Workers who possess specialized information, as most workers do, trade this information for a salary. But most workers have knowledge beyond the rote performance of their daily services. They understand the industry they are in, the local plant, and the condition of the office. The information sits there. The possessors don’t convert it into additional income. This lets their employers capitalize on this information, which makes the workers more efficient, but for which the employer need not pay.
Why not? Because workers either do not know how to capitalize on this information or else are afraid to. Their employers do know how to capitalize on it and are not afraid to. So, there is a wage-depressing combination of (1) lack of employees’ knowledge of the market for information and (2) the fear of those possessing it to sell it to other corporate buyers or to customers directly.
I tell high school students to get a part-time job in a non-franchised business that has been around for five years or longer. The owner is a survivor. I tell a student to keep his eyes open. Watch how every phase of the business operates. This is a paid educational experience. The boss pays him to learn the business. That is not the boss’s intention, but it is the result with those who take my advice. Probably not many do.
A student could do this in a fast-food restaurant, but there is less to learn. The system is an assembly line process. The owner is a physician or someone else with money to invest. The manager is a wage-earner. This is not the kind of business that makes a young person a millionaire by the time he is 45.
In high school, I had one friend – Larry – who was in the Junior Achievement program. Junior Achievement is a very fine program. It teaches high school students how to start a little business. Larry tried to get me into it. I declined.
His father was in the restaurant business. That is a tough business: Open entry makes competition fierce. His father taught him the business. Before I graduated from college, he ran a small diner of his own. He used to get up at 3 a.m. to drive to the Los Angeles farmer’s market by 4:30 a.m. He would negotiate for fresh produce. Then he would drive back to Manhattan Beach. He worked long hours. He mastered the details of that cottage industry.
By the time we were 30, Larry owned a nice upscale restaurant. He had the best gimmick I ever saw in a restaurant. After your meal, a waiter would come with a tray filled with uncooked meat and fish – steak, swordfish, etc. You could buy tomorrow night’s main course for a dollar. That was in 1974.
How did he make a profit? My guess: (1) liquor sales by the drink; (2) repeat business. Was the place crowded? Yes. Did people buy a drink while they waited? Yes. Did they come back? Yes.
Larry did not learn marketing in school. He learned it as a teenager by watching his father. He learned it in his own diner.
He was my first introduction to the business mentality. I have much greater respect for this mentality today than I did in 1959. But that’s because I have spent over 30 years as a businessman. I dabble in footnotes as an avocation. That was not my intention in 1959 or 1969.
In 1974, I was making $1,000 a month, with no benefits. Larry was probably making five times that. Or, more likely, he was plowing it back into his business. I began my first entrepreneurial effort – publishing my “Remnant Review” newsletter – in 1974. Larry had a 15-year head start on me.
It is never too late to learn how to observe what is going on around you at work. A salaried person is in a position to ask questions, all in the name of becoming a sympathetic listener. People will tell you just about anything if they think you are interested in hearing their story and are sympathetic to their latest disaster. I would not suggest taking notes … until you get into your car in the parking lot.
Every business has basic operational characteristics. These are hidden in plain sight. But most employees pay no attention. Because they regard their careers as either fixed or on a very narrow track, they regard as peripheral almost everything going on outside their narrow zone of responsibility. This is like living next to a gutter in which $100 bills are floating by. Nobody looks down.
Michael Masterson says that 1,000 hours of study will make anyone competent in most jobs. If you have ever seen the movie “Catch Me If You Can”, you know it’s true. But a lack of interest plus fear keep most people from ever pursuing business-related information beyond that which is required to earn a salary.
This opens up avenues for profit for anyone who keeps his eyes open.
Start with a used “Dummies” book. These books are amazingly good. They introduce you to the basics of any topic. They break down the parts into bite-size steps. If people would act on what they read, there would be a lot of competition. But “Dummies” books are like diet books. They do not change most people’s behavior patterns for longer than a week.
If you decide to take my advice, don’t talk about it. Just start looking. Ask a few questions that are appropriate for someone in your position who is trying to become a better worker, or, better yet, a helpful colleague. Then go home, buy a used “Dummies” book online, read it, follow its recommended reading list, discover relevant websites, and start putting together a notebook of print-outs.
Your goal should be mastery of the division above you if you’re in a layered system of management. How do the people above you profit from your work? If you can discover this, you can get a major promotion, either in the company or from a competitor.
Second, learn the basics of the division below you. This will be useful if you ever make it into senior management.
See if there are aspects of your division that could be performed by an outsourced firm. If you like what you do, but the highest you could go in your company is vice president in charge of your division, consider becoming a third-party provider of these services. There, you can become president.
If you cut TV to one hour a day, and if you used that saved time to master the basics of your business, how long would it take you to accumulate 1,000 hours?
You may be too afraid to launch a new career. My suggestion: See what your level of fear is after accumulating those 1,000 hours.[Ed. Note: Gary North is a regular contributor to the Daily Reckoning. He has also written more than 50 books and has edited his own financial newsletter, Remnant Review www.garynorth.com/public/99.cfm, since 1974.]