Politicians agree on the soundbite: everyone should have a job that pays a living wage. But they don’t agree on how to make that happen. I’d like to help them by sharing some things I have learned. 

Working with leading community and economic development entities over the last two years, I’ve had a close look at our region’s workforce. The data consistently show our region has been adding and filling lower-paying jobs that do not require technical or specialized expertise. At the same time, however, many high-paying jobs that require technical skills are going unfilled.  

For example, experts tell me there are as many as 40,000 unfilled jobs in the cyber security industry in the greater Washington region. Business owners in hospitality, construction and healthcare tell me the same thing: good jobs are going unfilled.  

Here’s what some people who are currently working this problem have told me.  

Ed Barrientos is chief executive of Brazen Technologies, a rapidly growing startup focused on matching talent with jobs. He sees a “major crisis in the ability of businesses to hire qualified and skilled candidates” and points out that this is a broad issue that cuts across industries. More and more frequently, employers are expecting new employees to have the required skills at the time of hiring. Pressures on margins and competition make them less willing to take on the expense of training on the job. They need to hire people who can hit the ground running. 

This is a theme that was echoed by Dario Marquez, president and CEO of Wize Solutions, a business that matches high tech job opportunities in Northern Virginia with workers in Southwest Virginia. His work shows him that “many employers look for candidates to have technical certifications.” Employers not only want workers who say they are skilled – they want some objective measure to ensure that workers are skilled. 

Meeting this challenge of training and certification can’t happen business by business. There must be a paradigm shift in in how we train workers and satisfy employers that workers have the required skills. Glenn Nye, a former U.S. congressman and now an advisor to regional tech companies, including Palantir and FiscalNote, believes that “the jobs of tomorrow will require a rethinking of education, from content at the secondary level to more holistic approaches at the post-secondary level.” 

Addressing the reality of skilled employment is complex. Janet Van Pelt, the CEO of the education firm CourseMaven and an expert on training, sees the issue as having three main components: access to education, credentialing students to demonstrate skills attainment, and public policy. The locations that are the most successful are those where government and the private sector work closely together.

These are just a few examples of what I hear every day. Businesses need skilled employees, but for the most part they do not have sufficient resources or the time to solve this problem on their own. When a business is growing rapidly it can be a tremendous job creation opportunity. Paradoxically, that is the time when they can least afford to train, but most need, skilled workers. 

Owners of rapidly growing businesses in our region haven’t told me that if their taxes are lower, they’d hire more people. What they have told me is that their biggest problem is finding skilled talent to fill they jobs they have ready and waiting. 

Politicians who want to grow our region’s economy need to focus on what the region’s businessmen are saying. After all, they should know best what they need.  

 

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Virginia will be electing its next governor in a few weeks. Many observers see it as a bellwether election. I think they are correct, particularly for what the election will tell us about entrepreneurs’ attitudes towards government and elected leaders. The job creators of our society have a strong message for our elected officials: tax cuts might be nice to have, but social stability and problem-solving are more important. Let me share some of what I have heard from them. 

Michael Avon, chief executive of ICX Media, a digital video start-up, told me that he has grown tired of partisanship. The current environment makes him “fiercely independent – more so than ever before.” He’s looking for elected officials to focus on “working with others to solve problems.”  

Eric Koefoot, president and CEO of Public Relay, a PR monitoring service, raised a similar concern. He thinks that he and many entrepreneurs are “political unicorns – socially liberal and fiscally conservative.” For him, political extremes won’t get the country to where it needs to be. He fears that the parties have become too focused on running towards their perceived bases – the Republicans becoming “socially backward and fiscally reckless” while the Democrats run the risk of becoming “anti-capitalist.” 

The concern that the GOP is abandoning its conservative roots was something I heard from a number of long-term Republicans. Rob Quartel, chairman and CEO of NTELX, a technology implementation firm, is a lifelong Republican who has run for federal office three times. He is very concerned that “both parties are more factionalized, tactical, more ideological” than ever. However, he has particularly strong words for his Republican brethren, because a focus on populism has made the Republican party “all negative all the time” and unwilling to work to solve problems on issues like immigration, free speech and human rights at all levels. These are all issues on which Quartel believes “real conservatives” can engage Democrats in constructive and respectful conversations. He worries that there are few real conservatives left in his party to work across the aisle. 

