Commercial Real Estate

How to Negotiate Better Pay

Year 2000 Predictions

Quality New Jersey

Schmooze by Rail

Corrections or additions?

Survival Guide

These articles by Peter J. Mladineo and Barbara Fox were published in U.S. 1 Newspaper on January 7, 1998. All rights reserved.

In the next few weeks, predictions will proliferate about everything from the Year 2000 to the Apocalypse to whether the Princeton Plasma Physics Laboratory will survive the next round of Congressional budget cuts. Expect one common theme to emerge: optimism, which seems to be hitting an all time high. The New Jersey Business and Industry Association's annual business outlook survey has proclaimed that "business optimism about future sales, profits and employment has reached a post-recession record" and that "pessimism about future business conditions has reached a record low."

The NJBIA found that 34 percent of its 1,160 survey subjects feel that overall economic conditions will improve in the first six months of 1998, and 56 percent said that the good conditions would stay the same. But a few caveats persist. Amid the record low of pessimistic views are concerns over New Jersey's shortage of office space and skilled workers. "The strength of the economy is also reflected in a growing scarcity of high-skill workers," says the survey. "However, the bloom in optimism about business conditions has not translated into a much more favorable view of New Jersey as a place for business expansion."

James W. Hughes, dean of Rutgers University's Edward J. Bloustein School of Planning and Public Policy, feels that it will hard for 1998 to match 1997 in terms of economic progress. "It was an extraordinary year," he says. "The year 1997 turned out to be a far more optimistic year than any economic forecaster predicted. So we enter 1998 with a lot of economic momentum. Our economic stars are in pretty good alignment."

He tempers his optimism with a prediction of a possible economic "soft landing" in 1998. "The new year will probably be above-trend again, but not as strong as 1997," he says. "We've never invented a boom that lasts forever."

The 53-year-old Hughes, who addresses the Princeton Chamber of Commerce on Thursday, January 8, calls for a recession sometime in his lifetime, "but not this year," he says. Cost of the Chamber luncheon: $28. Call 609-520-1776. Hughes compares New Jersey's economic recovery favorably to that of the nation as a whole. In "Anatomy of a Business Cycle," a report published by the Bloustein School, Hughes and Joseph J. Seneca, a Rutgers economics professor who is also the university's vice president for academic affairs, describe the depth of New Jersey's economic hole. "While the early 1990s national recession was mild by historical standards, the severity of the New Jersey contraction was unparalleled," the report states. "The 38-month duration of the most recent downturn in New Jersey is unprecedented in absolute length compared to earlier state recessions, and is unprecedented in its differential from the eight-month national recession."

Hughes gives three reasons for a possible slowdown in the 1998 economy. "The Asian contagion is going to have some impact on United States growth," he says. "That will filter down to New Jersey." Second, Hughes predicts that the Federal Reserve will be forced to increase interest rates, which will have a tempering effect on economic growth. Third is the fact that New Jersey, which has been steadily adding jobs since 1992, is running out of labor.

"For three of the past four years the state has been above the long-term average growth of about 50,000 jobs per year," says Hughes. The report states that September, 1997, saw "the full recapture" of all of the jobs lost in the recession of 1989 to 1992. In fact, a record number of jobs (3,717,800) tallied in that month beat out the record established in March, 1989 (3,706,400).

The NJBIA report concurs that the growing scarcity of labor has a somewhat dampening effect on the ability of many businesses to expand. "In the face of the strong job growth and low unemployment, employers are finding it increasingly difficult to find skilled workers," it says. "Survey respondents reported having the greatest difficulty since 1989 in finding skilled, professional/technical and managerial jobs."

However, Hughes cautions against comparing the '90s and the '80s. "We had some great years in the boom of the 1980s, but a lot of that was part of a bubble economy, so the fundamentals weren't that good," he says. Hughes prefers using the '60s as a analogy. These two time periods, he says, share many of the same characteristics in terms of employment growth and economic expansion, with one difference: the '90s are a period of peacetime. At least so far.

"There was a 106-month expansion from '61 to '69, but that was given a second life by Vietnam," he says. If this expansion should continue to December of this year, it will be the longest peacetime expansion ever, he adds.

Perhaps the biggest stimulus to the state's economy, Hughes suggests, has been the information technology revolution. "The state has made a successful transition from the industrial era to the information age," he says.

IT "permeates every other economic sector," says Hughes. "You have information technology inside a Wal-Mart. You have information technology inside of your pharmaceutical research houses. It's the entire infrastructure adapting to IT. I think that's really a driving force. It's hidden. You don't see it as a distinct entity but every company is shifting its hiring in that direction."

