Incessant Change is the Norm

You have to read this white paper on change. It is exactly what I have been talking about for the last 20 years as companies go through evolution and economic change. some do and some don't. The ones that don't will not be a company you should either invest in or work for.

Change is permanent – it does not matter what industry you may be in, how large your enterprise, or your organizational structure. Globalization, technology advances, complex multinational organizations and more frequent partnering across national borders and company boundaries – these are just a few of the enablers and accelerators of change.

How would you rate your organization when it comes to executing change? Most CEO's consider themselves and their organizations to be executing change poorly, yet a few outperformers do excel at delivering and benefiting from meaningful change. You need to become an outperformer to learn to manage change well, so you can get ahead of, and even be the driver of change. To accomplish this, you will need to abandon outdated notions of change. You no longer have the luxury of expecting day-to-day operations to fall into a static or predictable pattern that is interrupted occasionally by short bursts of change.

Where do you see your enterprise in the next few years? Leading your competition in growth and revenue? Developing a highly new innovative product or service? Re-inventing and redefining your industry? Or will your organization remain static, struggling to keep up with your competitors, and staying afloat?

For its very survival, the Enterprise of the Future must better prepare itself as the pace, variety and pervasiveness of change continue to increase. Discover how to become a "student of change" in a world of total flux.

To download a copy of this new research paper, please click here:
www.ibm.com/gbs/makingchangework

The Leadership Skills Needed in Global Companies

I think this article that was published on TalentBar December 22nd has great value to anyone who manages a global company as you look to identify and grow managers and leaders.

The Challenge: Increased Globalization

In today’s borderless marketplace, it is becoming more and more common for managers to have responsibilities that include teams in multiple countries, regions and even continents. Besides the obvious logistical and technical challenges this poses, there are also numerous people–related challenges. Fostering collaboration, aligning organizational objectives with departmental and individual objectives, and motivating others to perform is hard enough when you see the people you manage every day and speak a common language. When you don’t, the task can feel impossibly daunting.

Key Leadership Skills:

The Ability to Manage Remotely
In a globalized business environment, leaders must learn the skills necessary to manage from afar. The most successful leaders understand that micro–managing employees is counterproductive. With a geographically dispersed workforce, it isn’t even an option. As such, global business leaders must have the ability to manage, develop and empower others to make business decisions that are not only sound but closely aligned with over–arching organizational goals.

It is fundamentally important that remote employees understand what they are working to accomplish and how it relates to the larger organization’s objectives and strategy. Culture and language differences increase the likelihood of miscommunication, and distant employees don’t have the luxury of walking down the hall to seek clarification. It is therefore imperative that global leaders be skilled at surfacing and testing assumptions in ways that encourage active dialogue rather than passive compliance in an effort to ensure understanding and foster agreement before they ask employees to execute their plans.

Creating Trust and Commitment
For a long–distance working relationship to succeed there must be a great deal of trust and commitment between both parties. These attributes must be earned over time through consistent and deliberate demonstration. Being a leader of a global business requires the ability to foster trust and credibility in ways that do not depend on having proximate relationships. This ability requires a deep understanding of individuals since intuitive skills are not enough. Managing from afar, global leaders cannot rely on ‘reading’ someone’s reaction. They must be able to understand and anticipate universal, but often unspoken, needs and interests. They must also be skilled at communicating in ways that resonate deeply and assure employees that their interests are being considered and protected.

Self–Awareness
Self–awareness is the foundation for any leader’s development and is critical to their ability to achieve success. Leaders who are responsible for motivating and managing people on the other side of the world must possess advanced leadership ‘soft skills’ – skills that are not mastered by reading books or attending seminars; skills that are sustained through continual feedback and reflection. Leadership ‘soft skills’ are developed through hard work that begins with self– awareness. Leaders who understand and are honest about their own needs and interests as well as their strengths and weaknesses will be far more able to convincingly speak to others in ways that build and foster trust and commitment. To develop these competencies, many organizations are leaning heavily on tools and systems that provide immediate feedback. These tools, such as 360–degree feedback, break through powers of denial and help leaders align their self–awareness with others’ perceptions. Unfortunately, these tools, which can be extraordinarily beneficial to leadership development and overall organizational strength, are typically used too infrequently.

Giving and Receiving Feedback
It is no longer sufficient to receive an annual performance review that vaguely links our actions over a 12–month period to the organization’s performance and results. These reviews fail to teach us how our behavior directly impacts others – and the organization – on a daily basis. In an era when organizational change is constant, feedback should be equally constant. To truly develop self–awareness, leaders need opportunities to receive feedback about their behavior and management ability in ‘real–time’. The power of this ‘in–the– moment feedback’ is well documented in psychology and has proven to be one of the most effective ways of evolving behavior. Many people don’t feel comfortable or skilled enough to freely give and receive candid, and often personal, feedback. Yet, fortunate leaders receive it frequently in more structured, albeit less natural, forms designed to build their self–awareness and further develop their interpersonal skills. Leadership development programs provide opportunities for leaders to practice giving and receiving feedback through videotaped interactions, role plays, and candid discussions. There is perhaps no more powerful reality check and learning tool than having a group of peers stop a videotape of their manager talking to a subordinate and say, “There! Do you see what you just did? When you do that, it causes people to not want to follow you.” The more opportunities leaders have to give and receive this kind of feedback, the more likely they are to model it for others in their organizations. Over time, this can transform an organizational culture and help equip individuals with the self–awareness and interpersonal acumen they need to perform and succeed, which ultimately benefits the organization.

Do you agree or disagree and what are your opinions on this subject?

What HR Will Look Like in 2010

Earlier this month I indicated that I would identify 5 major changes to HR that will dramatically change how HR professionals do their work. Some are top of mind, some on the cusp of change, and some you have not seen yet. Here they are in no particular order:

1. Administrivia will reside fully with managers and employees through self service and HRIS systems will be a thing of the past for HR. There will be no such thing as an HR assistant or administrative assistant in HR.
2. HR as we know it will become a profit center and be measured on profit success.
3. Entire benefit packages will totally be outsourced to third party vendors and employees will have an a la carte menu. Health care providers will provide light workout equipment that is ergonomically designed to fit in the workplace so workers can get exercise and work simultaneously.
4. There will be at least 2 senior HR professionals today that will run companies in excess of $100M by 2010.
5. All data will flow through handhelds on the go rather than through desktops/laptops and the typical HR department as you know it today will not exist.

You will notice that I did not mention talent management or succession planning. Those topics will be dealt with early in 2009.

What do you think of these changes and do you agree or disagree? I would appreciate your opinions. Please send your comments to wgstevens2@gmail.com.

Eight Worst Things to Say in an Interview - Is This Millennial Centric

I read this on the MSN page today and had to laugh. Granted some of these things are common sense but when you as HR professionals deal with the Millennials Generation do you think all or most of these are still wrong. Given my expertise in managing the 1st onslaught of Millennials these need to be modified for them. As for Gen X, Y, and Boomers most of these would apply. Tell me what you think based on your experience? You should review my post on Millennials dated 5/27/08.

Interviews are nothing if not opportunities to drive yourself crazy. Just remind yourself to look good, appear confident, say all the right things and don't say any of the wrong ones. It shouldn't be so hard to follow these guidelines except you'll be on the receiving end of an endless line of questions. Factor in your nerves and you'll be lucky to remember your own name.

If you walk into the interview prepared, you can make sure you know what right things to say, and you can stop yourself from saying the following wrong things.

