Generation Next

Generation Next

As we move into the third month of 2011, we’re already seeing signs that this will be a transformational year.

The revolutions in Tunisia and Egypt may mark the beginning of the long-awaited democratization process across the Middle East and perhaps elsewhere. The new Republican majority in the U.S. House may mark a sea change in how America is governed. The end of the Great Recession and improved shipping volumes in most trade lanes may mark a new boom in the shipping industry, at the same time as major processes and business methodologies take hold and produce still more changes in how companies across sectors manage supply chains.

From items as large as the size of ships that carry cargo to more fine-tuned details such as the management of chassis and other equipment, the architecture of our business world is changing.

It’s also possible that an even more transformational change may be occurring, one not often talked about in our industry, but one that will likely have far-reaching consequences for several decades. This issue received a lot of general press coverage at the beginning of 2011 but, like most news stories, seemingly has disappeared since then. I’m referring to the first wave of the baby boomer generation — those of us born around the end of World War II — who will turn 65 or 66 this year and become eligible for Medicare (65) and full Social Security (66) benefits.

Born in 1947, I won’t be 66 until 2013 and I’ve more or less ignored this simple fact of demographic arithmetic. I ignored it, that is, until I received an e-mail from a long-time industry friend who asked me to congratulate him because he had, just that day, registered for Medicare!

I have to say I was gob-smacked by this event. Of course, I know many people who have retired over the years and who have become eligible for these benefits, but they somehow seemed to be of another, older generation. And this was the first time I’ve been asked to congratulate anyone on becoming 65 and able to go on Medicare.

Shortly after that, I talked with another industry friend about which medications we were each taking, how expensive they were, what a pain they could be to keep track of and other similar whines common to “older” folks.

And that is where we get to the impact of all of this on the shipping of goods.

I have written about one aspect of this situation in the past: that the “bench” in our business may be just a bit shy-of-the-mark. This is not to be critical of the competence of the next generation of industry managers. Rather, it is a comment on whether there are enough of them with sufficient training and experience to be able to keep the wheels and turbines and engines moving in order to keep the complexities of our business in good order.

One thing seems clear: The Great Recession hollowed out many businesses, including ours. Many of the cuts companies made in the name of cost cutting and efficiency happened at the upper ranges of salaries. That was great for reducing costs, but it also eliminated much of the experience accumulated within companies.

At the other end, the last-person-in-first-person-out type of personnel reduction eliminates many of the younger, ambitious, perhaps not fully identified talents within organizations. Adding to this is the reduction or elimination of many of the training programs our industry had created in order to produce a cadre of educated younger managers.

To be sure, a kind of evolutionary process that is fundamental to this process has been occurring for a long time and is necessary to renew businesses and companies. But what we’ve seen over the past couple of years seems to have gone beyond the normal succession planning, retirement-promotion process we are all familiar with.

I also recognize that I may be taking this too seriously, or too personally. But I am already on the outside of the corporate carousel, a transition that began in 2003 and restarted in 2009, so my process is already in place. There are few surprises or unexpected events; there is no need to train a replacement or put a succession plan in place.

My concern is that our industry, which is likely to become even more essential to this country’s economy in coming decades, may not have prepared sufficiently to provide the same level of extraordinary service to which our markets have become accustomed over the past 30 years. I’ve never wanted to be more wrong.

Barry Horowitz is the principal of CMS Consulting Services and former general manager of container marketing at the Port of Portland. Contact him at 503-208-2232, or at barryh@cms-cs.com.