Hughes predicts that IT will also stimulate the commercial real estate sector. "It will be a locomotive," he says. "If we look at the office sector, we had a slam dunk office market in 1997. Most of the space is gone, so office building has been on the siding now for eight years. We should see more in 1998."

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Commercial Real Estate

Don't expect to hear anything different from any commercial real estate person, says Rutgers' Jim Hughes: "The market's back, it was last year; this year even got stronger. We expect to see more of the same in 1998."

For the time being, it's slim pickings for office space in the Princeton area. "It's very tight," says Steve Tolcash, a broker with Buschman Jackson-Cross. The Lenox Drive-based commercial real estate firm hosts its annual real estate forecast breakfast on Wednesday, January 14, at 8:15 a.m. at Carnegie 101. Call 609-896-1600 for reservations. "The demand has caught up with the supply to a great extent. We've got the Class A vacancy rate tagged at three percent. Class B is slightly under 10 percent."

And if you're trying to grab a large block of space, forget about it, at least until next summer. "The Princeton market only has four blocks of contiguous space greater than 50,000 feet on the market or coming to market," says Tolcash.

By the second or third quarter, there should be some new speculative buildings dotting the landscape, Tolcash reports. "Exit 8A has got over 1 million square feet of speculative distribution space, high-ceilinged warehouse-type space on line for 1998," he says. "It's under construction now." Also, he adds, Nexus Properties is putting up a 60,000-square-foot "spec" building on Alexander Road, which should be up by the second quarter, he adds.

But don't be misled -- the amount of new construction planned for 1998 will barely represent the tip of the iceberg of the office space shortage in the Princeton area. The 1 million square feet at Exit 8A is relatively insignificant in a market that has nearly 26 million square feet, says Tolcash. "A million square feet doesn't represent a large uptake in space," he adds. "You do see speculative construction there but you just don't see a lot of spec. It's not going to get overbuilt like it was in the '80s. This kind of real estate cycle is fueled by true economic demand."

Tolcash points out one other possibility that would pave the way for a glut of quick office space: "A glitch in the economy and the major companies go into a period of layoffs like the early '90s."

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How to Negotiate Better Pay

Most companies tend to take their employees for granted, says Lee E. Miller, author of "Get More Money on Your Next Job: 25 proven strategies for getting more money, better benefits, and greater job security" (McGraw Hill, January 1998, $14.95). He speaks at Encore Books at the Princeton Shopping Center on Tuesday, January 13, at 7:30 p.m. Call 609-252-0608.

Most of the book deals with negotiating salaries for a future job, and the more than 27 chapter titles include "Creating Red Herring Issues," "Looking for Exceptions," "Making the Company Negotiator Look Good," "Silence is Golden: When to Let the Other Side Talk," "When You're Unemployed: How to Gain Bargaining Leverage Even If You Think You Have None," and "How to Win by Conceding." But Miller does devote one chapter to preparing for your current job's performance review (see page 15). He offers these tips:

Continuously market yourself both inside and outside the company. Without appearing to be self-promoting, make sure key people throughout the company, especially your boss, know what you are accomplishing.

Make your boss look good. Make sure you give priority to the projects your boss considers important. If your boss needs something, make sure to deliver it promptly and make sure it is correct. You want to be what athletes call the "go-to-person," the person you want to get the ball to when you're in the final seconds of the game and need to score.

Share credit for your successes with your boss and with the people who helped you achieve those successes. Your boss will then fight for you when it comes to determine salary increases, and those who work for you will continue to help you in the future.

Communicate your successes to your boss on a regular basis. Executive coaches teach clients to work on developing a relationship with their boss which allows them just to call up or drop by and matter of factly deliver the news whenever something good happens.

Several months before your performance review, find a way to outline for your boss what you have accomplished during the past year. That time frame is soon enough that it will not appear that you are trying directly to affect the outcome.

Learn new skills that are needed by the organization. If you are considered to be a valuable employee but a promotion is not forthcoming, you are still likely to get a sizable raise to assuage your feelings and to keep you from leaving. You can always revisit the issue of a promotion at a later date.

Seek out additional responsibilities. When a company president abruptly resigned, an executive vice president offered to take responsibility for several more departments. When a new president was appointed, she continued to supervise two of the departments that had temporarily reported to her and was given a significant salary increase.

Be aware of your market value. Test the waters in the job market frequently. Play an active role in trade associations. Meet executive recruiters, particularly when you are not looking for a job.

If the company fails to recognize your true market value despite your best efforts, you may want to explore the possibility of changing employers.