1. "I hated my last boss." - Your last boss was a miserable person whose main concern was making your life miserable. Of course you don't have a lot of nice things to say; however, don't mistake honesty, which is admirable, for trash-talking, which is despicable. My question is did he/she understand how to manage Millennials
2. "I don't know anything about the company." - Chances are the interviewer will ask what you know about the company. If you say you don't know anything about it, the interviewer will wonder why you're applying for the job and will probably conclude you're after money, not a career. "With today's technology," Moran says, "there is no excuse for having no knowledge of a company except laziness and/or poor planning - neither of which are attributes [of potential employees] sought by many organizations." My opinion is there is no excuse not to know the company
3. "No, I don't have any questions for you." - Much like telling the interviewer that you don't know anything about the company, saying you don't have any questions to ask also signals a lack of interest. Perhaps the interviewer answered every question or concern you had about the position, but if you're interested in a future with this employer, you can probably think of a few things to ask. "Research the company before you show up," Moran advises. "Understand the business strategy, goals and people. Having this type of knowledge will give you some questions to keep in your pocket if the conversation is not flowing naturally." I wonder how many HR people really know the company outside of benefits and general HR practices. Chances are most interviewees know more than the interviewer.
4. "I'm going to need to take these days off." - "We all have lives and commitments and any employer that you would even consider working for understands this. If you progress to an offer stage, this is the time for a discussion regarding personal obligations," Moran suggests. "Just don't bring it up prior to the salary negotiation/offer stage."
   Why?By mentioning the days you need off too early in the interview, you risk coming off presumptuous as if you know you'll get the job. My opinion is Millennials want time off and this will become common practice prior to any salary negotiations. Don't miss out on a good person. Millennials cherish their time off.
5. "How long until I get a promotion?" - While you want to show that you're goal-oriented, be certain you don't come off as entitled or ready to leave behind a job you don't even have yet. "There are many tactful ways to ask this question that will show an employer that you are ambitious and looking at the big picture," Moran offers. "For example, asking the interviewer to explain the typical career path for the position is fine." Another option is to ask the interviewer why the position is open, Moran adds. You might find out it's due to a promotion and can use that information to learn more about career opportunities. I agree don't put the cart before the horse.
6. "As Lady Macbeth so eloquently put it..." - Scripted answers, although accurate, don't impress interviewers. Not only do they make you sound rehearsed and stiff, they also prevent you from engaging in a dialogue. "This is a conversation between a couple humans that are trying to get a good understanding of one another. Act accordingly," Moran reminds. I agree.
7. "And another thing I hate..." - Save your rants for your blog. When you're angry, you don't sway any body's opinion about a topic, but you do make them like you less. For one thing, they might disagree with you. They also won't take kindly to your bad attitude.
   "If you are bitter, keep it inside and show optimism. Start complaining and you will be rejected immediately," Moran warns. "Do you like working with a complainer? Neither will the interviewer." I think keep your thoughts to yourself and stay on point.

Anthony Balderrama is a writer and blogger for CareerBuilder.com. He researches and writes about job search strategy, career management, hiring trends and workplace issues.

What are your thoughts?

The Future of the Internet III (3.0)

A survey of internet leaders, activists and analysts shows they expect major tech advances as the phone becomes a primary device for online access, voice-recognition improves, artificial and virtual reality become more embedded in everyday life, and the architecture of the internet itself improves.

They disagree about whether this will lead to more social tolerance, more forgiving human relations, or better home lives.

Here are the key findings on the survey of experts by the Pew Internet & American Life Project that asked respondents to assess predictions about technology and its roles in the year 2020:

• The mobile device will be the primary connection tool to the internet for most people in the world in 2020.
• The transparency of people and organizations will increase, but that will not necessarily yield more personal integrity, social tolerance, or forgiveness.
• Voice recognition and touch user-interfaces with the internet will be more prevalent and accepted by 2020.
• Those working to enforce intellectual property law and copyright protection will remain in a continuing arms race, with the crackers who will find ways to copy and share content without payment.
• The divisions between personal time and work time and between physical and virtual reality will be further erased for everyone who is connected, and the results will be mixed in their impact on basic social relations.
• Next-generation engineering of the network to improve the current internet architecture is more likely than an effort to rebuild the architecture from scratch.

More predictions about the evolution of mobile communications can be found here

More elaborations about the evolution of intellectual property law and copyright protection can be found here

More elaborations about the evolution of augmented reality and virtual reality can be found here

More elaborations about the evolution of the internet's user interface can be found here

More elaborations about the evolution of the internet's architecture can be found here

More elaborations about the evolution of the internet's impact on work and leisure can be found here

(12/14/2008 Report Janna Anderson Lee Rainie)

So what are your thoughts on Internet 3.0?

What Breakthroughs in HR will Occur by 2010

In my next post, I will predict what breakthroughs will occur in human resources and what all HR practitioners will need in their toolbox to remain competitive. In the meantime, read the latest edition of Workforce and let me know what you think will be 5 great changes in our industry.

Please let me know your thoughts at wgstevens2@gmail.com.

Don't Fear the Whitewater- Don't Use a Life Vest Either

Change is the new status-quo, and success at work will require agility, talent and the ability to learn from -- rather than fear -- failure, according to Gregory Shea, adjunct professor of management at Wharton, and business writer Robert Gunther. The two recently co-authored a book titled, Your Job Survival Guide, a Manual for Thriving in Change. The authors compared the economy and job market to a whitewater river in which every kayaker is certain to spend a significant part of the journey under water.

If you look back at my post regarding job retention you will notice parallel thoughts on flexibility, agility, innovation and strong business understanding. Check them out. This has been the new world since 2000 in case anyone has been sleeping.

Appalling Business Decisions

Over the past 2 months I have had calls from friends in business who have been either laid-off or downsized because of the economy. In one particular case I was appalled to hear that one of my very close colleagues was let go who ran a very successful business with excellent margins and top line growth. Are you surprised to hear that in the current economic environment? Well believe it I mean top and bottom line growth year over year with margins increasing each year as well.

This person ran the business which was a business unit of a larger corporation. She was smart, brought in excellent people and had the respect of the organization. Her leadership skills were exceptional and it permeated throughout the organization. Well, suffice it to say that the parent company was looking to take out additional overhead to shore up its' margins and she was hit.

So here is my dilemma, this person was 1,000 miles away from the parent company, it's business was different in most regards, and was a stand alone environment except for infrastructure and IT development support. How could the management of the parent company come to a decision like that unless it has no regard for business economics and how to effectively manage people. I am appalled at this decision and would love to read the sales and profit statements in 2009-2010 to see the full affect of this stupid decision.

What are your opinions on this subject and have you seen similar decisions made in your company that make little or no business sense.

Employee engagement and the intranet

Employee engagement is often a misunderstood term; to many managers confuse it with employee satisfaction. In short, engaged employees aren’t just happy ones, but have a strong emotional bond to the organization that employs them and proactively look to improve the position of the organization.

An engaged employee is more likely to:

• Understand and support through action a company’s vision and goals
• Recommend the company’s products and services to friends and family
• Work smarter and longer hours without being asked twice
• Enjoy challenges and problem solving
• View their own personal growth as linked to the company’s performance

How do you make an average employee and engaged employee? Well, it’s one of the many topics we’ll cover in a special seminar on October 8th in Toronto, The Employee Engagement Imperative: Proven Techniques for Securing and Sustaining Employee Engagement. This is a 90-minute, breakfast seminar if you are in Toronto or can make the trip.

