The ability to motivate employees is one of the greatest skills an entrepreneur can possess. Two years ago, I realized I didn’t have this skill. So I hired a CEO who did.

Josh had 12 years in the corporate world, which included running a major department at Comcast. I knew he was seasoned, but I was still skeptical at first. We were going through some tough growing pains, and I thought that a lack of cash would make it extremely difficult to improve the company morale.

I was wrong.

With his help and the help of the great team leaders he put in place, Josh not only rebuilt the culture, but also created a passionate, hard-working team that is as committed to growing and improving the company as I am.

Here are nine things I learned from him:

Be generous with praise. Everyone wants it and it’s one of the easiest things to give. Plus, praise from the CEO goes a lot farther than you might think. Praise every improvement that you see your team members make. Once you’re comfortable delivering praise one-on-one to an employee, try praising them in front of others.
Get rid of the managers. Projects without project managers? That doesn’t seem right! Try it. Removing the project lead or supervisor and empowering your staff to work together as a team rather then everyone reporting to one individual can do wonders. Think about it. What’s worse than letting your supervisor down? Letting your team down! Allowing people to work together as a team, on an equal level with their co-workers, will often produce better projects faster. People will come in early, stay late, and devote more of their energy to solving problems.
Make your ideas theirs. People hate being told what to do. Instead of telling people what you want done; ask them in a way that will make them feel like they came up with the idea. “I’d like you to do it this way” turns into “Do you think it’s a good idea if we do it this way?”
Never criticize or correct. No one, and I mean no one, wants to hear that they did something wrong. If you’re looking for a de-motivator, this is it. Try an indirect approach to get people to improve, learn from their mistakes, and fix them. Ask, “Was that the best way to approach the problem? Why not? Have any ideas on what you could have done differently?” Then you’re having a conversation and talking through solutions, not pointing a finger.
Make everyone a leader. Highlight your top performers’ strengths and let them know that because of their excellence, you want them to be the example for others. You’ll set the bar high and they’ll be motivated to live up to their reputation as a leader.
Take an employee to lunch once a week. Surprise them. Don’t make an announcement that you’re establishing a new policy. Literally walk up to one of your employees, and invite them to lunch with you. It’s an easy way to remind them that you notice and appreciate their work.
Give recognition and small rewards. These two things come in many forms: Give a shout out to someone in a company meeting for what she has accomplished. Run contests or internal games and keep track of the results on a whiteboard that everyone can see. Tangible awards that don’t break the bank can work too. Try things like dinner, trophies, spa services, and plaques.
Throw company parties. Doing things as a group can go a long way. Have a company picnic. Organize birthday parties. Hold a happy hour. Don’t just wait until the holidays to do a company activity; organize events throughout the year to remind your staff that you’re all in it together.
Share the rewards—and the pain. When your company does well, celebrate. This is the best time to let everyone know that you’re thankful for their hard work. Go out of your way to show how far you will go when people help your company succeed. If there are disappointments, share those too. If you expect high performance, your team deserves to know where the company stands. Be honest and transparent.

I had coffee with an ex student earlier in the week that reminded me yet again why startups burn through so many early VPs. And after 30 years of venture investing we still have a hard time articulating why.

Here’s one possible explanation–job titles in a startup mean something different than titles in a large company.

You Can’t Always Get What You Want
I hadn’t seen Rajiv in the two years since he started his second company. He had raised a seed round and then a Series A from a name-brand venture firm. I was glad to see him but it was clear over coffee that he was struggling with his first hiring failure. “I’ve been running our company, cycling through customer discovery and validation and the board suggested that I was running out of bandwidth and needed some help in closing our initial orders. They suggested I get a VP of sales to help.”

It was deja vu all over again. I knew where this conversation was going. “Let me guess, your VCs helped you find a recruiter?”

“Yeah, and they were great. They helped me hire the best VP of sales I could find. The recruiter verified all the references and he completely checked out. He was in the top 1% club at (insert the name of your favorite large company here.) He’s been in sales for almost 15 years.”

I listened as he told me the rest of the story. “I thought our new Sales VP would be out in front helping us lead customer validation and help us find the pivot. That was the plan. We had talked about it in the interview and he said he understood and agreed that’s what he would do. Even when we went out to dinner before we hired him he said, he said he read the four steps and couldn’t wait to try this customer development stuff.”

