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.
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.