An alumnus of Rutgers, Class of 1973, Miller went to Harvard Law and is an adjunct professor at Seton Hall's Stillman School of Business. He has been a partner in a major employment law firm and cochairman of employment practice at Shanley & Fisher, and he has represented such clients as American Express, the National Football League Management Council, and the United States Golf Association. He just left a job as senior vice president of human resources at Barneys New York to be a consultant with Westfield-based Advanced Human Resources Group (908-789-3393). In addition to salary negotiations, he also does training in performance management, hiring and firing, sexual harassment, and career coaching for high level executives.

For most clients Miller works in the background, advising a job hunter on what to say and do next. Where it makes sense to bring in an intermediary is to take a very aggressive position. "If the company reacts negatively to the positions being taken by a professional on your behalf, you are free to disavow them," says Miller. "If it really goes south, you can fire the attorney. This is what the CIA calls maintaining `deniability.'"

Miller says that to use the services of a negotiator might cost $250 an hour for consulting on how to get the best deal for a junior level position, or a flat fee of $2,500 to work on a CEO's behalf -- or $14.95 to buy the book. "What's most fun to me is when the person I've helped recognizes that I've added value," says Miller. "And when I hear from people who have read my book. One person wrote, `I decided it was time to ask my boss for a raise and I got more money than I was going to ask for.'"

The best negotiation strategy is to build your position to bring you to a different salary range. "Explore ways of getting additional responsibilities built into the job," suggests Miller.

The worst negotiation mistake is when the company makes you an offer and you accept it, he says. "Most companies don't lead off with their final offer. Rarely does the company give you the absolute bottom line. When a company does, if you are smart, you will know that." Says Miller: "There is always wiggle room. Even in a situation where there is a budget, there is room to structure it."

-- Barbara Fox

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Year 2000 Predictions

The new hit movie "Titanic" makes clear that the luxury liner was doomed because of several key oversights by the boat's builders and by the White Star cruise line, which thought it could race through the glacier-ridden waters in record time and at the same time cut costs by reducing the number of unneeded lifeboats (gasp). Then, after the 'berg struck the fatal blow, the fact that the ship was doomed wasn't perceived until a mere hour or two before it began its descent into the icy waters of the Atlantic.

Like the Titanic, the world's computer infrastructure has been struck by a veritable iceberg -- the Year 2000 problem, which as everybody already knows will occur on January 1, 2000, when all the two-digit date fields in creation will cause computers the world over to start spazzing out.

The problem of the moment is, while the Year 2000 problem has been largely accepted, there still is a considerable lack of knowledge about the depth of the Year 2000 problem. And some experts predict that 1998 will see a lot of business owners getting awfully frantic over this. One of them is Steve Heffner, president of the Montgomery Commons-based computer consulting firm Pennington Systems. "A lot of companies that are already addressing the issue are going to realize that they don't have enough time and will start to panic," he predicts.

The Princeton ACM/IEEE Computer Society hosts Heffner on Thursday, January 15, at 8 p.m. at the Sarnoff Corporation auditorium. Cost: free. Call 609-924-8704. Also Amper Consulting will be hosting a Year 2000 seminar on Monday, January 26, at its offices at 2055 Lincoln Highway in Edison. Call 732-287-1000 for more information.

Heffner, who taught on the Wharton Business School faculty for 13 years until 1994, was a past chairman of the IEEE Computer Society's Princeton section. His 20-year-old firm makes automated tools to perform computer functions (including XTRAN, which assists in the Y2K process).

His speech, "Armageddon Worried about the Year 2000: How I Learned to Love the Millennium Bomb," uses Biblical references and an adaptation of a line in the mordant Peter Sellers comedy, "Dr. Strangelove." Here are some of his Y2K predictions for 1998:

The Y2K spotlight will finally pierce the preternatural darkness of the universe of embedded systems. The first systems to get attention will be items like emergency systems. "Emergency systems are date sensitive but are high profile and probably won't be too much of a problem," says Heffner. "Everybody talks about hospital ICU wards going berserk and killing people but I don't think so."

But he adds that lower profile gadgets like watches, manufacturing machinery, warehousing automation, jet airline engines, and even retail point-of-sale machines might get left out of the inventories companies do when they begin their Y2K compliance efforts. "People don't realize how many embedded systems are out there," says Heffner. "A lot of people haven't looked at the code for four or five years. People are going to forget that they even have them."

The more sophisticated companies will realize that the Y2K problem is really a reflection of a bigger problem: bad codes. "The problem is actually not the two digits; it's the shape the world's code is in," says Heffner. "Most experts estimate that 90 percent of the code in the world is in bad shape. What the Year 2000 problem does is, it forces substantial changes to almost all existing code. When code is changed, if it's not robust, it breaks. There are a lot of programming shops that are scared to death to touch their code. The situation is like building on a fault line with shoddy construction techniques: you're fine until the earthquake hits. People don't realize just how many bugs there are in code."

