What a difference a year makes.
Prior to April, the consumer electronics business, along with almost every other industry segment, was suffering from a talent flight from CE companies to anything dot-com, including start-ups that offered little more than soon-to-be worthless stock options and a bean-bag chair to flop down in.
Now the business press regularly runs stories describing the collapse, or at least severe wounding, of so many of these fledgling start-ups. Consider the numbers for a moment:
- Most estimates suggest that more than 22,000 dot-com employees have been laid off in the past six months or so.
- According to Challenger, Gray & Christmas Inc., a Chicago-based outplacement firm, the number of dot-com layoffs progressively increased from August through October, a month when the ranks of the newly jobless exceeded 5,600.
In light of this it would be easy to say "I told you so," while heaving a sigh of relief that you yourself did not make the leap. But that would be missing the point. Nor is it correct to conclude that it will once again be an employer's market and become automatically easier to hire good, qualified people.
A fair number of those laid off have already relocated to other Internet companies, and there is stiff competition for those who have not yet done so coming from traditional, non-CE industries. But I do hope that CE retailers will recognize this is a golden opportunity to recruit the talent these people represent, talent this industry desperately needs.
A couple of years ago I worried that our economy's managerial pool had skipped a generation and was fostering a legion of twenty-somethings who did not know that sooner or later, profit matters.
My concern was they would consider a business progression from start-up to IPO to personal wealth to be normal, without understanding that somewhere in all of that the business must be a financial success, or at least look like it will be in the foreseeable future.
Well, as with so much else, it turns out that I need not have worried as much as I did. The market did come to its senses and has brought most everyone back to reality long before the young and not-ready-for-prime-time managers were in positions where experience truly counts. But you know what? Some other good has come from this as well.
Those 22,000-plus who recently lost their jobs, along with the estimated 2.3 million who are still in new Internet-based positions created through 1999, are intelligent, well educated and a lot more sober concerning business than they were pre-April 2000. And on top of all that, they know the Internet. They have always known what it could do and now know what it cannot do, and that is a powerful experience set and an asset that CE retailers can put to good use.
The University of Michigan recently published the findings of its annual National Quality Research Center study, which assesses customer satisfaction with more than 200 companies and 30 government agencies. While customer satisfaction has generally been increasing since the mid-1990s, ratings were not positive across all categories and were generally lower among Internet-based companies, including retail.
There are many reasons for this, but don't jump to the incorrect conclusion that people really do not want to shop on the Internet. It is more likely a case of a good idea with bad execution, but that too will ultimately be addressed.
Indeed, while portals in general and most e-retailers and e-brokers were rated well below traditional businesses, Amazon's rating was near the top and well above not only other Internet companies but many brick & mortar companies as well.
With the exception of very few companies, such as AOL, Cisco or Yahoo, the Internet is not a business but rather a tool to be used in business. I can think of few industries whose products and retail practices would benefit more from aggressively using the Internet than CE.
Whether you're in retail or manufacturing, consider the current travails of the Internet economy as a second chance to gain critical Internet experience, along with some hopeful humility, from those who seek to return to land-based companies.
The consumer electronics industry was once an employer of choice, and it can be again if you work to make it happen.
William Matthies can be reached at (714) 626-0680 or at email@example.com.