Newsletter #4 (August 26, 2024)
What the hell is the 'Great Detachment'? Disney, Texas water, that Starbucks CEO change, lawyer gibberish, Harley Davidson, and more.
Welcome to Business Thoughts and More from an HR Guy, Newsletter #4! This is my twice-monthly, long-form newsletter post where I write about all things HR and L&D, the business world, and/or other current events I find interesting. LET’S GO!
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1. What the hell? The “Great Detachment” is not new. Why are ‘we’ acting like it?
I have seen a few articles rolling around about the Great Detachment like this one. For starters, employee engagement in the workforce has always been a thing. It is not new. HR professionals are usually fretting about how to keep employees engaged in the mission, vision and practice of the company they are working in. How do you keep employees motivated to achieve the goals of the organization? That’s a question that has always loomed heavily on leadership.
So it is a bit surprising to me to see so much online chatter about this ‘Great Detachment’ being ‘led by Gen Z.’ There is no reason this should be a surprise to anyone after the effects from the last few years. Consider it a hangover that just doesn’t go away. Of course employee engagement is going to keep going down when companies are not addressing employee concerns, not rewarding skills growth with pay increases or more challenging work assignments (not pizza parties, folks), cost of living and inflation are still stubbornly high, and the prospects for changing jobs is potentially limited for those anticipating a recession.
2. Disney leadership and legal teams frankly make some baffling decisions.
If you have been following the news lately, there was an online furor over Disney’s odd choice to defend a wrongful death lawsuit by claiming the opposing party had waived their right to sue by signing up for a Disney+ trial subscription. I’m not an attorney, but I recognize stupidity when I see it. Buying food at a restaurant in one of their parks has absolutely nothing to do with a streaming subscription. The company had to have known when news like that hit the internet they would be roasted for it, right?
Wrong. Similarly, Disney initially chose violence also when defending itself against the claims of a fired actress from its Disney+ show, The Mandalorian. Disney first claimed in a request for dismissal of that suit that terminating the actress from the show was based on “First Amendment grounds.” Now, the company has been ordered to mediation by a federal judge. So, instead of maneuvering to handle this privately at the beginning, the company believed it was better to go to trial, only to end up back where it started – being ordered to handle it privately.
These actions call back to the very public ordeal with another actress in which the company felt emboldened to handle publicly instead of privately settling the matter. Only after facing significant backlash from the creative community and online did the company finally recognize it made a misstep. When will it learn?
3. Texas continues to be timid in tackling a forthcoming water crisis.
There were quite a number of economic articles and readings about the State of Texas which caught my eye. I mentioned in the last newsletter that a primary concern about all of the population and business growth was regarding the state of affairs with water in Texas. So, it should come as no surprise with this ‘blink and you’ll miss it’ article about a small town outside of Abilene, Texas, called Clyde.
Beyond the ravages caused by persistent drought, Clyde missed a bond payment, defaulting on its obligations for its water system, and causing institutional bond insurers to be asked to cover the note. As the article notes, defaults on governmental debt are very rare, but with all of the economic issues that inflation has caused in the last few years, adding the effects of drought on top of those issues were too much to overcome.
The State of Texas, while somewhat serious about confronting its water supply concerns, it is tackling the reoccurring flooding threat head-on. With the growing population, Texas will have to continue to invest more in water supply infrastructure, agricultural support, monitor food supply dependent on water, and play a significant game of whack-a-mole as it moves forward to the future.
4. Lawyers, non-competes and legalese, oh my!
Unless you were living under a rock in the past week, you likely heard that a Texas judge struck down the ban on non-competes nationwide. I cannot say I am surprised by the ruling, as on the surface it does make some sense (that the FTC cannot create overly broad rules in a ‘sweeping prohibition’).
On the other hand, there is a fundamental problem with the blanket use of non-competes by companies. I do not agree with the Chamber of Commerce’s response to the ruling that “…the noncompete ban would harm American workers and businesses and the economy overall.” Would the ban as written be harmful to businesses? Absolutely. Would it be harmful to workers? Absolutely not, at least not directly.
Companies who use blanket non-competes to essentially ban competition for talent on the labor market are exactly what the FTC was attempting to go after with this ban. The FTC would be wise to follow what could be construed as instructions in the judge’s order, choosing to target the ban towards employees making less than say $100,000 or something of that nature. There absolutely have to be carveouts to prevent employees from being poached by competitors, taking company secrets and client lists with them. But an employee making $60,000 as a teller at a bank should not be effectively banned from going to another bank as a teller by being forced to sign a capricious non-compete.
In related news, I spotted the results of an interesting study on the use of a foreign language in the modern business world: legalese. The results of this study showcased why lawyers write legal documents in a foreign language, saying it “acts to convey a sense of authority.” In a twist of irony, the study results also note, “….the researchers found that legalese also makes documents more difficult for lawyers to understand. Lawyers tended to prefer plain English versions of documents, and they rated those versions to be just as enforceable as traditional legal documents.” In other words, not only do lawyers prefer to read documents written in plain English like the rest of us, they don’t even know what the hell they are writing in the first place. Shocking, it is not.
