America’s War for Jobs: An Interview with Gallup CEO Jim Clifton
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America’s next great global challenge is a fight for job creation. In his book The Coming Jobs War, Gallup CEO Jim Clifton says that jobs are a new international currency and that America’s future depends on creating many of the 1.8 billion good jobs needed worldwide. Clifton spoke with Free Enterprise.com about the themes in his book and what it will take for America to win the coming jobs war.
You called Gallup’s research showing that everyone the world over wants a good job the organization's most important discovery. How is this changed from years past?
All of the things that used to be of significance as far as value—things like peace, freedom, god and religion—are still important to us, but they’ve been diluted by this new need. We don’t care as much about foreign wars, and our attitude toward issues like homosexuality or abortion have softened. We can see it changing especially with young people because the new number-one value that trumps them all is ‘my relationship to my job.’
Few economists you talked with think the United States will win the jobs war. Is there realistic hope?
There is definitely hope. There are 6 million businesses in the United States, basically all small. Of those, 75% are in business because their owners are interested in being their own boss [or because of other personal reasons]. But the other 25%, when they get up in the morning, they really want to grow. They aspire to be shoot-ups and have a business that builds $5 million, $10 million, even $50 million. But we have to be in a state of mind of free enterprise or hell is coming. Policies do make a difference. When we look at the 6 million businesses and ask why they’re not growing, it’s because they have a fear and lack of confidence in legislation or regulation, not because they can’t get loans.
Leaders have to create the spirit of free enterprise in their cities, encourage startups and entrepreneurs, and make it fun to be in business. Nobody builds anything great when they lack confidence in the future of free enterprise.
What is the relationship between job growth and how businesses engage customers?
Of the 6 million businesses – and here’s something no one knows – not one is trying to make a job. If we hire someone, you might get $2,000 t0 $4,000 in tax breaks, but considering the amount of money it takes to hire someone, that’s the wrong stimulus. Every meeting I am in, we are always talking about trying to find new customers. The world is at $60 trillion GDP, and the math is pretty clear that we will be at $200 trillion GDP in 30 years. That’s $140 trillion of new equity, jobs, and sales coming in. It’s really the coming customer war because jobs follow customers, not the other way around. We need to be building strategies around the $140 trillion in customers. This country has to export like crazy or China really will blow by us. But we can outthink the world in innovation and entrepreneurship.
You mention the Gallup Path in your book. What does it reveal about engaged employees and the importance of good managers?
The Gallup Path tries to figure out the role human nature plays in business outcomes. What companies really want is organic growth—not acquired growth. What you want is quality sales growth. We have tracked this all over the world. If you can get a certain percent of customers who rate you a 5 (on a 1-5 scale), you will experience quality sales growth, and from that you’ll have profit and stock increase.
Our analysts figured out you can map sales growth to teams of 10 people, and where you have spirited teams, you have quality sales growth. If you go to any company and say, 'let me have all your data that mathematically describes your relationship with customers and your own workplace satisfaction surveys,' you can map everything by good managers versus bad managers. Where you have lousy sales growth, it’s because you’ve named the wrong person manager.
You present growing healthcare costs as one of the biggest threats America faces. Can the United States win the jobs war without addressing the root of the healthcare costs?
No, it’s not possible. I hear smart people say, “If we didn’t have war, we could afford healthcare.” But they don’t understand the difference in these costs. We are only at $200 billion a year for the wars in Afghanistan and Iraq. We spend $2.5 trillion a year on healthcare. In just 10 years, spending will total $10 trillion. People estimate that the housing market crash cost $3 trillion. The healthcare tsunami wave is three times bigger than the subprime crisis.
The thing that’s really interesting to me is that there are some pretty extreme health zones in the United States. People in Boulder, Colorado Springs, and Fort Collins, Colorado, have significantly higher physical wellbeing than people in Des Moines, Iowa. There are have half as many obese people in that zone than in Des Moines, and Des Moines has 2-to-1 diabetes rates.
Well-run companies, like Target, are making a commitment to increasing the wellbeing of their employees. Their healthcare costs will go down. They will have fewer accidents, people will come to work on time, etc.
What words do you have for Washington in terms of supporting job creation?
I would tell it to look out and see this country as 6 million turtles. I mean turtles in a good way because a turtle can get running pretty darn fast. But they have their heads in their shells, and until they get their heads out, nothing will work. I say to both sides of the aisle, with every decision that you make, consider whether it will encourage the turtle to tuck its head in or push it out. If there is a healthcare bill that, as a small businessperson, I don’t understand, I lose confidence in what is coming out of Washington. I tuck my head in a little bit. If I have to put new signs up because of new union rules, ask yourself if that tucks the head in or pushes it out. It’s the perception that freezes [small business growth]. Until we are in a free enterprise state of mind, those turtles won’t take their heads out.