Coaching Tip: The Leadership Blog

Changes in the Workplace Require Different Minds

In a ruthless, globally competitive market, companies cannot afford the luxury of holding onto more employees than they need.  With economic constraints and technological advances, some jobs are being eliminated completely — a trend that will surely continue.

A new generation of sophisticated information and communication technologies, together with new forms of business reorganization and management, is wiping out full-time employment for millions of blue- and white-collar workers.

What does this mean?

There is work, but it’s not the same as it used to be.  There are jobs, but not the same ones offered a few years ago.  And unless you want to go after menial work, you’ll need to acquire a disciplined education and variety of experiences, while also developing a highly valued mind.

To adjust to these changes, corporations are engaging outside executive coaches to help management adjust to this new workplace by becoming more effective in coaching and mentoring their direct reports.

Our Mind(s) Matter

In Five Minds for the Future (Harvard Business School Press, 2007), noted psychologist Howard Gardner says our mind — actually, minds — matters. We achieve greater professional success by learning how to think and learn in new ways.

Gardner believes five different kinds of minds are critical to remaining a highly prized asset in your organization, especially in times of economic cutbacks.  In the next five leadership blog postings, we will discuss each of these different kind of minds.

  Howard Gardner: Five Minds for the Future [5 MINDS FOR THE FUTURE -OS]

Pay cuts and keeping in touch with the departed

Executives at companies like Hewlett-Packard, New York Times and Best Buy are slashing pay.  Many companies are sending centuries of experience out the door.  And yet, if they keep ex-employees on alumni networks, they retain a link to that knowledge.

Today, many employees would rather see their direct deposits docked than collect unemployment.  But shriveled paychecks can make corporate strivers feel as if their lives are moving in reverse.   "Employees know their bonus is going to go up and down, but base pay is supposed to be sacrosanct," says Laura Sejen, global director of rewards at employment consulting firm Watson Wyatt Worldwide.  

Some thought leaders in human resources warn that across-the-board pay cuts are anathema to a performance culture.  "The last thing you want is for your A players to leave because you've mismanaged your compensation system," says Mark Huselid, a Rutgers University human resources professor and co-author of the new book The Differentiated Workforce.

Earlier this year, Hewlett-Packard CEO Mark Hurd implemented tiered pay cuts, from as little as 2.5% up to 20%, throughout the ranks.  He shrunk his own paycheck by 20%.   Even when handled well, though, the danger of mass resentment--and an eventual backlash--looms.

If you are about to slash pay at your organization, here are a few things to keep in mind:

Be Transparent by explaining the reasons for the cuts and how long they'll last.

Go Surgical--Don't dock the pay of your superstars.

Give Back--Try time off, more flexibility, even promotions that may be in name only.

For those who leave the company, don't burn relationship bridges.  Keep in touch with former employees who might end up as business partners or even return as employees.  Steer them to "alumni" social networks.  Much like Facebook or LinkedIn, offer former employees and retirees a place to establish profiles and friend lists, share news and ideas with ex-colleagues, and participate on blogs and message boards.  Unlike the big public social networks, the company site can feature industry news and job leads.  Guide alums to reunions and company events--even offer deals on health insurance.

Alumni networks follow a tenet of the knowledge economy: Personal connections transcend corporate boundaries.  With their alumni networks, corporations attempt to dissolve those boundaries themselves, establishing for each company a broad network of people who can keep in touch throughout their careers to benefit from each other's knowledge and contacts.

Source: BUSINESSWEEK, May 4, 2009

How to get a job interview

With four unemployed people looking to fill each job opening, it's rough out there.  Not only is the unemployment rate the highest it's been in 25 years, but the situation is deteriorating fast.  This is not your run-of-the-mill recessionary job market.

If unemployment nationally hits 10% later this year, the country will have seen the fastest rise in joblessness since the 1930s.  What's more, as you've no doubt noticed from talking to neighbors and friends, the phenomenon is hitting a broad swath of the population: The unemployment rate of college graduates, 4.1% is the highest on record.

At this pace, economists at the left-leaning Economic Policy Institute estimate that in 2010 fully one-third of the U.S. population will at some point in the year be unemployed, or working part-time when they'd rather be full-time.  It's enough to drive the average job seeker to distraction.

Where is Twitter headed?