5. Starbucks had to have known it would face a public lashing on its new CEO being able to supercommute from home on the company jet. Right?
Starbucks made a midnight run at replacing their CEO, kicking out Laxman Narasimhan and bringing in Chipotle’s soon-to-be-former chief executive in a surprise move that investors cheered. After the details began to be made public about how all of this went down, one thing that caught the ire of many people was the perceived hypocrisy of the new chief’s working arrangements with two particular items. The first was Brian Niccol’s ability to work remotely, and the second was his ability to supercommute from California to Starbuck’s office in Seattle.
The issues with these arrangements surrounded Starbuck’s previous return-to-office (RTO) mandate, where three-time-former-CEO Howard Schultz said corporate employees needed to be in-office 3 days per week. I’m not going to beat on the RTO drum here, as I think there are plenty of studies available, as well as appropriate observations which downplay how much is really at stake with a hybrid work schedule to the benefit of employers.
I will note the perceived issue, though, with the now significant gap between Starbuck’s sustainability initiatives and what the impact of Niccol’s supercommute will be. As much as I think activist investors can sometimes cause more harm than good, there may be something to be said about Elliott Investment Management’s stake in Starbucks in that change on the board may be needed after a series of questionable CEO processes. And, please, Howard Schultz needs to move on (which appears to be part of the deal with Niccol coming in).
6. Harley-Davidson and Brown-Forman are the latest companies to back-track on their DEI initiatives.
Harley-Davidson has now joined the ranks of Tractor Supply, John Deere, as well as Brown-Forman, in changing its very public DEI stances. Harley-Davidson
Brown-Forman, the parent company of Jack Daniels, said it would stop linking executive compensation to DEI and end participation in an annual LGBTQ ranking of company work environments, among other changes.
Among other notes and opinions about DEI, it is becoming increasingly obvious companies need to retrench their diversity initiatives, rebranding and refocusing these efforts in ways that actually help impact the bottom line. As mentioned previously, companies should focus on encouraging diversity of thought and in the makeup of their employee population in other ways, minus the controversy surrounding DEI.
7. The adjustment to job growth may have been significant, but in historical context, not so much.
Much was made about the downward revision of the jobs growth between March 2023 and March 2024 to the tune of over 800K jobs. Ignoring the political implications of such a move, the reality is when a governmental entity is merely guessing (ahem, estimating) a nationwide number based on a small subset of employer-provided data (not reporting, provided), adjustments are going to be periodically needed.
While this time was particularly different, it may surprise some that this is a rather normal process from a historical perspective. The US government would be better served replacing this somewhat archaic practice with the more-relevant ADP reporting, which will it itself still provides incomplete data, it is more reliable than hand-typed numbers on spreadsheets. I’m not the only one calling for that, but if we are going to make central banking decisions made in part on this data, it should be done using data provided directly by payroll systems, instead of manual reporting processes.
8. Regarding using data provided directly by providers, WorkDay and WorkNumber announced a curious initiative.
For many years, the calls for a central job application process in the US, or at minimum, a centralized database that many employers could route their application processes through, have been met with privacy advocates expressing concerns such a system is not a good plan.
Curiously, I have not seen – at least not yet – the same calls for privacy restrictions with WorkDay’s recent announcement to partner with the WorkNumber to “…save companies money by reducing the time that verification inquiries take.”
In other words, WorkDay and WorkNumber (Equifax) will share personal data between their respective payroll and employment verification services to expedite verifying your employment and earnings (if you are working for a company using WorkDay and they opt in to the service).
While this is absolutely a potential efficiency for any WorkDay customer to explore, it defeats all of those prior calls to not have a uniform service similar for an application tracking system (ATS). For those on the job hunt, simply seeing yet another WorkDay application process for another employer is enough to cause some people to vomit. There has to be a better way, and WorkDay is showing here it is willing to compromise.
9. For those who like crossover appeal, my favorite LinkedInLunatics from the past two weeks meshed with the latest Marvel movie, Deadpool and Wolverine.
I had a few favorites from the past two weeks, one in particular hit me in the jaws. While I applaud whatever effort was being attempted here, two things were wrong: 1) this person clearly had not seen the movie and 2) the premise of the meme is just frankly ridiculous. Two points for the attempt though, I guess!
10. And finally, some good news from an enterprising entrepreneur in India.
Mohammed Mohiuddin has come up with a biodegradable ‘plastic’ bag that could realistically find a way to reduce the exorbitant amount of non-biodegradable plastic in the environment. Read more about Mohammed’s invention here.
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And that’s a wrap. I’ll be back in two weeks. Let me know what you think!
© August 2024 Brandon Caldwell, all rights reserved. Hyperlinks are used frequently for proper credit to source material on respective websites, news articles, social media or other sources. While it can be a useful tool, no ChatGPT or other generative AI was used in the production of this newsletter. Opinions are mine and do not reflect the opinion or policy of others including employers past or present.