Of particular note, Intranet 2.0 tools are massively engaging if used correctly. Giving employees a chance to express their opinions – and seeing them count and contribute to change – are tantamount to highly engaged employees.

by Toby Ward on Fri 26 Sep 2008 11:39 AM PDT

Flexible Work Arrangements: A Productivity Triple Play

When flexible work arrangements are understood and used as a management strategy for creating more effective workplaces, they enhance organization performance in three ways: (1) Produce measurable improvements in individual and team performance; (2) Reduce stress on employees and more fully engage them in accomplishing organization goals; and (3) Strengthen a results-focused management culture. When flexible work arrangements are introduced as an employee perk or an accommodation to individual employees, companies often fail to realize these benefits. In contrast, a team-based, results-focused approach to the introduction of flexible work arrangements capitalizes on the shared need of both companies and their employees for increased flexibility. The experience of ten American companies in a variety of industries proves that, when flexible work arrangements are introduced with the two-fold purpose of enhancing performance and creating more flexibility for employees, everyone wins.

You should refer back to my articles/posts earlier this year regarding this subject. Being on the cutting edge of innovation is what I have been know for over my 25+ years in HR.

Have You Created or Deployed A Digital HR Strategy

Since you are winding down for the year and getting ready for 2009 I am sure each of the HR leaders have deployed their 2009 HR strategy. As a consultant I can always look under the hood and find something that an HR department is not doing but in the case of digitalization and the web here are some things that should be included in your digital HR strategy:

1. Utilizing Web 2.0 to drive HR optimization;
2. Incorporating all the relevant portals that maximize efficiency;
3. Incorporating social networks as part of daily HR life as well as recruiting;
4. Ensuring that your company has governance around social software;
5. Embrace emerging technology as a first responder rather than a follower;
6. Incorporating manager access to web 2.0 & HR activities;
7. Building technological succession planning not manual.

All of these activities leverage you the HR leader as the change agent of your company. The successful deployment of these activities and other digital initiatives should drive business value and performance. This transformation from manual or Web1.0 or 1.1 for HR will help change perceptions and effective management of human capital.

Your comments and options are important to me and our readers. Please comment to wgstevens2@gmail.com

Dignified Reductions & Doing What is Right

If you have heard the news lately or read the morning/evening papers all you hear and read about are company reductions-in-force, layoffs, firings, downsizings, resizings, rightsizings, perfectsizings, and department/office/plant closings. You name it there are a hundred ways to call " losing your job".

Too many companies are just letting people go and not doing it in a dignified manner. That is why you are hearing about plant sit-ins, or employees refusing to leave their work area because companies are not treating employees with respect or letting them go in a dignified way.
what is even more outrageous is companies that are not taking care of people who have dedicated their life to their company's product line, or getting an order out the door to meet a customers need. So what we as HR people need to do is make sure that management does treat employees with respect, dignity, and make sure that pay is taken care of that is fair and just.

Remember these people who you do not treat right will make it harder for you to recruit in the future. The word will got out and we continue to talk about not burning bridges, well for those who only think that this is a one way street you are sadly mistaken it is a two way street as well.

What are you thoughts on this touchy and current issue individuals are facing in the tough economic environment. Email me at wgstevens2@gmail.com

How To Build an HR Business Case

In lean economic times, budgets are reduced, and many senior leaders will push back on budget requests that lack a clearly defined business case. Unfortunately, not all HR professionals know where to begin or how to build a business case. Here’s some help.

A business case is a form of gap analysis. It describes the business problem, the current status, the desired status and an action plan stating how the organization can achieve its goals. A well-formulated business case is a tool that supports planning and decision-making regarding purchases, vendor selection and implementation strategies.

A well-written business case provides a clear statement of the business problem and a potential solution, outlines consequences resulting from specific actions, and recommends metrics for the proposed solution. More important, a business case provides an opportunity to propose options that are based on objective data and that offer an increased sense of understanding and ownership of the solution.

Before you start building a business case, it’s important to be aware of a primary limitation: Each organization requires and uses different financial metrics. For example, senior management at your organization may want to see a return on investment (ROI), total cost of ownership or cost-benefit analysis. If you’re undertaking a business case and aren’t familiar with these concepts, you should consult someone in your finance department.

Similar to most projects, the typical requirements for business case development are time, people and money. Expect to spend at least eight hours writing a comprehensive business case. However, the time spent writing and the number of people involved can expand based on the problem. A more complex or costly problem can extend the time frame significantly. The roles needed to pull the information together include a basic project manager (you), a financial expert with organizational knowledge and good spreadsheet skills, researcher(s) to gather data and perform competitive analysis, and an editor to put the information into an organized format.

The 10 elements of an HR business case include:

1. Problem statement. In one paragraph or less, clearly state the specific business problem.
2. Background. Be sure to include significant information regarding skills, budgeting and performance that contribute to the business problem. Indicate, in general terms, what’s required to resolve or reduce the problem.
3. Project objectives. Use a maximum of seven bullet points to state what the proposed solution is trying to accomplish. Some examples may include purchasing hardware and software or selecting a new vendor.
4. Current process. Identify the current organizational processes that the proposed solution will affect, including the training department, other departments within the organization and relationships with clients, external partners and the competition.
5. Requirements. List resources needed to complete the project, such as staff, hardware, software, print materials, time and budget.
6. Alternatives. Outline at least four other options to implementing the proposed solution. Be sure to include basic requirements for each and estimate project risks, ramp-up time, training costs and project delays.
7. Compare alternatives. Compare and contrast each of the alternatives with the proposed solution and the other alternatives. State similarities and differences, benefits and detriments, and costs associated with each option.
8. Additional considerations. List critical success factors other than ROI metrics; for example, effects on partnership agreements with specific vendors or the potential need for help desk or customer support.
9. Action plan. Propose specific action steps. State your short-term (first three months) and long-term (three months to conclusion) action plans, including major milestones. This section should also include proposed metrics to measure success.
10. Executive summary. Write a clear, one-page summary of the proposed solution. Tailor it to your audience and offer a high-level overview of research that leads you to the proposal.

The 10 elements above provide a basic framework. However, you may still encounter challenges when formulating your specific business case.

The information below outlines some common problems and solutions.

• Problem: Poorly identified business problem - Solution:Ask others, do the math and present your case informally to test the opinions of management
• Problem: Wrong business metrics - Solution:Work with your finance department to get accurate figures and determine proper metrics
• Problem: Wrong presentation format - Solution:Talk to other departments to learn whether there is an existing business case framework
• Problem: Poor estimation of qualitative data - Solution:Be sure to apply a consistent unit of measurement related to a specific unit of cost
• Problem: Poor estimation of project costs - Solution: Work with internal experts to re-evaluate estimated project costs, risks, ramp-up time and training costs as well as foreseeable project delays.

Now you’re ready to get started. But because each organization is different, consider the following suggestions:

1. Make friends with a knowledgeable person in your finance department.
2. Know your audience’s expectations and awareness of the problem.
3. Keep it simple, and get your facts straight.

If you’ve done your homework, you’ll be on your way to eliminating a performance gap within your organization.

Ed Mayberry, Ed.D., is a senior leadership consultant with Kaiser Permanente who wrote this article

From Risk to Opportunity: How Global Executives View Sociopolitical Issues

The environment and climate change rank most highly for executives when they consider what issues will attract the most attention and shareholder value, followed by privacy and data security, according to a recent survey of more than 1,400 executives by The McKinsey Quarterly.

Of the 15 trends McKinsey queried executives about in the survey, executives viewed roughly half (eight) as opportunity rather than risks — up from just four the year prior. "The share of executives who see opportunities has grown for every single issue except job losses from offshoring; however, a few trends remain firmly entrenched as risks," notes the McKinsey October 2008 report. "They include pension and retirement benefits, health care and other benefits, and the high level of executive pay. These are wallet issues that appear negative for executives and their companies, but as noted earlier, the other societal stakeholders assign even greater importance to them. This pattern suggests mounting pressures on business leaders to confront these issues sooner rather than later."