Twitter is a social networking application that enables users to post short text messages, called "tweets," of no more than 140 characters on their personal feed.  These real-time diary entries can then be read by other users, called "followers," who have subscribed to that page.

Under the guise of a fun communications tool, Twitter is building one of the world's most valuable real-time information caches.  And as Twitter's profile continues to explode, many wonder whether the company will ever find a revenue model.  Others speculate about who will buy the young company.....although Google seems to be the leading candidate.

The social power of Twitter surfaced when co-founder Christopher Isaac "Biz" Stone attended a tech conference, "I found myself watching groups of people twittering each other to coordinate their actions--which bar to go to, which speech to attend--and it was like seeing a flock of birds in motion." 

But Twitter is much more than a novel way to share updates of one's daily life with friends.  It's now reached its tipping point and evolved into a powerful new pomotional marketing and communications tool.  Regional emergency preparedness organizations are looking at Twitter as a way to reach millions of people during a disaster.  NASA is using it to regularly update interested parties about the status of space shuttle flights.  And one journalist successfully solicited help from fellow Twitters to get himself out of an Egyptian jail.

Co-founder Evan Williams says that the amount of money it would take to buy Twitter right now is more than any company could justify to its shareholders.  For now, Messrs. Williams and Stone are keeping their plans secret.  With patient investors who just put in $35 million in third-round funding, the company is in no hurry.  Mr. Stone will only say that "we are enamored with the idea of going all the way."

Source: The Wall Street Journal, April 18, 2009

Risk, Uncertainty and Success

For many companies, recessions are a time when short-term considerations trump long-term potential.

This has something to do with a famous distinction that the economist Frank Knight made between risk and uncertainty.  Risk describes a situation where you have a sense of the range and likelihood of possible outcomes.  Uncertainty describes a situation where it's not even clear what might happen, let alone how likely the possible outcomes are.  Uncertainty is always a part of business, but in a recession it dominates everything else: no one's sure how long the downturn will last, how shoppers will react, whether we'll go back to the way things were before or see permanent changes in consumer behavior.  So it's natural to focus on what you can control: minimizing losses and improving short-term results.

Yet, the uncertainty of recessions creates an opportunity for serious profits, and the historical record is full of companies that made successful gambles in hard times: Kraft introduced Miracle Whip in 1933 and saw it become America's best-selling dressing in six months; Texas Instruments brought out the transistor radio in the 1954 recession; Apple launched the iPod in 2001.

In the Great Depression, Kellogg doubled its ad budget, moved aggressively into radio advertising, and heavily pushed its new cereal, Rice Krispies.  By 1933, even as the economy cratered, Kellogg's profits had risen almost thirty percent and it had become what it remains today: the industry's dominant player.

Numerous studies have shown that companies that keep spending on acquisition, advertising and R&D during recessions do significantly better than those which make big cuts.  Hyundai has made huge gains in market share this year, thanks to a hefty advertising budget and a guarantee to take back cars from owners who have lost their jobs.  Those gains may turn out to be temporary, but in fact the benefits from recession investment are often surprisingly long-lived, with companies maintaining their gains in market share and sales well into economic recovery.

Source: James Surowiecki, THE NEW YORKER, April 20, 2009

The Great Battery Race

Because battery technology will become the core competency that defines the modern car company, it will hardly be the kind of intellectual property you'd want to outsource to a foreign auto supplier. 

For America the ultimate irony is also the ultimate humiliation: Just as the electric car is finally arriving to save Detroit, the U.S. is poised to swap our dependence on foreign oil for a dependence on foreign batteries.

Conventional Economic Wisdom

Are economists overconfident, unrealistic and political?  Why are those few, who defy the conventional wisdom, ignored?

Why don't we listen to critics like Nassim Nicholas Taleb, the scholar of rare events who wrote Fooled by Randomness and The Black Swan, who says: "We have to build a society that doesn't depend on forecasts by idiotic economists."  Says Paul Wilmott, a quantitative finance expert: "Economists' models are just awful.  They completely forget how important the human element is."

Because they are trained to think of financial markets as efficient, most economists weren't primed to spot the dangers posed by lax mortgage lending, overleveraged financial institutions, and impenetrably complex derivatives.  The easiest criticism of macroeconomists is that nearly all failed to foresee the recession despite plenty of warning signs.

Reciprocity in Tough Times

Are you putting the Law of Reciprocity to work for you?