“So what happened?” I asked, though I was betting I could finish the conversation for him (since I had made the same mistake.) “Well, he’s completely lost at the job. When we ask him to call on a different group of customers all he wants to do is call on the people already in his rolodex. When a customer throws us out he wants to get on to the next sales call and I want to talk about why we failed. He says great sales people don’t do that, they just keep selling. Every time we iterate even a small part of our business model or product he gets upset. When we change the company presentation it takes him days to get up to speed to the smallest change. He’s finally told us we’ve got to stop changing everything or else he can’t sell. He was supposed to be a great VP of sales. I’m probably going to fire him and start a search for another one, but what do I do wrong?”

“Nothing,” I said, “You got what you asked for. But you didn’t get what you need. The problem isn’t his, it’s yours. You didn’t need a VP of sales, you needed something very different.

Companies Have Titles to Execute a Known Business Model
I offered that in an existing company, job titles reflect the way tasks are organized to execute a known business model. For example, the role of “sales” in an existing company means that:

there’s a sales team executing
a repeatable and scalable business model
selling a known product to
a well-understood group of customers
using a standard corporate presentation
with an existing price-list and
standard terms, conditions and contract

Therefore the job title “sales” in an existing company is all about execution around a series of “knowns.”

We Use the Same Title for Two Very Different Jobs

I asked Rajiv to go through this checklist. Did he have a repeatable and scalable business model? “No.” Did he have a well understood group of customers? “No.” Did he have a standard corporate presentation? “No.” etc. Did he and his recruiter say any of this when they put together the job spec or interviewed candidates? “No.”

Then why was he surprised the executive he hired wasn’t a fit.

Startups Need Different Titles to Search for an Unknown Business Model
In a startup you need executives whose skills are 180 degrees different from what defines success in an existing company. A startup wants execs comfortable in chaos and change–with presentations changing daily, with the product changing daily, talking and with analyzing failure rather than high-fiving a success. In short, you are looking for the rare breed who is:

comfortable with learning and discovery
trying to search for a repeatable and scalable business model
agile enough to deal with daily change, operating “without a map”
with the self-confidence to celebrate failure when it leads to iteration and Pivots

That means the function called “sales” at a large company (and the title that goes with it, “VP of Sales”) doesn’t make sense in a startup searching for a business model. Sales implies execution, but that mindset impedes progress in searching for a business model. Therefore, we need a different job function, job title and different type of person. They would be responsible for customer validation, finding pivots and searching around a series of unknowns. And they would look nothing like his failed VP of sales.

I suggested to Rajiv his problem was pretty simple. Since he hadn’t yet found a repeatable and scalable business model, his startup did not need a VP of sales. The early hire he needed to help him run customer validation and pivots has a very different skill set and job spec. What Rajiv needed to hire was a VP of customer development, and part ways with his VP of sales.

I suggested he chat with his investors and see if they agreed. “I hope they don’t make me hire another ‘experienced’ VP of sales,” he said as left.

Lessons Learned

Companies have titles which reflect execution of known business models
Early stage startups are still searching for their business model
Individuals that excel at execution of a process rarely excel in chaotic environments
We burn through early VP’s in startups because the job functions we are hiring for are radically different, but we are using the same titles.
Startups need to use different titles to indicate that the search for a business model requires different skills than executing a business model.

Related articles:

How To Discover Amazing Talent For Your Startup
Why Digital Talent Doesn’t Want To Work At Your Company
9 Nagging Questions To Tune Out When Launching A Startup
Should You Hire For Skill Or Spirit?

Reprinted from SteveBlank.com

Steve Blank is a prolific educator, thought leader and writer on Customer Development for Startups, the retired serial entrepreneur teaches, refines, writes and blogs on “Customer Development,” a rigorous methodology he developed to bring the “scientific method” to the typically chaotic, seemingly disorganized startup process. Now teaching Entrepreneurship at three major Universities, Blank is the author of Four Steps to the Epiphany. Follow him on Twitter @sgblank.

[Image: Flickr user welshmackem]

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The conventional wisdom is that our education system is failing our economy. But our companies deserve a lot of the blame themselves.

By PETER CAPPELLI

Everybody’s heard the complaints about recruiting lately.Even with unemployment hovering around 9%, companies are grousing that they can’t find skilled workers, and filling a job can take months of hunting.

Employers are quick to lay blame. Schools aren’t giving kids the right kind of training. The government isn’t letting in enough high-skill immigrants. The list goes on and on.

But I believe that the real culprits are the employers themselves.

With an abundance of workers to choose from, employers are demanding more of job candidates than ever before. They want prospective workers to be able to fill a role right away, without any training or ramp-up time.

Bad for Companies, Bad for Economy

Andrea Levy

In other words, to get a job, you have to have that job already. It’s a Catch-22 situation for workers—and it’s hurting companies and the economy.

To get America’s job engine revving again, companies need to stop pinning so much of the blame on our nation’s education system. They need to drop the idea of finding perfect candidates and look for people who could do the job with a bit of training and practice.