The challenge for executives is how to manage and transform sociopolitical issues into business opportunities, as the report found that the tactics senior leaders often use to handle them don't always work. "The tactics employed most frequently — including media and public relations, lobbying regulators, advertising and marketing, speeches by the CEO, sustainability reports, and philanthropy are not necessarily viewed as most effective."

Instead, "executives see greater effectiveness from less-used tactics, such as implementing policies on ethics, engaging with NGOs [nongovernmental organizations] and other stakeholders, increasing transparency about the risks of products or processes, and changing product lines and processes. These presumably underused tactics directly affect operations or reflect an expanding contract between business and society."

Thoughts on HR Spacial Intelligence

In HR we learn about all the different types of intelligences. However, most people in our profession do not know how to distinguish between them. One of the more important intelligence types is spacial intelligence which gets pushed by the wayside for the following:

• EQ, IQ, AQ as well as;
• Linguistic and verbal intelligence
• Logical intelligence
• Body/movement intelligence
• Business intelligence
• Interpersonal intelligence
• Intrapersonal intelligence.

Spacial intelligence is how do you put together a picture that the CEO, or senior HR leader paints for the organization. Does your spacial intelligence see the same picture or direction? So if someone said put sales under marketing how would you picture that on a organizational chart, or better yet how would you realign the placement of departments within the organization? Usually, this is left to department heads and the facilities manager but as HR leaders this is one area that you should really be a part of in your organization. So think about spacial intelligence and how you measure against what you hear and how you see it.

I welcome your comments and opinions at wgstevens2@gmail.com.

As Layoffs Spread, Innovative Alternatives May Soften the Blow

My take on this is you as HR professionals should push the envelope on being the leader in creative ways to save people rather than laying them off. This article may give you some insight for those who are not creative. As a former head of HR in a billion dollar company it was a mandate to be creative to save as many as possible in layoff situations.

Just how bad will the economy get? For employers facing tough decisions about layoffs, the question is far from rhetorical. If the current economic turmoil is contained sooner than expected, premature layoffs could be a disaster. If not enough employees are laid off and the recession continues, the company's bottom line could suffer. And in any scenario involving layoffs, morale among those employees remaining at the company is sure to plummet.

Some companies consider alternatives to layoffs, such as voluntary retirements or salary cuts, hiring freezes, reductions in hours, or the cancellation of business trips and/or costly perquisites. Even standard benefit packages and matching contributions to 401(k) plans might come under the microscope.

According to Wharton management professor Peter Cappelli, director of the Wharton Center for Human Resources, the use of creative layoff alternatives peaked in the 1980s but then fell into decline. Executives came to a general consensus that if salaries were cut by 10%, or hours were shaved from the workweek, the company's best people would disappear. The thinking was that the "most mobile" employees would be hired by competitors, Cappelli says.

But that prediction, he adds, doesn't hold up. "It is driven by the executives' view of the way things work, and the executives, frankly, think that everyone thinks like them. They see themselves as the kind of talent that is mobile." They also don't believe that employees would buy into the idea of doing something good on behalf of their colleagues [by accepting reduced wages or hours] because "they themselves wouldn't buy it." Once again, Cappelli adds, that perception "is probably wrong." The act of making sacrifices for fellow employees "might actually build some morale and knit the company together."

Besides, Cappelli says, if the economy stays the way it is or worsens, the concern that a company's top employees will leave is irrelevant, since no one else is hiring either. "If you have a choice between a 10% wage cut and laying off 10% of the work force, why on earth would you choose the latter?" he asks.

Cappelli suggests that it's worth thinking about what kind of problem a company is trying to solve. If there is a concern about what happens when business activity picks back up, for example, companies that hold on to their workers would be in much better shape than companies that have undergone large-scale layoffs.

Spreading the Pain

The costs of layoffs go beyond the morale problems they cause -- both for those laid off and those who keep their jobs. Unemployment insurance premiums spike. Depending on the company, there are severance packages to consider and outplacement services (costly in these days of bigger demand for them). Litigation is a not insignificant risk. Cappelli suggests that if a company can cut back without instituting layoffs, it should do so. "Then you don't have those start-up costs" once things are back on track.

On the other hand, there's nothing like a good economic downturn to get rid of dead wood. A sagging economy can be an opportune time for management to deal with performance problems by using the bluntest instrument possible, Cappelli says. Firing people is often difficult to execute, but an over-arching justification tends to lessen complications.

The subject of alternatives to layoffs is almost always seen from the point of view of the employer, he adds. It would be a rare employee who suggests his or her hours be cut. But executives can share the decision by asking for voluntary pay cuts in exchange for some sort of deferred compensation, such as shares of stock or extra vacation. Some U.S. cities coping with recession-driven budget crises have already opted to reduce salaries and hours. Atlanta Mayor Shirley Franklin recently said 4,600 city employees would see their hours cut by 10% because of a $60 million budget gap.

In the private sector, the conventional wisdom is that the smaller the company, the more apt owners are to work things out personally with workers. "We recently reduced hours in our department," says Ben Atkinson, director of risk management for Edison, N.J.-based People Link, a provider of software training, consulting, development and support. "My team proposed the idea, and each [of us] volunteered to reduce [his or her] number of work days. I have asked other managers across our enterprise to consider this approach."

Atkinson says the move has prevented major disruptions to projects, and retains the investment the company has made in training its employees. "This is not to say we won't consider layoffs," he adds. "But it depends on your economic prognosis. If we anticipate a recovery sooner, we are more likely to consider reduced hours. If we expect a long slog, layoffs may seem more appropriate."

"The really small companies are probably more willing to find alternatives," Cappelli suggests. "Relationships are much more personal. It's one thing for the CEO to call the HR person and say, 'Lay off 10% of the staff.' It's another thing for the person at the top to look the [laid-off employee] in the eye" and say he or she no longer has a job.

Small, privately held companies also do not have as much pressure to cut costs if the owner believes it is possible to ride out the storm. Conversely, in a publicly held company, even if a CEO is inclined to seek alternatives to layoffs, pressure from shareholders and Wall Street analysts to cut staff might be too great. "With bigger companies, there is a certain skill to laying people off," notes Cappelli. "It will be interesting to see in this recession how companies do it, because a lot of them have lost that skill."

In the past 20 years, staff cutbacks have more frequently included attractive incentives, according to Daniel O'Meara, a senior fellow at Wharton's Human Resources Center and an employment law attorney with Montgomery, McCracken, Walker & Rhoads in Philadelphia. In the 1990s, O'Meara saw more opportunities for voluntary retirement incentives. "It was more feasible with a defined benefit plan, and very feasible with over-funded pension plans. If [employers] could afford it now, it might be that anyone with 20 years of service and at least 55 [years old] would be treated as [if they have] 30 years [of service] and ... are 65."

These days, such options are less generous, he says, citing a particular hospital where buyout offers are more typical: one or two weeks of pay for each year of service. "No one who is happy in their job and doesn't have something lined up would leave for four or eight weeks of pay. But you might have people who were going to leave anyway, and see it as a great opportunity."

The other side of that coin is that some companies make such offers "only to show employees that they are basically good people, just before the involuntary layoffs come. Since the Depression, all these alternatives have been discussed -- to lay people off or share the pain," O'Meara says, recalling personal experiences as a young man growing up in western Pennsylvania, where he worked summers in a steel mill. "There, when things got slow, we all worked four days a week. That's [a case] where the union had the effect of making sure people held on to their jobs. A lot of this stuff has been around for a long time. These decisions have huge impacts on people and there are no easy solutions."