Worry about stability is another theme that came up frequently. Ajay Sravanapudi, a serial entrepreneur, finds that the current climate is making him more, not less, political. Although he does not identify with a party, he finds himself “pushed to the left even more.” He added that the “tolerance of the chaos of Trump by the right drives me nuts.” 

There’s one thing that I find truly striking as we head into Virginia’s gubernatorial election: the region’s entrepreneurial community is not choosing sides as much as it is choosing to stand for constructive engagement. For the first time in its history, the Northern Virginia Technology Council did not endorse the Republican candidate for governor, instead commending both Democratic Lt. Governor Northam and Republican Ed Gillespie for their willingness to promote innovation and workforce development. 

Another group of regional CEOs, led by James Quigley, the founder of GoCanvas, a mobile technology firm, delivered to both campaigns a letter asking the candidates for focus on workforce development and support for innovation to grow the economy. Almost uniformly, my entrepreneur friends are telling me that they will support politicians and leaders that are serious about solving problems, whatever their party affiliation. They are dismayed by the messages of division that have emerged as a political strategy. 

Both of the candidates say that it is entrepreneurs who will create the jobs our people need. Statistically, that is absolutely correct. Small and rapidly growing businesses founded by entrepreneurs have long been our national and regional economic growth engine. Since the candidates believe that entrepreneurs are so valuable, then my recommendation is that they listen to what they say are saying. 

Entrepreneurs want a government that works with them and politicians who work together. The politics of distraction and division being practiced by some just won’t get it done. 

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I was fortunate to be the moderator of a discussion with Lt. Governor Northam and Vice President Biden. We talked about how important it is to invest in our people, and take positive steps to create 21st century jobs. I was proud to be with them.

Vice President Biden pointed out that the Lt. Governor is a genuine and authentic man. This is consistent with what I have seen over the last 6 years. Public service is a phrase that has come to carry negative weight from some — but when I am with people like the Lt. Governor Northam and Vice President Biden I am reminded that there are many who try to do the right thing every day. Progress doesn’t happen by accident. It happens with intentionality.

 

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The moment when science fiction becomes fact can take even a technologist’s breath away. I confess to gasping for air when I talked about artificial intelligence last week with Max Tegmark, a professor at MIT and the author of “Life 3.0: Being Human in the Age of Artificial Intelligence.”

Tegmark pointed out we need to understand that artificial intelligence is not science fiction any more. Within the lifetime of most who are reading this column, software will develop the ability to complete complex tasks without human intercession. And it will do it faster and better. And that is a very disquieting thought.

So, should we stop developing AI? Tegmark doesn’t see that as the right question to ask. As he puts it, the question is “not whether you are for or against AI. That’s like asking our ancestors if they were for or against fire.” Tegmark believes that as tool makers we inevitably create software that achieves artificial intelligence. It is just in our nature. 

He then suggests that rather than deny the inevitable, we need to address what achieving  artificial intelligence will mean. How comfortable should we be with using it to direct military force or cyber security? Should we have AI allocate healthcare or other societal benefits? What is the role of ethics–our collective sense of right and wrong–in a world where software makes instantaneous decisions on its own? 

And then there is the thorny issue of consciousness itself, which Tegmark describes as the subjective sense of being. For him, it’s the difference between software that gets you from point to point and software that admires the scenery and feels the wind rushing over its sensors.

Does consciousness matter? Tegmark thinks that it does. Eventually, our software will develop the ability to process the world around it with a subjective sense of self. Software may never have feelings like we do, but it will think for itself based upon a sense of “thereness” that will be distinct from the task at hand. Software will be conscious, but in a way that will be alien to us because it will not be human.  Software may provide us with a “first contact” opportunity. 

When that happens, we will face profound challenges. What will be left for the human brain, when software can write better songs, make better artwork and allocate resources more efficiently? Will software become our overlords, our allies or our servants? Tegmark is asking us to consider that once artificial intelligence exists, these questions won’t be answered only by what we want.  