There are plenty of ways to get workers up to speed without investing too much time and money, such as putting new employees on extended probationary periods and relying more on internal hires, who know the ropes better than outsiders would.

It’s a fundamental change from business as usual. But the way we’re doing things now just isn’t working.

The Big Myths

The perceptions about a lack of skilled workers are pervasive. The staffing company ManpowerGroup, for instance, reports that 52% of U.S. employers surveyed say they have difficulty filling positions because of talent shortages.

But the problem is an illusion.

Some of the complaints about skill shortages boil down to the fact that employers can’t get candidates to accept jobs at the wages offered. That’s an affordability problem, not a skill shortage. A real shortage means not being able to find appropriate candidates at market-clearing wages. We wouldn’t say there is a shortage of diamonds when they are incredibly expensive; we can buy all we want at the prevailing prices.

The real problem, then, is more appropriately an inflexibility problem. Finding candidates to fit jobs is not like finding pistons to fit engines, where the requirements are precise and can’t be varied. Jobs can be organized in many different ways so that candidates who have very different credentials can do them successfully.

Only about 10% of the people in IT jobs during the Silicon Valley tech boom of the 1990s, for example, had IT-related degrees. While it might be great to have a Ph.D. graduate read your electrical meter, almost anyone with a little training could do the job pretty well.

A Training Shortage

And make no mistake: There are plenty of people out there who could step into jobs with just a bit of training—even recent graduates who don’t have much job experience. Despite employers’ complaints about the education system, college students are pursuing more vocationally oriented course work than ever before, with degrees in highly specialized fields like pharmaceutical marketing and retail logistics.

Unfortunately, American companies don’t seem to do training anymore. Data are hard to come by, but we know that apprenticeship programs have largely disappeared, along with management-training programs. And the amount of training that the average new hire gets in the first year or so could be measured in hours and counted on the fingers of one hand. Much of that includes what vendors do when they bring in new equipment: “Here’s how to work this copier.”

The shortage of opportunities to learn on the job helps explain the phenomenon of people queueing up for unpaid internships, in some cases even paying to get access to a situation where they can work free to get access to valuable on-the-job experience.

Companies in other countries do things differently. In Europe, for instance, training is often mandated, and apprenticeships and other programs that help provide work experience are part of the infrastructure.

The result: European countries aren’t having skill-shortage complaints at the same level as in the U.S., and the nations that have the most established apprenticeship programs—the Scandinavian nations, Germany and Switzerland—have low unemployment.

Employers here at home rightly point to a significant constraint that they face in training workers: They train them and make the investment, but then someone else offers them more money and hires them away.

The Way Forward

That is a real problem. What’s the answer?

We aren’t going to get European-style apprenticeships in the U.S. They require too much cooperation among employers and bigger investments in infrastructure than any government entity is willing to provide. We’re also not going to go back to the lifetime-employment models that made years-long training programs possible.

But I’m also convinced that some of the problem we’re up against is simply a failure of imagination. Here are three ways in which employees can get the skills they need without the employer having to invest in a lot of upfront training.

Work with education providers: If job candidates don’t have the skills you need, make them go to school before you hire them.

Community colleges in many states, especially North Carolina, have proved to be good partners with employers by tailoring very applied course work to the specific needs of the employer. Candidates qualify to be hired once they complete the courses—which they pay for themselves, at least in part. For instance, a manufacturer might require that prospective job candidates first pass a course on quality control or using certain machine tools.

Going back to school isn’t just for new hires, either; it also works for internal candidates. In this setup, the employer pays the tuition costs through tuition reimbursement. But the employees make the bigger investment by spending their own time, almost always off work, learning the material.

Bring back aspects of apprenticeship: In this arrangement, apprentices are paid less while they are mastering their craft—so employers aren’t paying for training and a big salary at the same time. Accounting firms, law firms and professional-services firms have long operated this way, and have made lots of money off their young associates.

Of course, a full apprenticeship model—with testing and credentials associated with different stages of experience—wouldn’t work in all industries. But a simpler setup would: Companies could give their new workers a longer probationary period—with lower pay—until they get up to speed on the requirements of the job.

Promote from within: Employees have useful knowledge that no outsider could have and should make great candidates for filling jobs higher up. In recent years, however, an incredible two-thirds of all vacancies, even in large companies, have been filled by hiring from the outside, according to data from Taleo Corp., a talent-management company. That figure has dropped somewhat lately because of market conditions. But a generation ago, the number was close to 10%, as internal promotions and transfers were used to fill virtually all positions.