O'Meara has mixed emotions about unions in general, mentioning "pay compression," where an unskilled broom-sweeper makes perhaps 60% of what a skilled steelworker makes. But that "socialist preference" clearly had a positive impact when the situation went beyond cuts in hours and moved into layoffs. "I have seen people retire and [accept] these fairly modest offers. [They figure] that they are older and their kids are out of college, and they think, 'When I was younger and needed the job, I would have appreciated someone doing that for me,'" O'Meara recalls. "It doesn't happen often, but I saw it in the steel mill."

A new factor on the playing field of labor negotiations is pending legislation called the Employee Free Choice Act, pushed by the AFL-CIO and backed by many Democrats in Congress, including the President-elect. Passed by the U.S. House of Representatives in 2007 and eventually filibustered in the Senate, the act would require a union's certification by the National Labor Relations Board (NLRB) when a majority of employees has signed a card designating a union as its bargaining representative.

"The bill would make it much easier to organize employees," O'Meara says, which might make the case for alternatives to layoffs more pressing. At the same time it could possibly restrict options for employers. "You don't want to lower morale when [Congress] is about to pass a law making it easier to organize. [But] it would make anything innovative a little more difficult."

Avoiding Layoffs 'At All Costs'

"The economy has got us all watching very closely. Like anyone, we are trying to figure out where the bottom is," says Tim Roth, president of Megavolt, an agricultural machine re-manufacturer based in Springfield, Mo. "Agriculture has been relatively strong compared to other industries, but in June, we saw that in future months we would have some problems. We tried to figure out how to keep people and avoid layoffs at all costs."

Megavolt has two advantages over many other private companies. First, it is a joint venture with two other firms descended from International Harvester after a buyout 25 years ago. In some cases, this allows employees who get additional training and certification to temporarily move to other work places, as needed.

Second, the company moved in October to a "shared work program" of three 10-hour days a week as a way to cope with the downturn. While workers keep their jobs, the lost 10 hours each week is nonetheless enough for them to be eligible for state unemployment benefits in Missouri, where Megavolt is located. The Missouri program also does not restrict unemployment benefits for people who take on part-time jobs, Roth says. And within the shared work program, companies can soften the blow to people who are laid off. In that situation, the state stipulates that the employer give the volunteers a specific recall date -- generally, anywhere from one to six months out, according to Roth. The company also maintains health benefits for employees and defers their contribution to the premiums.

"It's one thing to have lost a job completely, but it's quite another to be able to look for work and know you have got something else behind you," Roth says. "It's a good program."

Cappelli says Missouri's program sounds promising as a model for other states. But it might be a moot point in the short term. Indiana officials just announced that they are running out of unemployment dollars and might have to increase the state tax that generates those funds. Currently, the first $7,000 of earned income is taxed for unemployment insurance, something Indiana may need to increase to offset its own residents' needs.

Other states, such as New York, have shared work programs similar to Missouri's, but the gap in flexibility from one state to another can be wide. At the moment, most state unemployment offices are passing on the news to out-of-work residents who have exhausted their benefits that recently passed legislation provides up to seven additional weeks of compensation, funded by the federal government.

In the end, companies need to balance what's best for their employees while making sure the company remains viable in tough times. Small companies might be able to maneuver more nimbly, Cappelli says, but innovation will suit the times and circumstances no matter what the size of the firm, public or private.

He cites Cisco Systems in 2001, after the tech bubble and before 9/11, as an example. Cisco allowed employees to take sabbaticals while they were paid one-third their salary. "The reason was that at one-third pay, you couldn't survive forever, but it was enough money that you wouldn't necessarily be looking for another job" in the meantime. Cisco saved both money and talent.

Roth maintains that solutions like the ones his company have come up with work well only if state and federal agencies leave the innovation to the companies. "We can have the greatest idea to do something, and if the state doesn't support us, we can't do it," Roth says. "We have to save jobs. We cannot let this country lose more jobs."

When the Going Gets Tough, the Tough Don't Skimp on Their Ad Budgets

I found this article and associated reading important for all key marketing people to review and digest. From an HR prospective practicioners need to support the business by ensuring certain dollars are not cut from the budget.

With corporate managers under enormous pressure to control costs and maintain liquidity in the current credit crisis, advertising budgets often appear to be a dispensable luxury in the struggle to survive. Executives who succumb to that temptation, however, put the long-term future of their companies at risk, according to Wharton faculty and advertising experts.

"The first reaction is to cut, cut, cut, and advertising is one of the first things to go," says Wharton marketing professor Peter Fader, adding that as companies slash advertising in a downturn, they leave empty space in consumers' minds for aggressive marketers to make strong inroads. Today's economy "provides an unusual opportunity to differentiate yourself and stand out from the crowd," says Fader, "but it takes a lot of courage and convincing to get senior management on board with that."

According to Wharton marketing professor Leonard Lodish, with demand slack for advertising services, the cost of these services goes down, making advertising expenditures all the more defensible in a bad business climate. "If your company has something to say that is relevant in this environment, it's going to be more efficient to say it now than to say it in better times," says Lodish.

Research shows that companies that consistently advertise even during recessions perform better in the long run. A McGraw-Hill Research study looking at 600 companies from 1980 to 1985 found that those businesses which chose to maintain or raise their level of advertising expenditures during the 1981 and 1982 recession had significantly higher sales after the economy recovered. Specifically, companies that advertised aggressively during the recession had sales 256% higher than those that did not continue to advertise.

For companies that do stay the course and continue to advertise into a recession or increase their promotional activities, the key is to craft messages that reflect the times and describe how their product or service benefits the consumer. For example, companies might be tempted to emphasize price in a recession, but that only works for companies like Costco and Walmart that are built around a core strategy of providing low prices year after year, says Lodish. He points to the current Walmart campaign, "Save Money. Live Better," as a successful approach to the recession.

Dean Jarrett, senior vice president of marketing at The Martin Group in Richmond, Va., which developed the Walmart ads, acknowledges the campaign began in 2007 before it was clear a harsh recession was building. "We can't claim we knew a recession was coming, but "Save Money. Live Better" is dead on-point with who they are and what they want to be."

Eileen Campbell, chief executive of the Millward Brown Group advertising firm in New York City, says that while companies should probably not dwell on the recession and scare consumers into hoarding their pennies under a mattress, certain products require a straight-up approach -- such as financial services. "If you are in the financial services category, to behave as you did a year ago is silly." At the same time, however, many consumers are weary of negativity generated by the recession and would be receptive to a more upbeat message, she adds. "If you can put a positive spin on how you can genuinely help without invoking doom and gloom, I think that's going to be more compelling."

In Control of Your Pushups

Wharton marketing professor Patti Williams cites Gold's Gym -- the Texas-based gym chain -- as an example of a company that has found a way to navigate the economic slump while promoting a product that might seem discretionary or self-indulgent in hard times. One television spot shows legs working a stair climber as words pop up across the screen changing from "First floor" to "12th floor" to "Kilimanjaro" to "Olympus." Finally the words, "The Corporate Ladder," appear.

"This is about being goal-oriented as opposed to a general fitness or vanity play," she says. "It links to the economy because people are less likely to be spending on flashy things and more likely to be thinking practically and pragmatically. Certainly people are going to be spending less in this downturn, but they will spend something."

Williams agrees that advertisers should approach the 'R-word' (recession) with extreme caution.
"Along with this economic downturn comes a lot of emotional response, such as anxiety. It is characterized by a sense that you lack control, that you don't know what's coming and you are at the whim of circumstance. To the extent that advertisers feel their clients or consumers are experiencing anxiety, ads should try to empower consumers and help them think of ways to be in control in a world where they feel out of control."

