Banking

The recession and your career as a leader

Today, more than ever, many leaders are finding themselves out of work. Executive and leadership coach John M. McKee provides some ideas about what to expect in the future and how to deal with today's situation.
"Am I screwed? I've been with the same company since graduating, for 10 years. Two years ago, I got into management and realized that I like leading others. I'm good at it. So, things looked great until the economy tanked. Now it looks like this company's going to fold, joining other organizations in this city, which was once a great place to live and work. I'm stuck - don't want to move but can't afford to stay here. Can you help, John?"

That was an actual voicemail left at Business Success Coach.net. If you, or a friend, haven't said something similar to the above; consider yourself fortunate. And hope that your situation remains stable because, for many organizations, survival will remain tenuous even after the recession ends.

To survive this downturn, many companies have had to cut employee numbers, their marketing costs, travel, important R&D investments, capital investments, office space and anything else deemed necessary to, "get through this period". Many have done this in the belief that at some point, things will return to "business as usual". And that, is a big mistake.

After over 30 years in boardrooms and executive suites across North America, I've been through several recessions. I know that, like those, this too shall end. But unlike previous recessions, many of the temporary changes undertaken by various companies will soon become their permanent way of doing business. There are a number of reasons behind why the recovery won't bounce back to the conditions of previous times or before the markets tanked last year. Here are several:

1. The world is much more inter-related this time. Here's one easy example - It would have been unthinkable that the nation's largest employer industry, car makers, would have to start "outsourcing" many critical functions (such as: electronic components, design and manufacture of whole interiors,) to other companies; decisions being made by foreign interests as well as the US/CDN Governments. More than just UAW members, this industry a wide swatch of professionals including engineers, chemists, R&D experts, marketing and sales executives, designers, IT pros. It has multiple layers of management in most areas. Many of these people are now unemployed and will seek jobs in other industries. The model that H-P has used successfully where they contract plants to make for them, and putting their brand of products made outside of their own organization will become a model for many industries - including the auto sector but not limited to it.

We'll have more talent on the market but less demand at the employer organizations.

2. Deflation and inflation. Whether one supports the idea that the US and other governments needed to bail-out banks, car makers, and other industries, it has and will be a tremendous debt for years to come. Combined with the stimulus packages created by most industrial nations over the past 12 months; the debt load of many countries will take a long time to come down. As a result of the need, the US has been printing money like there's no tomorrow. One consequence is that the value of the greenback (when compared with most other currencies) has fallen over the past 6 months. That fall will continue. Additionally, according to Forbes Magazine, June 8 issue, Spain is already showing obvious signs of deflation with the price of a loaf of bread down to US 60 cents this week and rental homes in Tokyo are down 10% this year. More evidence of deflation will come. When prices start to erode, companies struggle to maintain their profits. That means more headcount cutbacks. This time, I expect a double-whammy to occur in the marketplace with the Federal Bank attempting to raise money by increasing it's interest rates on T-Bills; causing money to get harder to borrow for many companies.

Less hiring will be one result.

3. Consumer spending won't return to previous levels. In the past, much of the world economy was fueled by US consumers who had access to easy money and bought pretty much whatever they wanted. For most of this decade counterparts elsewhere, including China and India, joined them. However, overwhelmingly, it was always the Americans who were the big drivers of spending and the corresponding manufacture demand - regardless of location. Now, recent stats show that the wild-spending days have been left behind by Americans: levels of savings are creeping up, credit is harder to get / use, and a new mentality is developing. It's almost cool to not-buy whatever one wants. Retail sales continue to be below last year. Smart companies including Cisco and Charles Schwab and others who rely on consumer spending are developing action plans based on the assumption that this environment may be the "new reality".

Organizations dependent on retail or corporate purchasing (pretty well everyone from Sun to Target) will outsource more to keep "fixed" costs more manageable.

So, what's a leader to do? What can you do? First, come to grips with the fact that any "permanent job" with a company is really only a temporary job that comes with a health plan and some other benefits. No one is safe or guaranteed employment any longer.

This may mean reinventing yourself. At the very least it probably means reconsidering your career plan. And if you don't have a plan for your career and your personal life - it's high time!

Then, rise to the challenge. Take advantage of this new reality and quit looking for a job just like the last one you had at a company that does something very similar to where you worked before.

It's time to act like a leader. If you prided yourself on being able to lead others through problems, start doing the same thing for your career. In past tough situations you've probably told your team members to consider new options. Take your own advice.

john

Career Coach

About

John M. McKee is the founder and CEO of BusinessSuccessCoach.net, an international consulting and coaching practice with subscribers in 43 countries. One of the founding senior executives of DIRECTV, his hands-on experience includes leading billion d...

