Market Watch
Deragon Executive Search
PO Box 13642
San Luis Obispo, CA 93406
Phone: (805) 783-0292
Fax: (805) 783-0293
Email: info@deragons.com
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| Introduction |
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Despite the fact that March is nearly over, this March newsletter is good timing for Deragon Executive Search to reach out to our growing readership, and recap the quarter’s momentum. We are announcing our transition to a service structure that is dedicated more to the retained search business model. This moves forward as we are simultaneously and proactively seeking to grow our team of permanent staff. We continue to plan on a 25% increase in revenue and services rendered to our clients for 2007 over 2006, addressing growth in delivering search completions, and meeting the demand that our clients have bottled up for us.
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| Introduction |
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I’m going to discuss technology challenges that are very much a common discussion among professional business people these days. We have become so efficient that we can never be out of touch for more than a few minutes, it seems, and this is the subject of much humor related to turning your cell phones off in movie theatres and in churches across the country. But it goes far beyond cellular phones now.
Deragon Executive Search, like many businesses that “leverage as much technology as they can practically and usefully integrate”, is also considering the usual and tempting menu of possible software upgrades and new hardware available this year. Under evaluation are new versions of software, lighter and more capable laptops, and a new iteration of our database software; in the meanwhile we continue operating the existing “kit” at full capacity. The reason technology is mentioned in this sense is the constant, pressing mandate to become increasingly efficient as individuals. The tools for gaining this advantage are everywhere, and pleading for purchase. However, only some of them are really desirable, or even necessary at any given moment in one’s business evolution. What is often disguised as a productivity enhancer can develop into a time-wasting gadget.
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| Introduction |
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Of fundamental importance is to determine how critical any stream of information is, and the criteria to prioritize information continues to change when I decide what my audience needs, and if I need it. If I deliver the right information, is it delivered in a compact fashion? And if I am time-effective and efficient as a provider, will you like our brand better from gaining access to it? Or will I just have a few seconds of your time every month to establish value? I am pleased that you are willing to allow me to come into your world as the distributor of potentially valuable content. I am seeking to have you as readers help with the content. We’re working on a chat-enabled portal concept for the Deragon Executive Search website, (www.deragons.com) at the current moment. We will soon evolve with you- to “bring you into the organization” if you choose to do so.
It is always incumbent upon me to continue learning and to educate myself, and fully take advantage of software programs and integrate all of the systems used while running a business. We all struggle with organization. With me the competitors are Franklin Planner and Outlook and ACT and a variety of ways to synchronize, integrate, and make them dance together. As professional time managers we inevitably cobble together something that is less than ideal, based on using any of the productivity management systems in the office and on the fly. There never seems to be a single answer or solution, so we weave the systems together. I constantly seek the best practices for gathering news and distributing important news and information, while at the same time filtering out what is not necessary.
The challenge is to become more connected, and better collected, and reduce paper loads, simultaneously. The holy grail of desired office status: paperless-ness. The challenge is not a natural one for anyone who didn’t have exposure to computers in high school OR college! One has to re-think every step in office procedures. Don’t press “print”. The evaluation process confronts middle-agers to continue pursuing personal efficiency as well as education and development, and to become more “Modern” in their consumption of news and information.
The question is, can I become more like the current college class, such as my daughters, who are about to burst out onto the job market with capabilities to communicate with the rest of the world that are natural? These connected people have become a new force in the economy. The economic power represented by this generation will have a revolutionary impact on commerce, advertising, and marketing. Already has. So as a service provider to them, and everyone else chasing the competitive edge technology offers, we have to design and determine new methods of reaching the class.