Some of the panic will be calmed by the use of automated Y2K agents. "The problem with that is even if you have the money to pay for it you don't have enough time," says Heffner. "You can't find enough COBOL programmers to do the job. What it's going to take is automated systems. More people realize it's the only possibility for getting the job done in time."

The total Y2K bill will go up. In 1997 the experts were estimating the total cleanup would cost $600 billion. Now some are upping that figure to $1 trillion. Heffner agrees with them.

The Y2K world will get even more litigious. The projected bill is now hovering around $100 billion, and Heffner predicts that the legal issues will eventually get to the core of the issue. "If the users of computer programs point the finger at the missing two digits of the year, the programmers will say `You never said the code should be usable through the year 2000!'" he says. "But I think the real litigation issue will turn out to be not so much the missing digits as the sorry condition of the code." But regardless of the outcome, lawyers will do well, he says.

Some Y2K-like computer chaos will commence early. Heffner explains that too many programmers have been in the habit of affixing the numerals "99" to signify unknown dates in programs. Guess what? The time to pay that particular bill is just around the corner. "Most of the software in the world doesn't have that long a view on time," he says.

Since the Y2K problem is unique to human history, be prepared for any range of consequences. "It is a condition that has never occurred in code before, because we didn't have code in 1900," he says. "This is the first time in the history of programming we've had a change in century, much less a change in the millennium. "

So, for 1998, at least, the key is to do away with denial and get to work. But in some ways, Heffner warns, this goes against the grain of programming instinct. "A programmer doesn't want to admit to his boss that the code's in bad shape."

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Quality New Jersey

Unlike the ISO 9000 certifications that some firms are required to comply with in order to compete in certain markets, a firm can choose whether to compete for the quality award known as the Malcolm Baldrige National Quality Award. "The good thing about Baldrige standards is that they have a set of core values, and if you don't believe in core values you don't have to play the game. All the ISO ideas are included in Baldrige, but it has much more -- such as how you deal with people and leadership," says Richard Serfass, executive director of Quality New Jersey.

Quality New Jersey is one of the 53 state and city organizations that established quality programs. It is an all-volunteer nonprofit that offers New Jersey businesses quality management and continuous improvement programs. It uses the national Baldrige standards, as decreed by the federal Commerce Department and approved by Congress. National categories include small business, large business, and service businesses, but New Jersey also has categories for education, health care, and government.

Those who want to embark on the quality voyage can take classes at a Central Jersey location. An orientation to the award process is Thursday, January 22, and costs $40 for non-members. It repeats February 18 and October 22. You'll learn about the Baldrige categories and their "excellence indicators," identify priorities for performing an organizational self assessment, review application requirements, and study how the feedback report can be used for self improvement.

A self-assessment workshop is for an organization that plans to start a management program based on the NJQAA/Baldrige criteria -- or for ambitious people who want to school themselves in a job-enhancing skill. It costs $74 for non-members and is given January 20, April 21, July 21, and October 20.

To learn how to actually write the application, attend a $40 seminar on January 29, February 25, or October 29. Call 609-777-0940; fax 609-777-2798, E-mail

Need inspiration before you sign up? Quality New Jersey's 278-page Networking Directory contains names and profiles of businesses that have successfully used business improvement practices, organized by business categories, with a section on continuous-improvement resources. By profiling successful organizations and identifying the business management tools they have used, the directory helps other organizations by giving them names of companies they can use as benchmarking and networking partners. To get a $38 copy, send a check (payable to Quality New Jersey) to Paul DeBaylo Associates, Box 3767, Princeton 08543, or call 609-497-1992.

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Schmooze by Rail

What February would be complete without the New Jersey Chamber's train ride to Washington? This year's is Thursday, February 5, and will definitely vie for networking event of the year. Imagine being sequestered cheek-to-jowl with 1,200 business executives and government officials, as well as special guest Morley Safer of 60 Minutes' fame, who will be hobnobbing his way up and down the cars as it hurtles to the nation's capital. The train leaves Newark at 11:15 a.m. Stops include Metro Park, New Brunswick, Trenton, Philadelphia, and Wilmington.

The full ticket costs $375 and includes the state chamber's reception and dinner honoring New Jersey's Congressional delegation at the Sheraton Washington Hotel with entertainment by Mark Russell, the political satirist.

For information, call the state chamber at 609-989-7888. The train returns late the next morning, and post-dinner hospitality suites and breakfasts happen at the hotel are all part of the tradition. Guests are encouraged to reserve rooms in the Sheraton Washington (202-328-2900).

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