The Gold's Gym spots address this concern, she suggests. "'You can't control the economy but you can control how many pushups you do, and take control where you can, and we can help you.' That's a powerful message."

Value is another important message to build into marketing campaigns during a downturn, according to Williams. Many marketers design communications aimed at justifying the price they charge for goods and services, either by emphasizing a low price or touting the benefits the company can provide to buyers. "Advertisers will do both," she says. "Some are in a better position to talk about lower costs while others will have to focus on what you get for your money."

Luxury businesses should take a completely different approach, appealing more to emotion, Williams notes, emphasizing the need for some emotional release or comfort in difficult times. High-end advertisers will also attempt to emphasize long-term value -- such as suggesting that a watch is not just a purchase for today, but for years to come. "You can try to remind people that this is, hopefully, a temporary state of things and we should not be focusing on the immediate future but also longer-term."

David Sable, chief operating officer of Wunderman, a brand-building agency that is part of the global marketing firm, The WPP Group, advises advertisers in a downturn to rally to protect and preserve brand equity that has been nurtured for years, with continued investment in and support of branded products. "The worst thing you can do is cheap-out on products -- put less coffee in the cappuccino -- as many have in the past."

According to Sable, while price is important in a recession, the majority of price-driven consumers still factor in the importance of branding. Companies must maintain "good housekeeping" during a recession, such as product quality and good distribution systems, but he suggests that clear brand association and leadership comes through communication. "If you cut the communication, you have a major problem."

He urges marketers to make sure they understand the "elasticity" of their brand, which would be a gauge of how much -- or how little -- advertising is necessary to sustain sales. "It's not a science. There's a lot of art there," he acknowledges, "but you must be supporting your product."

He also warns that in today's networked, digital marketplace, consumer buzz about disappointments with a product can metastasize quickly and widely. "You must give people good things to talk about by continuing to have good products and communication." The biggest lesson is that recessions come and go, but "hopefully your brand is for life. It's forever. So you have to be careful how you react because the downturn is not going to be forever."

If companies cut deeply into advertising and communications in a down period, the cost to regain share of voice in the market once the economy turns around may cost four or five times as much as the cuts saved, he adds. "You must really keep a balance in times like this. Don't go dark when customers and consumers need you because they need you as much as you need them."

Matt Williams, a partner at The Martin Agency, says a downturn is a natural time to focus on core strategy. A recession, he says, can be a "problem disguised as an opportunity.... You can position the brand as an ally to consumers in tough times with product development or sponsorship programs so the consumer can say 'I see by its actions that this brand is on my side.' That will pay dividends not only during the recession but beyond."

When Life's (Not So) Good

According to Wharton marketing professor John Zhang, advertisers in all categories must be in tune with consumers in the current climate. For example, he notes that LG Electronics is backing off its "Life's Good" slogan. "That's not the mood people are in. If you do that, it will generate resentment. You need to fine-tune your message to be sensitive." In challenging times, marketers must also work harder to segment consumers with specific messages. "If, in the past, you used mass media, you probably want to be more targeted now to make sure the message gets to the right people."

Research indicates that combative advertising which targets competitors escalates during an economic downturn. "When the marketplace is shrinking, you tend to become a little more competitive in your tone," says Zhang, who cautions that this approach can backfire. "If you say your competitor is bad and your competitor says you are bad, ultimately the customer thinks both are probably good and bad. They tend to be indifferent. Even in a downturn, if you want to create loyal customers, you don't want to be overly competitive. You want to highlight what you do best and be sensitive to the needs of your customers rather than bashing the competition."

An economic slump may be a time to reconfigure the advertising mix between traditional media and digital or other outlets, depending on the product, brand positioning and overall corporate strategy, Zhang continues. "You don't have to put a huge amount of money in the marketplace," he says, adding that lower-cost marketing techniques -- such as banners, street signs or direct mailing -- might merit new attention. When times are flush, it is easy to pay a premium for more expensive established media.

The Ever-elusive Gold Standard

All forms of media can be successful even in a recession, although the impact of digital marketing might be easier to quantify and therefore able to withstand the close scrutiny of senior executives demanding justification for any spending while their operations are under recessionary pressures, says Lodish.

Fader points out that direct marketing and other kinds of interactive communications might be valuable but do not yet deliver easily quantifiable results. "Unfortunately, the industry is still in its early infancy. A lot of people talk about what we are capable of doing in measurability, but no one has established the gold standard yet. Maybe this forthcoming recession will be the chance to catalyze that and make it happen."

The current recession will offer an opportunity for marketers to provide integrated campaigns meshing traditional and digital media. Fader says that in the last downturn, in 2001, digital marketers were operating out of separate agencies, but today marketers are able to construct fully integrated campaigns. "We have been talking about integration for years, but it's been a much slower process" than expected. "I'm not sure the recession will accelerate that integration, but those who are well-integrated will start to see some of the benefits."

Your input and comments are appreciated.

What Are You Thankful For?

Today is a day of thanksgiving and all of us should be especially thankful for what we have.

We should also be thoughtful for those less fortunate in the world today who find it hard to make ends meet, loss of a loved one, entered into bankruptcy, loss of a job, or other less fortunate happenings.
Today is a day of thanksgiving and we should all embrace those around us, or those who we have not spoken to for some time. Happy Thanksgiving.

Experiences with Recruiters

I had coffee with a friend this week (and I truly thank her for all the help she has given me in building this blog and I hope I have reciprocated) and we were talking about what leads/interviews she had recently in the marketplace. This topic lead to her experiences with retained search people. This was not a good discussion and my personal experiences didn't add anything positive to it either.

Well, a recruiter sends out a query on a job through an email blast. How many people respond you can only imagine. The big question is how many people heard back from the recruiter after they responded to the email with all their critical information and job history. The even bigger question is after the job seeker calls to follow-up how many of those people ever received a return phone call?

So if you are in the relationship market as most retained search people are why wouldn't they respond even if they were inundated with email responses and why wouldn't they return your phone call. That is not relationship building and I'll tell you one thing, it is a game that if they worked for me they would be fired immediately.

The problem is job seekers spend a large amount of time trolling the Internet for leads on positions, they do it with the idea that someone will respond. Human resources people are suppose to be people friendly and servants to the people they support. The same goes for recruiters. If you don't want to serve then find a job where you are an individual contributor and you do not have to speak to anyone. Just do research only. I was told by someone and supported by a blog I read recently that the 3 things a recruiter will not tell you is:

1. he/she is not working for you at all
2. he/she has a real hard deadline to fill a position, if there is one to fill, and
3. he/she is just trolling to build a database

Something good finally came out of our discussion over coffee though. A recruiter did return her query by email and said to call him. So she did and he told her the number of applicants he received, how he was going to cull it down to a reasonable number by a certain date, that he would call the first pass people by a certain date, from that pass and telephone screen, he would cull those numbers down to 20 or so by a certain date and present 5-6 candidates to the company he was representing by X date. This was all laid out to all the applicants so they know where they stood at any given point in time. The recruiter had a plan and communicated it effectively to those applicants. GREAT FOR HIM AND HE SHOULD RECEIVE A GOLD STAR FOR HIS WORK. The others, you fail miserably.

So share with me your experiences at wgstevens2@gmail.com or comment to this blog.

Proactive Thinking vs. Reactive Thinking

Many stories and sayings try to inspire us to be more "proactive", as opposed to "reactive".

