Leading In Boom and Bust Cycles

Here's an interesting article by Pankaj Ghemawat in the MIT Sloan Management Review discussing how managers can balance the financial risk of investing with the competitive risk of not investing during an economic downturn. Some key findings:

• The competitive risk of not investing can be higher than managers think.

• Knee-jerk cutbacks can do more harm than good, especially around choices involving your employees.

• Downturns can provide opportunities to buy assets at bargain prices.

• Judging whether investment is cost effective needs to encompasses competitive and financial considerations rather than just the one or the other.

It's tough to be an executive trying to decide whether your cost structure and investments are aligned with market realities, especially in an era where doom and gloom media literally surrounds you 24x7. This article does a nice job emphasizing the importance of having a very clear competitive strategy and the need for continued investment to grow that differentiation and value. This becomes especially important during economic bust times because others may pull back, allowing leaders to continue investing even modestly and come out with a much better competitive position. This is true of assets but especially true of employees, all of whom carefully watch how leaders respond in challenging times and who can be fantastic sources of innovation and efficiency. Loyalty is very much like competitive position - it's relative to the options available to employees, so the more leaders treat employees like valuable assets the more likely they will stick with the organization when the boom cycle returns.

Pay Your Employees To Interview?

Do your employees love working at your organization enough that you could give them a paid day off each year to interview at other organizations and they'd still stay with you?

That's right - pay your employees to interview at other places and report their findings to the team. If you're doing everything right as an employer you should actually increase employee commitment because there will be proof that the grass is not greener on the other side. Your employees ideally will bring back great ideas that can be applied at your firm. One caveat - employees should be up front with any employer about the nature of the dialogue. This could be something as simple as "My employer encourages everyone to benchmark us against other employers".

Leaders who see their employees as volunteers generally invest more energy into creating a culture that causes people to want to give their best, stay and recruit others. Many managers will say that there is no way they could do this - employees would literally jump ship and/or come back asking for a pay raise, more responsibility,etc.

Guess what? That just may be the fire you need to light underneath your managers to get them to act like employees truly are volunteers. I agree that if you simply started doing this out of the blue it would be bad news. However, if it's part of a broader initiative to become an employer of choice - however you define it - then involving your employees in the transformation, including something as empowering as external benchmarking, is likely to be a huge step towards higher engagement and retention.

Jung At Heart: Thoughts On Turning 41

I turned 41 today and wanted to share some thoughts on life, aging, and family using the philosophy of Carl Jung as a metaphor. Bear with me - it's only slightly geeky.

Jung believed people have two primary mental functions: taking information in and making decisions. He also believed that people were predisposed towards an orientation to the outer world (extraversion) or the inner world (introversion) and that the interactions between those preferences, especially the priority relative, influenced how you lived your life. Isabelle Myers and her daughter Katherine Myers-Briggs were fascinated by these concepts and built on his work to create the Myers-Briggs Type Indicator (MBTI), represented by those famous four letter combinations (INFJ, for example) that represent your four preferences.

Jung wrote that the first half of life is when you learn to comfortably use your primary and secondary preferences. The second half is where you learn to have a broader perspective about, and comfort with, all four of your preferences and will likely begin to more heavily lean on the lesser used preferences. The shift from the first half of life to the second half of life can be a major point of reflection, transition and gateway to powerful personal development and additional happiness.

I was certified in MBTI last week and it caused me to reflect on my own journey and I encourage you to do the same. 2008 was full of huge change - I turned 40, lost my Dad, quit my job, changed careers, and started my own company in the middle of a global recession. It's interesting - and often embarrassing - for me to look back at various situations and interactions and see how I have changed over the years. You learn slowly that there is no out-running your personal demons; you need to embrace the whole you, insecurities, needs, ideas, wants, and all and consciously learn to interact with others in a more balanced way.

Jung's theory is very motivating to me, especially as someone with an INFJ preference. We can come up with big ideas but we can also come across as aloof, head-in-the-sky, overly sensitive dreamers. Launching my own business and working with leaders of small and medium sized organizations has allowed me to use my other functions, namely clarifying my thinking and recommendations, growing my self confidence, and generally enjoying developing all sorts of new skills, knowledge, and relationships. My fantastic life partner Mark, someone with common values but a different approach to life, has helped me lighten up, laugh, and more fully appreciate the value of balance.

Thinking about the second half of life can be a bit daunting, but my suggestion is to focus on the legacy you want to leave for others. It could be something tangible, like volunteering, or creating or growing an organization, or it could be the way you interact with others over the course of your life. There really doesn't have to be any one "thing" but there is one truth - life is only really meaningful when in service to others.

The opportunity to give to others is a gift and I find it inspiring that the lessons learned in my first half can be better applied towards leaving a fantastic, loving, legacy to others. Here's to the second forty+ years!