 

 

 

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Some people prescribe tax cuts whenever the question of how to accelerate economic growth comes up. But is that prescription right for this region?

I have been immersed for many years in fostering regional economic development sparked by rapidly growing technology businesses. Over the years, I have spoken with a broad range of educators, entrepreneurs, policymakers, economists and other stakeholders in economic development, and I have gathered a pretty comprehensive picture. Let me share some of what I have learned.

Maintaining our region’s ability to create high-paying jobs requires that we stay in the vanguard of new industries. The leading edge of what is truly new is where consumers and businesses are most willing to pay high prices and where demand is often the strongest. The combination of high prices and high demand creates businesses that can pay workers well and provide for career advancement. The challenge is that staying at the forefront of innovation requires a willingness to undertake basic research that is often expensive and equally often entails a substantial period where there is no profit opportunity.

Regarding the workforce, it is abundantly clear that already existing technologies are displacing unskilled workers and, to growing extent, skilled workers. Moreover, they do so at an increasing rate. Meanwhile, existing approaches to training and developing talent are not adapting to the new jobs that are being created, thereby creating supply shortages or leaving workers on the sidelines.

Infrastructure is chronically underfunded. We see it in Metro and the roads. Less visible but equally important is how many people lack broadband in our region — either because the infrastructure doesn’t exist or because it is far too expensive to sign up.

These are issues that can only be solved by collective action and substantial investment. We know how to do this. The difficulty is motivation. Solving these problems creates long-term social benefits, which are hard to measure. Financial returns are easy to measure — it’s how much additional money you get from investment. While we sometimes try to measure social benefits in financial terms, the reality is investing for financial profit and investing for long-term broader benefit are different.

The most successful regions in our country have figured out how to balance financial investment with social investment. Those that do it best are the ones that lead new industries. These orchestrated investments can be seen in communities that develop infrastructure (e.g., Research Triangle Park in North Carolina), commit to business attraction and support (e.g., efforts to attract Amazon’s HQ2), support local research institutions (e.g., connecting business entrepreneurs with university researchers) or support an environment that integrates larger and smaller businesses into a single community (e.g., Nashville’s rapidly growing innovation culture around health care). There is no single way, because no two regions are exactly the same.

Which brings us to tax cuts.

I will be the first to admit that tax cuts are a very seductive policy prescription. Who wouldn’t love to have more money to spend? But that is the point.

Historical data show that when tax cuts are targeted at higher income levels, the tax savings goes disproportionately into financial investments. There is no guarantee that the money will be invested in businesses (think of index funds, for example, where no direct investments in companies are made) or even a guarantee that the money is invested in the United States. The greater financialization of our economy may make some investors wealthier but it doesn’t provide for a pool of capital for social benefit.

I believe that right now, the best way to grow our region’s economy is increase social investment. To create a skilled workforce, to develop a 21st century infrastructure and to foster new industries, we need to make long term and considered investments. We need to be both wise financial and social investors.

At a time when objective data show that our overall tax burdens are at historical lows, is putting more money into financial assets what is best for our business and innovation community?

There are times where you can’t cut your way to success. This is one of them.

 

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Looking for opportunities to create economic growth, we should not overlook an invisible export. Media is one of the greater Washington region’s largest industries. News is the reason. 

I discussed this recently on “What’s Working in Washington” with J.J. Green, national security correspondent for WTOP-FM and host of the TargetUSA Podcast, Brian Fanzo, founder and chief executive of social strategy consulting firm iSocialFanz, and Judy Kurtz, In the Know columnist for The Hill.  

For all of them, Washington’s importance as a media center really begins with news. News is different from mere information. News is information that is important and worth knowing. What makes news worth knowing? In other words, what gives news its relevance?  

Green said for him the relevance of news begins with novelty, “News is not what people are talking about; it’s what they don’t know.” This makes Washington, D.C. a generator of lots of news, or as he puts it, “Hollywood when it comes to news.” The confluence of the White House, Congress, the Pentagon and other cabinet departments, courts, diplomats, businesses, professionals, and more ensures that there is always something important happening. 