These days, many companies simply don’t believe their own workers have the necessary skills to take on new roles. But, once again, many workers could step into those jobs with a bit of training.

And there’s one on-the-job education strategy that doesn’t cost companies a dime: Organize work so that employees are given projects that help them learn new skills. For example, a marketing manager may not know how to compute the return on marketing programs but might learn that skill while working on a team project with colleagues from the finance department.

Pursuing options like these vastly expands the supply of talent that employers can tap, making it both cheaper and easier to fill jobs. Of course, it’s also much better for society. It helps build the supply of human capital in the economy, as well as opening the pathway for more people to get jobs.

It’s an important instance where company self-interest and societal interest just happen to coincide.

Dr. Cappelli is the George W. Taylor professor of management at the Wharton School and director of Wharton’s Center for Human Resources. He can be reached at reports@wsj.com.

Copyright 2011 Dow Jones & Company, Inc. All Rights Reserved

Slowly but surely, many U.S. companies are loosening their viselike grips on IT hiring and looking to add new staffers to bolster business growth in the year ahead.

That trend is reflected in Computerworld’s annual Forecast survey. Nearly 29% of the 353 IT executives polled said they plan to increase IT staffing through next summer. That’s up from 23% in the 2010 survey and 20% in the 2009 survey. Altogether, it’s a 45% increase in hiring expectations over the past two years.
Tiny Upticks

What changes, if any, do you expect in your IT employee head count in the next 12 months?

Increase: 29%
Decrease: 17%
Remain the same: 54%

Source: Computerworld’s exclusive Forecast 2012 survey, June 2011. Base: 353 IT executives

“We’re seeing [strong hiring] across the board,” among organizations of all sizes, says Mike McBrierty, chief operations officer for the technology staffing division of Eliassen Group, an IT recruiting firm. He says there has been pent-up demand for infrastructure upgrades and investments that had been shelved over the previous three years.

The Forecast survey also revealed that IT managers may be thinking about innovation, not merely keeping the lights on, as they plan their staffs for 2012. Respondents said these nine skills will be in demand.
1. Programming and Application Development

• 61% plan to hire for this skill in the next 12 months, up from 44% in the 2010 survey.

This large year-over-year jump doesn’t surprise people like John Reed, executive director of staffing firm Robert Half Technology, who sees demand for a variety of skills in areas ranging from website development to upgrading internal systems and meeting the needs of mobile users. “Web development continues to be very strong” as companies try to improve the user experience, he says, adding that there will also be a lot of effort to develop mobile technologies to improve customer access via smartphones.

Mobile application development is especially hot in healthcare, says Randy Bankes, associate director of IT at Lehigh Valley Health Network, a multicampus healthcare system in Allentown, Pa. Bankes says he’s had a “god-awful hard time” trying to hire people with skills in mobile technologies. “It’s competitive as hell right now,” says Bankes.

Bill Predmore, director of enterprise application support at the Capital Metropolitan Transportation Authority in Austin, also sees growth in mobile technology, especially in the transportation industry. “There’s more and more of a push to implement whiz-bang Web stuff, along with making trip planners, [bus and train] route data and schedule data presentable on mobile devices,” he says.
2. Project Management

• 44% plan to hire for this skill in the next 12 months, up from 43% in the 2010 survey.

Big projects need managers, but they also need business analysts who can identify users’ needs and translate them for the IT staffers who have to meet those needs and complete projects on time. “The demand has been more for business analysts than project managers,” Reed says — in other words, those who can help deliver projects rather than merely oversee and monitor them.

That’s what Sean Masters discovered when he embarked on a job search in March. “When I was framing myself as a systems, network, security or other administrator role, I was hardly getting any attention,” says the IT professional from Worcester, Mass. “As soon as I shifted my résumé to list those specific technologies used in accomplishing specific projects, I was suddenly framing myself as an engineer who could not only manage systems, but also plan, design and implement them.”
3. Help Desk/Technical Support

• 35% plan to hire for this skill in the next 12 months, down from 43% in the 2010 survey.

As long as technology is used in the workplace, there will be a need for support staffers, be they internal or remote. And in organizations such as Lehigh Valley Health Network, help desk and tech support are points of entry for IT professionals and places to pick up the skills that can advance them into, say, a programming or systems analyst role, says Bankes.

But mobile operating systems “have added a new dimension to help desk and tech support,” says David Foote, CEO of IT staffing consultancy Foote Partners. “There are so many operating systems now that the mobile platform, and especially tablets, have quickly shoved aside the old Windows/Mac OS PC desktop axis.”
4. Networking

• 35% plan to hire for this skill in the next 12 months, down from 38% in the 2010 survey.