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| Introduction |
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Is it possible to eliminate or minimize the printed media that finds its way into one’s office? Yes. Can we avoid having to print everything? Sure. In some cases old sources of news can be eliminated from our lives altogether. In other cases we can seek the digital alternative to the same media. I admit to a preference for having some beautifully printed material around, but regrettably this bulk is still dominated by piles of print newspapers and magazines. As for glossies, one cannot help but savor quality photographs of boats, automobiles, golf courses, and other beautiful things that cannot be duplicated on a computer screen. The glaring sun and other harsh environments such as outdoor decks or pool areas are a good excuse for printed material…electronics are fearful of water; and then there is glare, and the problematic access to a readily available power outlet. Articles and photographs are not easily read from a computing device in cramped quarters on a train or airport terminal or waiting for a meeting in a business lobby. But that will change with the continuous miniaturization of everything.
The select and growing series of opt-in newsletters and blogs that come directly to me via email are converting the content, the tone, and the political preference of what I read. It is being customized gradually by our “sign-up” preferences, allowing us a diet of what we prefer to “eat” versus being susceptible to “what is being served”. The “eat what you’re served” distribution model is gradually being eclipsed by available, customized preferences.
Email can of course, be downloaded now and viewed from laptops, PDA’s, home, or work computers, anywhere in the world, within reason. Not only connected to “the grid”, I use GPS navigation for fun and functionality as well as entertainment in my car, along with the on-board computer, which delivers all the statistics of arrival time, average speed, outside temperature. How can we possibly do without this information once it becomes part of our environment? There is so much else I’m seeking to incorporate into my new information reality. I can proudly send a digital photo taken of a sunset over the Channel Islands from Pacific Coast Highway at 70 MPH out the window of my car, to my daughter at school in London within several seconds; that, if nothing else, proves the Instant, global nature of our connectedness.
One daughter sent over one thousand text messages in February. Hello! What an incredible bit of productivity could be shown if that was an employee of mine collecting research information! The deciding factors for digesting this increasing digital diet are: how time-consuming but critical IS all the data coming in? What is our filter? Is it our mood or a well considered filter? Digital tools allow us as individuals to bypass the legacy distribution sources of information but allow so much choice of additional information, that we could drown in it, as busy professionals, and get nothing accomplished, except to process more of it...
Many of our younger generation have completely eschewed print media and have joined the interactive-content world. Our kids can not only avoid reading a newspaper and still feel informed, at least to what they care about- but they can also create their own content, share it with the world, and they can watch TV, while listening to an IPOD and do their homework at the same time, which is what they are accustomed to doing. They are socialized multi-taskers from the earliest opportunities to communicate.
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| Introduction |
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I find myself fascinated by the ability to create and publish content and deliver it to several thousand people in the course of doing business. It becomes a “brand” but also becomes your value proposition, versus the “other guys”, who may be using their websites like an old fashioned billboard, on the paved highway.
In addition to maintaining a “global point of view” and learning from what is going on in other world regions as much as possible, we also expend considerable time and resources staying “up to date and current” with what is developing in the great state of California. I personally find myself reading more geographically diverse periodicals like The Economist, the Financial Times, and anything with a European and Asian focus, to stay current and competent, but also focusing on excellent sources of good regional information here in the state.
Executive Search services are increasingly in demand in the far reaches of the world, for rapidly advancing regions, and cities such as Belgrade, Sofia, Bucharest, and dozens of cities in India and China are gaining new offices of global firms. In the next three years, in China and India alone, there will be ten million qualified engineers, looking for the appropriate professional engagements to apply their acquired skills. Who will be positioned to deliver this talent in the most effective way?
Our national culture of entrepreneurialism brings me great pride. At risk in the coming elections, and any elections for that matter, is a new cadre of government officials that don’t respect free enterprise capitalism as the solution, and whom are not listening to their constituents. I believe we are in danger of seeing a false democracy evolve, without us being completely aware of it. Are we talking to our representatives? Are we able to reach them? Are they, too, buried in the communication technology ensmotherment of our times?