But it is not just novelty. Information can be novel but trivial. Previously unknown information that can affect a person’s life, situation or prospects is news. Impact – consequentiality — is what separates the newsworthy from the trivial. Much of what happens in Washington, D.C. has the possibility of widespread impact.  

The region itself is a news-generating machine, and its productivity is enhanced by the visits of celebrities. The shared trait of all celebrities is that lots of people pay attention to them and listen to what they say. Kurtz sees how celebrities act when they come to town: they are often star-struck by the politicians and political leaders whom they meet. For many of them, “D.C. is their Hollywood,” a place where they attempt to convert their fame into social good by influencing politicians. And in doing so, they create news. 

Fanzo observed that D.C. also creates its own celebrities based on titles and position. As people serve in government as senators, congressman, presidents and judges, they become famous. This makes their words and actions newsworthy. Add to this the leaders of the countless trade groups, not-for-profits, and commercial businesses operating in our region.  

News originated in our region supports a vibrant and dynamic media industry, stretching from traditional media companies to new media startups. It’s an industry that is supported by technology, public relations and advertising businesses. Fanzo, a recent returnee to the D.C. region, has really seen the change and is “beyond impressed in the tech community, entrepreneurship and different brands” that have created exciting business opportunities 

News matters to our region’s economy. 

That is why our region must take so seriously preserving the veracity of news. While other regions of the nation may be concerned about “fake news” as a political issue, our region’s economic health depends upon the objective truth of our news. Without veracity and trust, news loses its value, both politically and economically. For our journalists, veracity and trust in the news is not a theoretical discussion. Nor should it be for those of us concerned with economic development. 

News can drive our region forward. As Green puts it, “the opportunities are just off the charts.” 

At a time where we are looking for industries that can create economic opportunity and jobs, news might be our most meaningful export of all. 

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Do entrepreneurs ever relax? On a Labor Day weekend, I checked in with a number of entrepreneurs to see what they thought. 

Certainly, the idea of relaxation seems to be counter to the image we all have of entrepreneurs – that they are engaged in an all-consuming activity, 24—7, to the exclusion of everything else.

Some of the people I spoke with didn’t think that an entrepreneur could ever relax. Ed Bersoff, chairman of PFF, referred me to the Merrian Webster Dictionary definition of relax (“to relieve from nervous tension”). He didn’t think he had ever found an entrepreneur who truly stopped feeling nervous or worried about their business. “I don’t think that relaxing exists in the entrepreneur’s vocabulary,” was how Bersoff summed up his thinking on the matter. 

This concept of being consistently worried was echoed by many. Being truly off duty was a risky thing – you might miss out on an opportunity for your business if you took your eye off the prize. Lee Weinstein, founder of the digital design firm Brightfind, summed up this conflict in saying, “sometimes it’s good for an entrepreneur to take time off – but not always!”  

Does the constant struggle for success mean that entrepreneurs can never relax? Perhaps the answer is in how entrepreneurs think about relaxation. 

Eric Koefoot, founder of the media monitoring business Public Relay, believes that entrepreneurs approach relaxation differently. In his experience  people who are not entrepreneurial associate relaxation with coasting and not worrying. “This is not a perspective that most experienced entrepreneurs would endorse, because they know that what is termed ‘relaxing’ is really distancing oneself from the daily push and intensity to gather perspectives.” 

This was a recurring theme. Universally the entrepreneurs I spoke with pointed out that for them, relaxation was not the absence of worry – it was an intentional separation from worry and the substitution of a time with a different activity. For these entrepreneurs, this separation occurred within the context of the entrepreneurial journey. Pat Sheridan, founder of Modus Create, an application development firm, explained it as a checkpoint along the way. “It’s important to make sacrifices,” he said, “but keep in mind when it’s time to pay back those debts to yourself.” 

Overall, my entrepreneurial friends all reinforced the importance of self-reflection. Without the external structure of an employer or job description, the entrepreneur needed to find the time to stop. Entrepreneurs relax, but they don’t do it by chance. 