Robert Half’s Reed says IT professionals with networking skills continue to be in high demand and have been “for a few quarters.” That demand has been fueled, in part, by virtualization and cloud computing projects. In fact, during his recent job search, Masters says he saw heavy interest in virtualization skills.

Reed says hiring managers are looking for people with “practical work experience” in the networking arena, especially if they have worked in an organization that has migrated to a virtualized or cloud-based environment. In particular, they’re looking for people with VMware and Citrix experience.

As for certifications, they’re important but they’re “not driving the market one way or the other,” he says.
5. Business Intelligence

• 23% plan to hire for this skill in the next 12 months, up from 13% in the 2010 survey.

Eliassen Group’s McBrierty says his firm is starting to see more demand for IT professionals skilled in BI. The uptick indicates a shift from focusing on cost savings to investing in technology that provides access to real-time data, enabling better business decisions.

That may happen at Lorillard Tobacco, says Dan Clark, manager of server and desktop technology. The $6 billion company is looking to expand its use of Microsoft’s SharePoint collaboration software from about 175 users to more than 2,000, he says. “This will require additional head count to develop and administer,” Clark says, adding that he’s especially interested in SharePoint developers.
6. Data Center

• 18% plan to hire for this skill in the next 12 months, down from 21% in the 2010 survey.

Like networking, data center operations will be impacted by organizations’ virtualization and cloud strategies. In particular, Reed says, hiring managers will be looking for IT professionals with backgrounds in data center operations and systems integration.

In addition, the demands of having data available to achieve guaranteed IT service levels underscore the need for people who are experts in disaster recovery and business continuity, according to Bob Cuneo, CIO at Eliassen Group. Companies need to ensure that the systems that users depend on will be there when they need them, and those systems need to be backed up and replicated, he says.
7. Web 2.0

• 18% plan to hire for this skill in the next 12 months, up from 17% in the 2010 survey.

Technical skills centered around social media remain in demand today, as more industries look for ways to integrate Web 2.0 technologies into their infrastructures, and Reed says he expects that demand to continue in 2012. He sees .Net, AJAX and PHP as key back-end skills, with HTML, XML, CSS, Flash and Javascript, among others, on the front end. “Organizations know they need to engage their customers via online platforms, and professionals who can support these initiatives will continue to command a premium in 2012,” Reed says.
8. Security

• 17% plan to hire for this skill the next 12 months, down from 32% in the 2010 survey.

The one-year drop may be surprising given that information security threats are a moving target, but security is a top-level concern for many organizations, especially those that are considering cloud computing as part of their IT strategies, says Reed.

Corey Peissig, senior vice president of technical operations at Mortgagebot, a Web-based mortgage software provider, says security is a top priority at his company. “Strong technical security and auditing skills are in high demand in our business,” he says. “The challenge is that good talent in this arena is sometimes difficult to find.”
9 Telecommunications

• 9% plan to hire for this skill in the next 12 months, down from 17% in the 2010 survey.

“We have an aggressive agenda to upgrade communications systems,” with a strong need for voice-over-IP help, says Laurie Connors, a human resources official who handles IT hiring at Partners HealthCare, a Boston-based healthcare organization that includes the renowned Massachusetts General Hospital.

That’s why Partners will be looking for telecommunications expertise in the coming year. Foote says he sees demand for people with IP telephony skills, and for those familiar with Cisco IPCC call center systems.

Although there may be some concerns about the resiliency of the U.S. economy over the next year, the three-year trend in hiring plans highlighted in Computerworld’s Forecast survey indicates that IT hiring budgets are expanding. “We’re in a cycle now where it’s more about innovation than cost savings,” says Reed. “You can only create so much efficiency, [and] you can only reduce so much cost.”

To top managers at Levi Strauss, revamping the information technology system seemed like a good idea. The company had come a long way since its founding in the 19th century by a German-born dry-goods salesman: In 2003 it was a global corporation, with operations in more than 110 countries. But its IT network was antiquated, a balkanized mix of incompatible country-specific computer systems. So executives decided to migrate to a single SAP system and hired a team of Deloitte consultants to lead the effort. The risks seemed small: The proposed budget was less than $5 million. But very quickly all hell broke loose. One major customer, Walmart, required that the system interface with its supply chain management system, creating additional hurdles. Insufficient procedures for financial reporting and internal controls nearly forced Levi Strauss to restate quarterly and annual results. During the switchover, it was unable to fill orders and had to close its three U.S. distribution centers for a week. In the second quarter of 2008, the company took a $192.5 million charge against earnings to compensate for the botched project—and its chief information officer, David Bergen, was forced to resign.