The entrenched and rising US representatives that believe in a high level of government involvement in our lives and businesses could cost us leadership in the world. The true farce is a population that believes that a government entity can in any way serve as an all-encompassing solution to business and political challenges without first considering private solutions. Capitalists know that Private solutions to large social issues and challenges can be much more efficient. But are they being proposed? Are private solutions not being considered, when they could easily be applied? Is there a “private” solution to the health care cost crisis in the US?
We should never treat our government like a tremendous schmorgasbord of services and choices and giveaways that can be marketed to the public, to improve our lives. And we shouldn’t allow our succeeding generations believe the same. We should solve these problems ourselves, create private organizations that create the solutions from a vigorous and creative private sector: We improve our lives, gain efficiency, and keep the government where it belongs: limited in it’s scope.
The service sector of our economy may be up to the challenge of fending off the softer sectors of housing and manufacturing this year. Thousands of wide-ranging job openings exist in high-paying, high skilled jobs in Biotechnology, health care, computer programming and internet services, in California, along with management positions in financial services and tourism. Now that there is solid evidence that the real estate market is cooling, sub-prime lending companies and underlying loans and risky borrowers are spooking the stock and bond markets. Just a little bit. Corporate profit margins are “stabilizing”, according to the Fed. So I think the Fed could take a serious look at Easing now. How much more evidence is needed? The Economy is strong, inflation in check, employment and job creation is strong, but we could fuel this “party” a bit more. A recession is now being wagered as a possibility, in some of the economic press, by the end of 2007. Since the Fed over tightened, let them loosen, I say.
The US employment situation remains strong, the unemployment rate is firmly below 5%, and our economy remains the envy of every significant economy in the world. In fact, the 4.5% jobless rate now is representative of an extremely strong labor market. For skilled labor, especially technically trained employees, that situation is a good one for the pocketbook- the rising wages scenario for professional workers should be very real this year.
Last year, the EU grew 2.9% versus the US 3.3%. Europe is reportedly 20 years behind the US in Economic Development- measured in Per Capita GDP, GDP growth, Share of Population working, and Long Term Joblessness. The US dominates these statistics. The US has 13% unemployed that have been w/o work, for 12 months, versus Europe’s 42.6%.) So, the US economy relative to employment, is looking solid. In Asia, the amazing growth story in China seems to be holding between 8%-12% depending on who you speak to, with the added fuel of the Olympics being staged in Beijing in 18 months. Talk about hot housing markets, Beijing’s January cost index for housing increased 9.9%. That’s one MONTH.
The Chinese are targeting an 8% economic growth rate for this year. More phenomenal is that merchandise trade globally is growing at 15% a year and China’s exports are at twice that rate. There are 250 million containers moving around the world each year on 4,000 box-carrying ships. 1,300 more ships are currently on order. The newest single ship built by Maersk Lines carries enough containers for a 44-mile long train. How’s that for concentrated efficiency?
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| Wall Street News Bytes |
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Tuesday February 27 there was an almost 9% drop in the Shanghai Index, the worst single day loss since 1997. The correction in China was viewed as a healthy adjustment in overbought markets; selling across other world markets resulted in some other major corrections, and major indexes reached 4 year record sell offs. The bond markets rallied as cash shifted to safety. Stocks fell over 240 points on March 13 due to concerns over the housing market and sub-prime mortgage company failures.
US investors less confident: UBS-Gallup Index of investor confidence fell 13 points to 90 in February. Soft housing, weaker corporate earnings, and the inflation grinch were cited, along with unsettled global political situations have contributed to angst.
UBS Q4 profit declined 47% to $2.73 billion. Operating income rose to $10 billion fueled by positive results in trading at the investment bank; Shares trade at around 63.
Wells Fargo will offer free trading online, mirroring that of Bank of America. $25,000 in deposits or loans will allow 100 free online trades annually.
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| Economic Stats that Matter |
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Durable Goods orders fell 7.8% which was double the estimate by economists. Aircraft orders dropped by 60.3%, and minus that sector the drop was 3.1%, still the worst in a year and a half.