For my part, in case you wondered, I take breaks in my entrepreneurial journey by playing the guitar. Here’s a song I wrote on the topic of entrepreneurial relaxation. I hope you enjoy it. 

Happy Labor Day.

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Power and influence are often described as one and the same, but they are actually very different. My life in business has shown me that if you want to achieve lasting change, you must appreciate that difference.  

When people talk about power, they usually think of it as the power of coercion: the ability to make others do what you want them to do. People are “subordinates,” and they aren’t asked for their thoughts or their consent. They are just told what to do. In this paradigm, power depends on coercion and punishment to ensure that instructions are followed.  

Early in my career, looking at the people around me, I thought that leadership success was obtained through this sort of coercive power. I relied on my position in a hierarchy to get people to do what I wanted, knowing they understood that I had the power to withhold approval and to impose penalties. People followed instructions because they were afraid of what would happen if they didn’t.

But I saw that when the fear of coercive power lessened, so did the ability to get people to follow instructions without their voluntary cooperation. I saw projects managed through coercive power crumble and fade away as soon as that power to penalize became ineffective.

Once I realized that concrete tasks and achievements created by coercion dissolved when coercion stopped, I wondered how I could ever create lasting organizational change, cultural and otherwise. What I had thought was lasting power was in fact very ephemeral. True power was not “getting” people to do what I wanted. True power was giving them a reason to choose to follow my lead. I needed to share a vision and make it compelling enough that people would want to bring it to fruition. I learned that influence-based power is much more effective than coercive power.  

Influence-based leadership is also much subtler than leadership through coercion. When influence is most effective, people act in concert because they share a vision of an outcome and have a sense of being invested in achieving that outcome. Who had the idea or gets the credit is less important than getting buy-in from the group. 

As I looked around, I saw that the most influential leaders were often not at the head of a parade telling people what to do. Instead, they were spectators along the parade route, happily eating popcorn and enjoying the parade they helped start. They knew that power is not something asserted over others. It is something that people assert for themselves in support of a common vision. When each person is vested in an idea or a mission, each person will defend it and work to realize it, not because of fear, but because of the satisfaction that will come with achieving the goal. 

I believe that this lesson of business leadership should be applied more often to policy making and governance. By focusing on power through coercion rather than influence or consent, many of our political leaders legislate on partisan lines without the support of those holding contrary views.

Perhaps we should respect our history more. Our nation is based on the concept of consensus and getting buy-in from the governed. That is what made it different from the autocracies and monarchies our ancestors came here to escape. Our system works best when we honor its founding principles.  

Business leaders know that lasting change in business only occurs when we effect that change through consent and agreement. It’s a lesson that our current political leaders would be wise to remember as they consider the path ahead.  

Change obtained without consensus is unlikely to last.

 

 

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Our region’s economy is rapidly reaching a crossroads. Many of the problems we face cannot be addressed through blanket policy prescriptions. So how about putting aside our partisan bickering and looking at the tasks at hand?

As a business person, I’d like our politicians to acknowledge that there are no absolutes when it comes to creating conditions for successful economic growth. Every successful business person knows that growing a business is never clear cut. We must listen to new ideas and try new solutions when the old ones aren’t working. Inflexible business owners rarely succeed in the long run because they can’t respond to changing circumstances.

If a dogmatic and inflexible approach doesn’t work for business, what makes us think it will work for the economy? I’ll admit that it’s somewhat comforting to believe that a rosy economic future can be assured if we follow simple policy prescriptions. All would be well if we had a higher minimum wage. Tax cuts are what is needed to grow our small businesses. All regulations are bad. And so it goes. 

Instead of focusing on absolutes, we should acknowledge that our economy is an imperfect amalgam of businesses that historically has grown best when we rely on data to create policies and approaches that maximize economic opportunities. It’s never been effective for us to merely take a set of prescriptions on faith. When we admit that we live in that gray area where outcome matters more than ideology and when we are willing to acknowledge that well-run government coexists with well run businesses, that’s when our economy grows the fastest.