A $5 million project that leads to an almost $200 million loss is a classic “black swan.” The term was coined by our colleague Nassim Nicholas Taleb to describe high-impact events that are rare and unpredictable but in retrospect seem not so improbable. Indeed, what happened at Levi Strauss occurs all too often, and on a much larger scale. IT projects are now so big, and they touch so many aspects of an organization, that they pose a singular new risk. Mismanaged IT projects routinely cost the jobs of top managers, as happened to EADS CEO Noël Forgeard. They have sunk whole corporations. Even cities and nations are in peril. Months of relentless IT problems at Hong Kong’s airport, including glitches in the flight information display system and the database for tracking cargo shipments, reportedly cost the economy $600 million in lost business in 1998 and 1999. The CEOs of companies undertaking significant IT projects should be acutely aware of the risks. It will be no surprise if a large, established company fails in the coming years because of an out-of-control IT project. In fact, the data suggest that one or more will.

We reached this bleak conclusion after conducting the largest global study ever of IT change initiatives. We examined 1,471 projects, comparing their budgets and estimated performance benefits with the actual costs and results. They ran the gamut from enterprise resource planning to management information and customer relationship management systems. Most, like the Levi Strauss project, incurred high expenses—the average cost was $167 million, the largest $33 billion—and many were expected to take several years. Our sample drew heavily on public agencies (92%) and U.S.-based projects (83%), but we found little difference between them and projects at the government agencies, private companies, and European organizations that made up the rest of our sample.

The True IT Pitfall

When we broke down the projects’ cost overruns, what we found surprised us. The average overrun was 27%—but that figure masks a far more alarming one. Graphing the projects’ budget overruns reveals a “fat tail”—a large number of gigantic overages. Fully one in six of the projects we studied was a black swan, with a cost overrun of 200%, on average, and a schedule overrun of almost 70%. This highlights the true pitfall of IT change initiatives: It’s not that they’re particularly prone to high cost overruns on average, as management consultants and academic studies have previously suggested. It’s that an unusually large proportion of them incur massive overages—that is, there are a disproportionate number of black swans. By focusing on averages instead of the more damaging outliers, most managers and consultants have been missing the real problem.

Some of the pitfalls of tech projects are old ones. More than a decade ago, for example, Hershey’s shift to a new order-taking and fulfillment system prevented the company from shipping $100 million worth of candy in time for Halloween, causing an 18.6% drop in quarterly earnings. Our research suggests that such problems are now occurring systematically. The biggest ones typically arise in companies facing serious difficulties—eroding margins, rising cost pressures, demanding debt servicing, and so on—which an out-of-control tech project can fatally compound. Kmart was already losing its competitive position to Walmart and Target when it began a $1.4 billion IT modernization project in 2000. By 2001 it had realized that the new system was so highly customized that maintenance would be prohibitively expensive. So it launched a $600 million project to update its supply chain management software. That effort went off the rails in 2002, and the two projects contributed to Kmart’s decision to file for bankruptcy that year. The company later merged with Sears Holdings, shedding more than 600 stores and 67,000 employees.

Other countries, too, have seen companies fail as the result of flawed technology projects. In 2006, for instance, Auto Windscreens was the second-largest automobile glass company in the UK, with 1,100 employees and £63 million in revenue. Unsatisfied with its financial IT system, the company migrated its order management from Oracle to Metrix and started to implement a Microsoft ERP system. In the fourth quarter of 2010, a combination of falling sales, inventory management problems, and spending on the IT project forced it into bankruptcy. Just a few years earlier the German company Toll Collect—a consortium of DaimlerChrysler, Deutsche Telekom, and Cofiroute of France—suffered its own debacle while implementing technology designed to help collect tolls from heavy trucks on German roadways. The developers struggled to combine the different software systems, and in the end the project cost the government more than $10 billion in lost revenue, according to one estimate. “Toll Collect” became a popular byword among Germans for the woes of their economy.

Software is now an integral part of numerous products—think of the complex software systems in cars and consumer appliances—but the engineers and managers who are in charge of product development too often have a limited understanding of how to implement the technology component. That was the case at Airbus, whose A380 was conceived to take full advantage of cutting-edge technology: Its original design, finalized in 2001, called for more than 300 miles of wiring, 98,000 cables, and 40,000 connectors per aircraft. Partway through the project the global product development team learned that the German and Spanish facilities were using an older version of the product development software than the British and French facilities were; configuration problems inevitably ensued. In 2005 Airbus announced a six-month delay in its first delivery. The following year it announced another six-month delay, causing a 26% drop in share price and prompting several high-profile resignations. By 2010 the company still had not caught up with production plans, and the continuing problems with the A380 had led to further financial losses and reputational damage.