The Business Roundtable, which includes CEO’s from some of the biggest US companies, said the economic outlook index rose to 84.9 from 81.9 in the fourth quarter of last year.
Small firms business optimism index rebounded in January after hitting an almost 4 year low in December. The NFIB small business optimism index rose 2.4 points. More firms planned to add staff, views on the economy improved and higher sales were expected despite higher labor costs.
Oil Prices remain near $60 per barrel.
Core inflation ticked up in January to 2.7% from December’s 2.6%, with food costs rising sharply, along with medical costs. Fed officials and economists shrugged. Forecasters see core inflation at 2% for 2007.
GDP is seen growing 2.8% in 2007.
Consumer confidence rose for the fourth straight month. Americans are upbeat about jobs, with over 10% saying jobs are “plentiful”. Consumer optimism, ironically, fell 1 point to 52.7, above the 50 point “boom-bust line”. American’s view of their own finances and federal economic policies fell.
Home prices dropped in the biggest quarterly statistical loss in 15 years. Home prices in the top 20 metropolitan areas of the USA fell .7%. Annual changes in home prices are either in decline or flat.
Late mortgage payments are surging, showing a 15.6% surge in the fourth quarter. Sub-prime loans are showing a level of distress and it is likely, officials say, that their performance will get worse before getting better.
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| Career Impact Section |
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Unemployment for 2007 will average 4.7%, down from 4.8% according to the Philadelphia Fed. Bravo, United States business people! Jobless claims fell by 27,000 to 332,000; the 4-week average rose 1,250.
The Business Roundtable reported that the net share of big firms planning to hire in 2007 fell to 12% from 14%. 73% of CEO’s expect sales to rise over the next 6 months.
62% of employees plan on looking for a new job in the next 3 months, according to Salary.com’s recent survey. Half of employees consider leaving because they think they’re underpaid.
Women held 15.6% of Fortune 500 officer posts last year versus 16.4% in 2005. The percentage of women in top-paying jobs edged up to 6.7% from 6.4% in 2005.
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| Notable |
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Statistics tell us that the United States of America has become a Welfare State. Social Security, entitlements, and other payments to individuals (“Welfare”) has gone from 21% in 1956 to 59% of the federal budget in 2006; defense spending has gone from 57% of the federal budget to 19% in 2006. The wealthiest 1% of Americans pay 25% of taxes, which was $600 Billion in 2006.
28% of Americans are “Scientifically Literate” now, a four-fold increase over 1988, according to the American Academy for the Advancement of Science. The gain is attributed to colleges mandating students “take at least one science course.” (!!!.)
The earth stopped rotating the day Anna Nicole Smith Died. Just kidding. Almost.
US Sales of Hybrid vehicles rose 28% to 254,545 units in 2006. Toyota’s Prius led 43% of the registrations; California led all states with hybrid sales, with Los Angeles being the top market. Never before has such an ugly design been overcome by practicality and driven successful sales. (My opinion.)
Spending on Video downloads will jump to $4 billion in 2011 an Adams Media Research study said. The surge will be tied to devices which stream computer content to Televisions, such as the new Apple TV.
The world’s largest fortune is said to be China’s $1.2 Trillion Foreign Exchange Reserves.
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| Quotable |
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“Don’t ask yourself what the world needs. Ask yourself what makes you come alive, and go do that, because what the world needs is people who have come alive.”
-Gil Bailie
“In designing computers, which had become the love of my life, it was like solving puzzles. I tried to get better and better and better.”
-Steve Wozniak, Apple co-founder
“The conventional view serves to protect us from the painful job of thinking.”
-John Kenneth Galbraith, economist.
“Plans are only good intentions, unless they immediately generate into hard work.”
-Peter Drucker, author
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All Rights Reserved. ©2001-2004, Deragon Executive Search
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