In this context, the word “reactive” implies that you don’t have the initiative. You let the events set the agenda. You’re tossed and turned, so to speak, by the tides of life. Each new wave catches you by surprise. Huffing and puffing, you scramble to react to it in order to just stay afloat.

In contrast, the image we associate with “proactivity” is one of grace under stress. To stay with the previous analogy, let’s say you’re in choppy waters. Now, you look more at ease. It’s not just that you anticipate the waves. You’re in tune with them. You’re not desperately trying to escape them; you’re dancing with them.

It would be great to dance with the rhythm of life, using the ebb and flow of events as a source of energy. But is this only possible to those people who are endowed with a proactive attitude (or, maybe, a “proactive gene”)?

I believe that being proactive is not a mysterious quality that we have, or don’t have. It is a way of dealing with things which we can develop and strengthen.

What, then, is this skill?

In a nutshell, being proactive is the same thing as being reactive. The only difference is: you do the reacting ahead of time.

Let’s go back to the example of the two swimmers on the choppy seas. The difference between them is that the proactive swimmer anticipates that there will be waves, whereas the reactive one is painfully surprised by each wave.

The difference is one of perspective. The proactive swimmer sees the big picture: each wave is not an isolated incident, but is part of a pattern. While there is stress in dealing with difficult circumstances, there is a consistency and a logic to the environment. There’s a degree of predictability.

With this bigger picture in mind, the proactive swimmer is able to adapt to the ups and downs. As he does so, he “learns” the patterns of the waves from inside out, so that his reactions become more and more spontaneous, more and more in tune with the rhythm of the waves.

So, being proactive means being able to anticipate what the future will be, and to react accordingly before it actually happens.

What is it that prevents the reactive swimmer from doing so? It could be lack of information. There are plenty of events in life that we simply cannot predict. It could also be lack of intelligence: some people are better than others at thinking in terms of patterns.

But let’s assume, for the moment, that our two swimmers have both the same levels of information and intelligence. Then, the difference between them would simply be that the proactive swimmer has enough energy to take in the available information and adapt to it. In contrast, the reactive swimmer is exhausted and overwhelmed (“Somebody get me out of here, please!”).

What does this metaphor have to do with understanding how you can be more proactive in your life? Three things:

1. To be proactive, what you have to do is ask yourself what is likely to happen, and react to it before it happens.
2. It takes energy to rise above the difficulties of the moment, to see the big picture and to make the changes you need to make.
3. Sometimes, you may not have that energy. At such times, it serves no purpose to berate yourself for being weak. Think of your “reactivity” as a symptom instead of a failure. You need a break. Take it.

Let’s imagine that our exhausted swimmer finds a raft. From this stable vantage point, wouldn’t he be better able to see the big picture? After some rest, wouldn’t he be better able to deal with the pattern of the waves?

Sometimes, the most proactive thing you can do is take a break. Use this “Time Out” to refocus on what you’re doing and how you’re doing it.

So what do you think, let me know your thoughts at wgstevens2@gmail.com ?

Corporate Employment Incentives

I said when I started this HR blog that I would not inject any political biases or humor. Well given that our new president elect will take office in January there are a few opportunities for companies to cash in on the tax incentives that Obama wants to pass. Given the history of tax changes expect them to be retroactive to January. Think about how your company can take advantage:

• hiring employees through state unemployment offices
• incentive based positions with up to $3,000 in tax credits

But you should also think about retooling your corporate practices and educate or reeducate your management on union organizing. The new president elect favors union organizing and co-sponsored a bill "the Employee Free Choice Act". Keep your ears to the ground on this one since it requires companies to recognize a union when a majority of workers sign cards. Yikes!!!!!!!!!

Your contributions and opinions are important please contact me at wgstevens2@gmail.com with your comments.

Changing Jobs in a Recession

With the stock markets down again this week, more bankruptcies, and layoffs happening across industries, a rewarding job that provides a steady source of income is your best friend. So why would someone even consider moving jobs in this economy? CIO Magazine investigated and came to the conclusion that conventional wisdom be damned, changing jobs during a downturn can actually be a good idea.

Their rationale? Companies tend to hire more for "critical" positions during a downturn, since every opening is scrutinized more carefully. Basically, the roles that are being filled are ones that offer the potential to both make a huge impact and advance your career. Firms that are recruiting in a downturn are doing so because the roles they have to fill have a major importance to their organizations

They also point out that staying put during a recession can create a bad perception of you at your current company. Whether or not you agree with their take, it certainly makes compelling reading.

CIO On-Line has this to offer in relation to this post by Meredith Levinson:

Is It a Good Idea to Change Jobs During a Recession?

Conventional wisdom says that an economic downturn is not a good time to change jobs and that employed professionals should just hunker down in their current positions and try to prevent getting laid off. But staying put could potentially do more harm to your career than pursuing a new opportunity. And a new opportunity could be your ticket to stability and economic prosperity.

Conventional wisdom says that a recession or economic downturn is not a good time to change jobs. During a recession, most employed professionals hunker down and try to prevent getting laid off. Who can blame them?


But a recession can be an excellent time to take a new job, provided you've done your due diligence, says Sam Gordon, a recruiter with Harvey Nash Executive Search. "Firms that are recruiting in a downturn are doing so because the roles they have to fill have a major importance to their organizations," he says.

Such strategic roles are unlikely to be cut if a company has committed to investing in them in spite of a downturn. These positions also present opportunities for professionals to progress in their careers instead of stagnating in their existing roles while riding out a recession, says Gordon (who's not just trying to drum up by talking up the value of taking a new job.) He adds that companies that continue to fill key positions and invest in strategic projects tend to be more innovative and dynamic--and are better prepared to capitalize on an economic rebound--than companies that unilaterally pull back their spending when the going gets tough.

"If you look back on the last downturn, the dot com crash, there were lots of firms that had cut back their investment, and when they needed to grow again, they had a much bigger ramp up than companies that continued to invest," he says.

What's more, staying put during a recession could potentially do more harm to your career than good. You might think that hunkering down, taking on extra projects and working longer hours will put you in a position to be promoted when the economy rebounds, but, says Gordon, that's not often the case. Lots of companies take advantage of employees who fear layoffs and who work extra hard to keep their jobs, he says.


"Quite often, the person who has proven himself to be amenable and willing to do extra things can get himself into a hole," says Gordon. "The perception of you as someone who always acquiesces to demands can be hard to shake. When the good times come back and there's a new, exciting project, very often the company will still go externally to find the person they're looking for."

So really, your only reward for redoubling your efforts is keeping your current job, and even that's no guarantee in this economy.

What's your strategy for surviving the recession? Are you going to "stay low and keep moving" in your current position, or are you going to look for something new? If you lay low have to totally recession proofed your job. Please refer to an earlier post on this issue.

As always your comments and opinions are important and I'd like to hear from you.

Why an Economic Crisis Could Be the Right Time for Companies to Engage in 'Disruptive Innovation'

While globalization has witnessed the decline of U.S. dominance in manufacturing, energy and even finance, one thing had long been presumed unassailable: Good old American ingenuity.

Now it appears that's not safe, either. China, whose industries have been envied in the West more for their tenacity than their ingenuity, has established a multi-year framework to become more innovative and, therefore, competitive. So has Singapore. Finland is merging its top business school, design school and technology school to create a multi-disciplinary "university of innovation" next year.

Council members of the National Academy of Sciences and the National Academy of Engineering have "expressed concern that a weakening of science and technology in the United States would inevitably degrade its social and economic conditions and in particular erode the ability of its citizens to compete for high-quality jobs," according to a 600-page report from the National Academies published in 2007 and titled, "Rising Above the Gathering Storm."

