defining and solving problems -- especially making hard tradeoffs -- is tough work, doesn't get anyone elected and doesn't make for such stimulating writing :)

What a major time-sucking comment this was... and I blame all of you :)

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