Reciprocation flows from Divine Law that can neither be ignored or put aside. Perhaps, the most important of these laws is the 'law of love.'  Put simply, "Love is Law, Law is Love. God is Love, Love is God." This amounts to the same thing as "the gift of giving" without the "hope of reward or pay," or serving others.

This 'law of love' is identified in many different ways--for example, in Wayne Baker's new bestseller, "Achieving Success Through Social Capital" (Jossey-Bass), this law of love in the workplace is described as the "law of reciprocity."

The law of reciprocity is not what can best be described as "transactional reciprocity." Baker says that, "Many people conceive of their business dealings as spot market exchanges--value given for value received, period. Nothing more, nothing less. This tit-for-tat mode of operation can produce success, but it doesn't invoke the power of reciprocity and so fails to yield extraordinary success."

If you could do one thing for your customers, family or friends, what would that be?

How could you help people who are unemployed but want to work?

What is the power behind your business and social relationships?

What fuels social networks like FACEBOOK, MySpace, Twitter, Ning, etc.?

"One of the most potent of the weapons of influence around us is the rule for reciprocation. The rule says that we should try to repay, in kind, what another person has provided us."

Robert B. Cialdini, author of The Psychology of Persuasion (William Morrow, 1993)

Cookbookish Leadership

Cookbookish leadership doesn't work when you are following someone else's recipe.

Perhaps, a quote from Dr. Maxwell Maltz of the Psycho-Cybernetic Foundation, about the need to focus our internal energy to make the changes we desire, says it best… "Trying to implant a goal that is incongruent with the self-image is like trying to plant grain by dropping seeds on rock hard bone-dry ground.  This happens when a person tries to make a goal that they are not.  No one can consistently out perform his or her self-image. No one can long overcome it with willpower.  No one can sneak past it and perform in an incongruent manner.  The bottom line is that you cannot 'do' things without 'being' the kind of person who does those things. You must 'be' to 'do.'"

Something that works well for a leader in one company is not easily replicated in another.

Many leaders are rejecting benchmarking--the practice, promoted by many big consulting firms, of adopting the best-practices from high-performing companies such as General Electric Co.  Leadership transition does not happen by simply taking someone else's leadership approach and using it as a template in one's organization.

When Jacques A. Nasser, Ford Motor's ex-CEO, quickly implemented a General Electric-style performance evaluation system in the late 1990's, the new forced-ranking system resulted in a $10.5 million settlement of two class action suits with the company slipping into a crisis management mode of operation.  By attempting to copy Jack Welch's performance management system without a clear understanding or building the foundation for implementation, Nasser and Ford experienced unintended consequences that sent the company reeling.

At Enron, CEO Jeffrey Skilling meant to encourage risk-taking through a new peer-review system (adapted from his former consulting firm employer) where a performance review committee (PRC) ranked more than 400 vice presidents, directors and managers. The decisions of the PRC greatly affected the bonus and stock option grants of the person being reviewed. In practice, the management evaluation system bred a culture in which people were afraid to get crossways with someone who could screw up their reviews.

Just like at Ford, Enron's copied employee evaluation system rewarded highly competitive people who were less likely to share power, authority or information-which undermined any teamwork or institutional commitment and created unintended corporate consequences.

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Hope and Help for the Jobless

Over the past decade, U.S. businesses increasingly have relied on leased-employees or contract workers as a way to keep a lid on health-care and retirement benefit costs while maintaining flexibility to adapt to economic conditions.  Now U.S. employers are casting off temporary workers and freelancers.  The people who lose their jobs are forced to cut spending drastically and have little savings to fall back on.

The downturn in the labor market is fast becoming the worst since the 1930s.  Of 5.1 million jobs lost since December 2007, 72% have disappeared in only the past six months, with more losses to come.  The jobless rate, already up 4.1 percentage from its low point two years ago, is well on its way to surpassing the trough-to-peak rise in the 1948-49 recession of 4.5 points, a postwar record.  The key question is: How high will the unemployment rate go.

Here in the U.S., the cutbacks mean the labor market is in much worse shape than the 8.5% jobless figure for March 2009 would suggest.  Throw in part-time workers who would like to work more and unemployed workers who have given up their job search, and you come up with a jobless rate closer to 15.6%, according to one measure buried in the Bureau of Labor Statistics' monthly Employment Situation report.

So what's a jobless person to do to find work?