11 comments
BALTHOR
BALTHOR

I have uploaded to Speedy Share some Google Earth KMZ files.These files when double left clicked call up various locations on the Earth.I have titled these locations as I have perceived them to be.The KMZ files are in a zip folder.If the zip folder is placed on the Desktop a right click of the folder will allow you to Extract All to the desktop. http://earth.google.com/ http://www.speedyshare.com/900597135.html

eohrnberger
eohrnberger

Many are outraged that the H1B Visa counts are as high as they are. Many don't know that many of these visas are going to newly graduated engineers and technical people as they are graduating from college and are recruited by business. I'm OK with that. But the whole sale importation of less expensive labor from over seas just because it is less expensive labor, displacing American citizens out of jobs has got to stop. Why are we cutting our own throats? Some comments here down play the role of a leader in an organization. I don't think that this is realistic. There have to be leaders and leadership applied in an organization, otherwise nothing would get done. The entrepreneur can dream up all kinds of innovative things. He's going to need someone to guide that dream into reality. Between the entrepreneur and the technical people is some sort of technical management. Someone equally comfortable in the business and interpersonal arena as well as in the technical arena. Are the days of single company life long employment over? Probably. Pundits have been predicting the migration from industrial area employment model to the Hollywood employment model for at least 10 to 15 years now (Google 'nature of work'). This last downturn has given it one great big shove into that direction. There is a reason that Americans innovate as much as they do and are as flexible as they are. We are raised that way. We don't have a coddling cradle to grave nanny taking care of us. We take care of ourselves because no one else will. This pays off in people that are very adaptable and do whatever it takes to survive, rather than sitting on our duffs waiting for someone else to do something for us. Large portions of the earth's population isn't raised that way. Other large portions are. How many unemployed IT people that you know have tried but failed to land a job with a companies, and are now scrambling and starting their own IT consultancies? That typically doesn't happen everywhere, but it does here, and we need to keep that part, and support it. It is our cultural differentiator.

Steve Romero
Steve Romero

If you had just posted the message without noting it was a voicemail I would have guessed the conversation took place decades ago. (I really appreciate your patience with others Toni. This makes it possible for you to pass on sage advice while others like me just sit there with their jaws agape.) The days of "permanent jobs" are SO long gone! I was considering alternative career paths and tactics in 1980! It was that year I began to fear that computer operations might be a dead-end and I should venture into this new thing called "telecommunications." I stopped supervising tape mounting and starting playing with AT&T 1200 Baud modems the size of toaster ovens. This current downturn pales all others. It should settle once and for all any mistaken notion of stability in almost any job market. I hope everyone who hasn't, finally comes to the realization that we function in an ever-changing, dynamic, unpredictable, tenuous and frequently unfair work environment. The walls will cave in on us, the ceilings will crash down on us, and the floors will fall out from beneath our feet. We all need to be ready. Steve Romero, IT Governance Evangelist http://community.ca.com/blogs/theitgovernanceevangelist/

santeewelding
santeewelding

Learn anew. Learn how to grow vegetables. Forget the crap about "leader" (I have never, never understood that word).

boxfiddler
boxfiddler

Isn't that an extra bit of fishing line to which weights and bobbers and lures attaches?

gipit33
gipit33

Stop this darn outsourcing, I have a degree in networking why is someone from INDIA stealing our future!? I say a MASSIVE tax should be levied on all that outsources. Am I bitter? Hell yes! So let me get this right not only do I get a pink slip and my insurance is MY RESPONSIBILITY NOW!? My word what happen to taking of our own citizens? Do you know how hard it is for any other nationality to work in any country outside their own. We need that here! I never thought I'd be saying this but I don't like East Indians very much.

a.barry
a.barry

I would have to agree with you on one point - we need to make it possible for individuals to buy health insurance (I assume that's what you're talking about) at a reasonable rate without having to work for someone. Perhaps then hiring Americans wouldn't be so expensive. As for the rest of your rant - get used to it! Not too long ago, everything you could see from where you were sitting was probably made in the USA. Now - you have to look hard. I wonder if all the factory workers felt the same way you did?

CareerCoach
CareerCoach

Waiting for others to look after them is not what leaders do.

Jeff Mowatt
Jeff Mowatt

That's a question we asked about a year ago when the sub-prime crisis began to unfold on us. Those who've seen Paul Grignon's video 'Money as Debt' may know what I'm talking about, where greed in the pursuit of abstract numbers trumped people. As a software business we deliver advocacy for social reform, like this: http://www.p-ced.com/about/background/ Jeff Mowatt

SilverBullet
SilverBullet

,,,,, that is not new. My great-grandparents came to the US in 1880's from Sweden with nothing but a solid work ethic and the clothes on their back. They took matters into their own hands and created a standard of living that exceded all their expectations. We are looking at a new era. America in the past looked to their govenment for military and police protection, and a sense that a common good would evolve into an organized group of persons associated together for religious, benevolent, cultural, scientific, political, and patriotic purposes. Today, the government is looking for Americans to support their ill fated financial crisis and put that burden right in our laps. Our government no longer works for us, we work for the government that has our hands, our children's hands and their children's hands tied to their fiscal future.

brian.handel
brian.handel

When your grandparents came things were a little different. On top of that you're wrong with regards how our government serves the common good. The US Government was empowered to do more then be just a military and provide police protection. Free public education, making sure our food was safe, keeping the free market free, fair and just. People need to quit focusing on the numbers. Yes they count but so does investing in America. Having a safety net for people is a sign of a civilized country. America was not built on social Darwinism. When people migrated out to the American West they did it in groups. You couldn't do it on your own. Quit looking at the US Government being the problem. Sometimes they are the solution. And just to know what our government did right. We went to the moon! America needs to find a new frontier. We are all in this together.