The greater Washington region faces real growth challenges. Our highways and roads are crowded and getting worse. Public transportation is failing, even as we build town centers in reliance upon it. Our local employers need tens of thousands of skilled workers for our most promising new industries but can’t find them. Housing is unaffordable, and young promising workers are moving elsewhere to seek their futures. New technologies are being created in our region and never commercialized. Export opportunities go unmet because our business people don’t know how to seize them.

These are issues that can’t be solved through an invisible hand acting on its own or through blanket tax cuts or cutting red tape. If the only rule that matters is individual profit maximization, then any problem that requires collective investment or burden sharing goes unsolved. Conversely, if the only rule is that government can do everything, then we may lose the dynamic influence of the individual profit motive in creating new solutions to these large challenges. We need a blend of the best of everything, and we need to be willing to accept that growing an economy is messy. None of us will get everything we want and no good solution will be ideologically pure.

As we look at our politicians, we should ask them to demonstrate that they are willing and able to provide specific solutions to the problems at hand. We should demand that their thinking be clear and that proposed solutions be thoughtful and reflect real-world data and facts, rather than talking points tied to ideological purity or warmed up proposals prepared by well financed political action committees.

We don’t run our businesses that way. Why should we ever tolerate such inflexibility and incuriosity in how our economy is grown?

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Military leaders are shaped by the nature of the conflicts they face. When they become business leaders, as they often do, their leadership styles reflect the times in which they served. I was reminded of this when I spoke recently with Chris Fussell, the managing director of a consultancy called the McChrystal Leadership Institute.

Until recently, the prevailing view of optimal business leadership has been a “top-down” approach. Top-down business leadership centralizes decision making and requires concerted actions by subordinates who are evaluated by how well they perform against strictly defined duties and goals.

The top-down approach has been strongly influenced by military experience. Militaries everywhere, including the U.S. military, have traditionally followed a top-down model. The types of wars they fought (or prepared to fight) required highly orchestrated activities of tens or hundreds of thousands of people on a battle front. It also required managing highly complex logistical chains, to support the movement of these large armies.

For this reason, 2oth century experience was that when military leaders entered the business arena, their skills were a good match for prevailing conditions. At that time, the world economy was dominated by large companies making and selling complex industrial products that required strict manufacturing conformity. Success meant achieving economies of scale that would keep costs down and sales high.

By the beginning of the 21st Century, however, the business world was rapidly and irreversibly changing. Companies like Google, Microsoft, Facebook, Amazon and others were disrupting existing business models. Companies based on new technologies in transportation, biotechnology and energy were challenging existing market leaders. Meanwhile, instantaneous communication was changing how people coordinated and interacted around the world. Success in business now required agility. Top-down leadership was often too slow to respond to rapidly changing market conditions.

While this was occurring in the private sector, people like Fussell were coming of age as military leaders. They realized that the trends that were changing business were also prevalent in warfare. Instantaneous communications and the broad availability of technology had created adversaries that used small coordinated groups to act quickly. It was no longer sufficient for the military to prepare to fight wars along a battle front. These adversaries would never fight that way

What was required were “servant leaders,” people who Fussell describes as having the skills to create an organization that combines strategic oversight with small group agility. Servant leaders provide transparency to subordinates. They don’t prescribe in granular detail the “how” to execute strategic vision, but fully express the “why.”

Subordinates are given autonomy to make rapid decisions in the moment, if necessary, to achieve the strategic goals of leadership. But it is not complete autonomy. Servant leaders require accountability against their expressed goals. This ensures that key values such as ethics and compliance with legal and other norms are honored and that the overall strategic objectives articulated by the leader are followed.

For Fussell, the key to servant leadership is that it is “not enough to talk about it. You have to create a process that drives communication with enough speed and transparency.” This allows groups to form and operate with autonomy, but within a structure of accountability. You get people to work together not by telling, but by showing.

Now an organizational expert helping businesses grow, Fussell regularly sees that the skills he and his peers gained through military service have broad application in today’s rapidly changing economy. He has helped many businesses use servant leadership to make a significant difference.

And in the process, he follows in the footsteps of so many prior military leaders who successfully applied their leadership lessons to business.

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