Avoiding Black Swans

Any company that is contemplating a large technology project should take a stress test designed to assess its readiness. Leaders should ask themselves two key questions as part of IT black swan management: First, is the company strong enough to absorb the hit if its biggest technology project goes over budget by 400% or more and if only 25% to 50% of the projected benefits are realized? Second, can the company take the hit if 15% of its medium-sized tech projects (not the ones that get all the executive attention but the secondary ones that are often overlooked) exceed cost estimates by 200%? These numbers may seem comfortably improbable, but, as our research shows, they apply with uncomfortable frequency.

There’s a general anxiety that has settled over much of the IT profession in recent years. It’s a stark contrast to the situation just over a decade ago. At the end of the 1990s, IT pros were the belles of the ball. The IT labor shortage regularly made headlines and IT pros were able to command excellent salaries by getting training and certification, job hopping, and, in many cases, being the only qualified candidate for a key position in a thinly-stretched job market. At the time, IT was held up as one of the professions of the future, where more and more of the best jobs would be migrating as computer-automated processes replaced manual ones.
Unfortunately, that idea of the future has disappeared, or at least morphed into something much different.

The glory days when IT pros could name their ticket evaporated when the Y2K crisis passed and then the dot com implosion happened. Suddenly, companies didn’t need as many coders on staff. Suddenly, there were a lot fewer startups buying servers and hiring sysadmins to run them.
Around the same time, there was also a general backlash against IT in corporate America. Many companies had been throwing nearly-endless amounts of money at IT projects in the belief that tech was the answer to all problems. Because IT had driven major productivity improvements during the 1990s, a lot of companies over-invested in IT and tried to take it too far too fast. As a result, there were a lot of very large, very expensive IT projects that crashed and burned.
When the recession of 2001 hit, these massively overbuilt IT departments were huge targets for budget cuts and many of them got hit hard. As the recession dragged out in 2002 and 2003, IT pros mostly told each other that they needed to ride out the storm and that things would bounce back. But, a strange thing happened. IT budgets remained flat year after year. The rebound never happened.
Fast forward to 2011. Most IT departments are a shadow of their former selves. They’ve drastically reduced the number of tech support professionals, or outsourced the help desk entirely. They have a lot fewer administrators running around to manage the network and the servers, or they’ve outsourced much of the data center altogether. These were the jobs that were at the center of the IT pro boom in 1999. Today, they haven’t totally disappeared, but there certainly isn’t a shortage of available workers or a high demand for those skill sets.
That’s because the IT environment has changed dramatically. More and more of traditional software has moved to the web, or at least to internal servers and served through a web browser. Many technophobic Baby Boomers have left the workforce and been replaced by Millennials who not only don’t need as much tech support, but often want to choose their own equipment and view the IT department as an obstacle to productivity. In other words, today’s users don’t need as much help as they used to. Cynical IT pros will argue this until they are blue in the face, but it’s true. Most workers have now been using technology for a decade or more and have become more proficient than they were a decade ago. Plus, the software itself has gotten better. It’s still horribly imperfect, but it’s better.
So where does that leave today’s IT professionals? Where will the IT jobs of the future be?
1. Consultants
Let’s face it, all but the largest enterprises would prefer to not to have any IT professionals on staff, or at least as few as possible. It’s nothing personal against geeks, it’s just that IT pros are expensive and when IT departments get too big and centralized they tend to become experts at saying, “No.” They block more progress than they enable. As a result, we’re going to see most of traditional IT administration and support functions outsourced to third-party consultants. This includes a wide range from huge multi-national consultancies to the one person consultancy who serves as the rented IT department for local SMBs. I’m also lumping in companies like IBM, HP, Amazon AWS, and Rackspace, who will rent out both data center capacity and IT professionals to help deploy, manage, and troubleshoot solutions. Many of the IT administrators and support professionals who currently work directly for corporations will transition to working for big vendors or consultancies in the future as companies switch to purchasing IT services on an as-needed basis in order to lower costs, get a higher level of expertise, and get 24/7/365 coverage.
2. Project managers
Most of the IT workers that survive and remain as employees in traditional companies will be project managers. They will not be part of a centralized IT department, but will be spread out in the various business units and departments. They will be business analysts who will help the company leaders and managers make good technology decisions. They will gather business requirements and communicate with stakeholders about the technology solutions they need, and will also be proactive in looking for new technologies that can transform the business. These project managers will also serve as the company’s point of contact with technology vendors and consultants. If you look closely, you can already see a lot of current IT managers morphing in this direction.
3. Developers
By far, the area where the largest number of IT jobs is going to move is into developer, programmer, and coder jobs. While IT used to be about managing and deploying hardware and software, it’s going to increasingly be about web-based applications that will be expected to work smoothly, be self-evident, and require very little training or intervention from tech support. The other piece of the pie will be mobile applications — both native apps and mobile web apps. As I wrote in my article, We’re entering the decade of the developer, the current changes in IT are “shifting more of the power in the tech industry away from those who deploy and support apps to those who build them.” This trend is already underway and it’s only going to accelerate over the next decade.
This article was originally published on TechRepublic.

Lawmakers in Washington are ignoring the real problem: A generation is losing work skills. We need to fix that.

By Nina Easton, senior editor-at-large

FORTUNE — Has anyone in Washington noticed that 20% of American men are not working? That’s right. One out of five men in this country are collecting unemployment, in prison, on disability, operating in the underground economy, or getting by on the paychecks of wives or girlfriends or parents. The equivalent number in 1970, according to the McKinsey Global Institute, was 7%.

Both political parties have proven their talent in ginning up outrage over the federal budget, whether it’s spiraling spending or millionaires collecting tax breaks on private jets. So today a tiresome, and dangerous, debt drama unfolds in real time, freezing leaders in both parties in their respective partisan corners. Are these same leaders capable of confronting the fearsome fact that 4.3 million Americans have been jobless not just for months–but going on years? We are in danger of losing a generation of work-habituated Americans, especially men–and lawmakers can’t see their way past November, 2012.

This is a conversation that goes beyond a stubbornly high 9.2% unemployment rate and last week’s unnerving news that company layoffs are ticking up again. While we all know there is a job shortage, employers are increasingly talking about a “talent shortage” — they can’t find qualified workers even for the jobs that are available. “We found that 30% of companies surveyed had openings for six months or longer, and can’t find the right person,” says Susan Lund, research director for the McKinsey Global Institute.

With slack demand, companies can afford to be pickier about who they hire — and commonly steal away already-employed workers rather than dip into a riskier pool of people who have been out of work for months or years. “As long as there is slow demand, [they say] ‘I can delay hiring and when I do hire a person it’s the perfect person,’” says Jeff Joerres, president and CEO of ManpowerGroup.

Google (GOOG) has anywhere from 1,500 to 2,500 jobs open at any given time that take months and months to fill, says Laszlo Bock, the company’s senior vice president of people operations. And it’s not just computer and engineering skills that companies need. Frits van Paasschen, CEO of the Starwood (HOT) hotel chain, says “we have a whole set of jobs”—like international tax accountant—”where we can’t find” qualified applicants. Joerres says the No. 1 need for companies right now is sales person: Someone skilled not only in personal relations but also able to master the details of an integrated supply chain.

All three executives spoke at an Atlantic magazine-sponsored jobs forum last week that exposed a stark disconnect between the jobs that are available—and the increasingly rusty skill-sets of those who are unemployed, especially for long periods of time. People have “no idea what skills they should have to find a job,” says Bock.

That’s a place where businesses have to start stepping up to the plate. It’s true that McKinsey reports an expansion of training programs. And there are companies like Delta partnering with a state university to produce airline-ready managers and associations like the Manufacturing Institute working with community colleges on certificate programs. But Joerres says a lot of companies don’t offer training for prospective employees because—with slack consumer demand and weak job market—they don’t have to. “If they don’t have to, they aren’t going to,” he says.

The longer a worker is unemployed, the farther he or she falls behind in sellable skills in a fast-paced global economy. But there is an even more fundamental question behind the rise in long-term employed rates: Are our public policies contributing to the rise of millions of Americans who lose the habit of work?

Whether you believe (as some economists do) that unemployment insurance discourages immediate job searching—or not—it’s worth asking whether the American “unemployment” system should more closely follow a program like Germany’s “re-employment” system, which cut stubborn long-term unemployment rates in that country.

And then there is federal disability insurance, where the percent of American adults collecting checks has doubled since 1989 — even though the American population isn’t any less healthy, or more mentally disabled (the fastest growing disability claim). “It is difficult to overstate the role that the [disability program] plays in discouraging…the ongoing employment of non-elderly adults,” concludes a study by MIT’s David H. Autor and the University of Maryland’s Mark Duggan.

If that’s not enough to grab the attention of political leaders, here’s a 10-year peek into the future of the U.S. labor force if current trends continue: A continued expansion of workers collecting income from disability rolls plus another four million high school dropouts–on top of today’s 15.4 million.

And yet, according to a ManpowerGroup report, at the same time companies will face an “acute talent shortage.”

Where’s the outrage over that?

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