The wild card these days is what will happen to innovation -- the advance of progressive ideas in science, technology and business -- now that the world economy is in a tailspin. The conventional wisdom might suggest that business, government and academia will be less willing to embrace the risk-taking and short-term costs that come with the territory of innovating.

Yet Paul J.H. Schoemaker, research director for the Mack Center for Technological Innovation, suggests that, for some companies, the economic crisis can actually provide an innovation platform. "The crisis has multiple impacts," Schoemaker says. "Loss of revenue and profit will at first instill a cost cutting mentality, which is not good for innovation. But if the patient is bleeding you need to stop that first. Then, however, a phase starts where leaders ask which parts of their business model are weak (and perhaps unsustainable) and that, in turn, can lead to restructuring and reinvention."

He also cautions against too much caution -- over-reliance on incremental innovation versus transformative, or "disruptive," innovation. In innovation circles, the two have come to be differentiated as "little i" and "Big I" innovation. "The largest gains in business come from more daring innovations that challenge the paradigm and the organization," Schoemaker says. 

The Business of Being Disruptive

While "disruptive innovation" has enjoyed office buzz-phrase status for only about a decade, the idea is quite old: Austrian economist Joseph Schumpeter had it in mind when he borrowed the phrase "creative destruction" to describe his theories of how entrepreneurs sustain the capitalist system.

So just how does an entrepreneur or business go about being "disruptive?" How does one convince investors or top brass of a radical idea's worth?

One person who knows something about bringing disruptive innovations to market is Jeong Kim, president of Bell Labs at Alcatel-Lucent and a successful tech entrepreneur. He offered some suggestions in a recent presentation titled, "Paving the Way for Disruptive Innovation," that was part of the Executive Master's in Technology Management (EMTM) program's ongoing lecture series: Aligning Emerging Technology and Business.

Among the most critical assets one can possess, he says, is company-wide recognition that disruptive innovation is actually important. In a company that's already successful -- or one with layers of bureaucracy that hinder new ideas -- this can prove difficult. The firm also must commit itself to research. "Disruptive research is absolutely critical, especially in the technology space."

Furthermore, it is not enough to simply have brilliant engineers. Without competent management on the business side, the most elegant technology can wind up on the scrap heap of business history, or even worse, usurped by a competitor: "Disruptive innovation is not sufficient," says Kim. "You can [cite] numerous examples of companies that came up with [new] technology but eventually were displaced by somebody else."

In the innovator's lingo, these "somebody elses" are known as "fast followers" -- that is, companies with better funding or sharper management who were able to exploit a technology more quickly and effectively in the marketplace than the original creator. "You like to be the first to develop technologies," Kim says. "But the more flexible, the more innovative in terms of business model that the company is, the longer you can maintain advantage."

That point gives rise to the question: What is the best business model for fostering innovation? As it turns out, numerous decision-making tools exist to help firms systematically manage an innovation program, says Schoemaker, co-author of a book titled, Wharton on Managing Emerging Technologies.

According to Schoemaker, when it comes to innovating, the analogy is to firing a shotgun, not a rifle. Given the high failure rate of innovative projects, companies are smart to develop an array of possible situations and contingencies, rather than pin all their hopes on one plan. "Sticking to our knitting" might appear to be a sound business cliché -- it worked for a lot of companies that survived the dot.com era. But Schoemaker and other innovation gurus advocate looking at areas adjacent to one's main business as fertile soil for innovative breakthroughs. Old-fashioned, linear approaches that rely on standard measurement schemes are often outdated if relied upon solely. "By examining a company's growth gap, developing scenarios, exploring adjacencies and venturing more into blue oceans, companies can reap greater benefits," Schoemaker says. ("Blue ocean" is innovator-speak for unrealized, and therefore uncontested, markets.) "The investment approach, however, has to emphasize more of an options and portfolio strategy rather than static NPV (Net Present Value valuation method)."

Wharton management professor Mary Benner sees the "stick to our knitting" syndrome as impinging on large companies' ability to react to competitive threats. "I find that firms' innovation into radically new technologies or new markets can seem to shareholders and securities analysts like too great a departure from their expectations for these firms. Investors and analysts often prefer that firms maximize shareholder value by 'sticking to their knitting.' The result is that large firms, particularly those expected to have stable, predictable earnings and dividend payments -- i.e., "income stocks" -- are not likely to be rewarded by the stock market for entering new technologies or undertaking radical innovation, and instead may be punished by reductions in stock price and market value."

A prime example she has found in her own research, she noted, is Verizon Communications, the giant telecommunications firm. Stock analysts questioned Verizon's large capital outlays on FiOS, a high-volume fiber-optic network intended to counter a "triple-play" threat to its business posed by Comcast's cable television, high-speed Internet and voice-over-Internet phone service.

"Recent research suggests the stock market is not good at valuing intangibles, uncertain innovation or technological change," Benner says. "What this means for large, publicly traded firms is that they may face a disadvantage in engaging in radical innovation, and this innovation may instead take place in venture capital-funded startups."

Indeed, outsourcing of innovation itself could turn out to be the wave of the not-so-distant future. "Particularly in the pharmaceutical area, there has been a focus on how firms acquire innovation that has been undertaken by small, privately funded firms such as biotech startups," Benner says. "It may be that the locus of much really radical innovation is shifting outside of the large organizations to small start-ups."

That points to a "big trend" emerging in product development, so called "Open Innovation," according to Wharton marketing professor George S. Day, co-director of the Mack Center for Technological Innovation and co-author of Wharton on Managing Emerging Technologies. Open Innovation, also known as "crowdsourcing," entails collaborating with partners to solve business problems.

The archetype of that model is Waltham, Mass.-based InnoCentive. It matches corporate "seekers" who have science, engineering and business problems with amateur "solvers" worldwide. The "solvers" then compete -- for bragging rights and often token rewards -- to provide the best answers to the corporate problems. "Most companies are not looking for a big innovation they can knock out of the ballpark," Day says. Rather, they want a relatively quick fix for a specific piece of a larger puzzle.

For firms that want the "secret sauce" to always come from in-house, previous success can present a huge roadblock to innovation, according to Kim. The problem is that success creates a virtual construct, a paradigm of "How to Do Things," inside of which new thinking cannot flourish. Kim calls it "The Curse of Knowledge." Cross-discipline teaming "is one way of breaking the Curse of Knowledge," he says. Another is "experience pairing," or matching a senior employee with an individual who has considerably less experience, but a fresh perspective on how to solve problems.

An incredible opportunity to innovate disruptively lies in the problem of information overload, says Kim. Knowledge is being created at a far faster rate than any one human can ever hope to assimilate. The flip side is that we constantly filter out vast stores of data because we are bombarded with information like never before in history.

To prove his point, Kim showed audience members a movie clip that repeated an old psychology experiment. Two teams, one dressed in white, the other in black, dribbled basketballs and passed them back and forth. Audience members were told to count the number of passes made by the black-shirted players. A few of the students missed the person in the gorilla suit who nonchalantly walked through the middle of the scene, because they were not looking for it. "I can assure you that all of you saw the gorilla. But some people processed it, stored it, some people missed it. You were looking for a particular thing."

Seven Hours of Whitewater Rafting

The term "disruptive technology" went viral in the late 1990s after the release of Harvard Business School professor Clayton Christensen's book, The Innovator's Dilemma. But in practice, Bell Laboratories has served as an incubator of paradigm-shifting, "disruptive" innovations since its creation in 1925 as a joint venture of AT&T and Western Electric.

Researchers at northern New Jersey-based Bell Labs have won six Nobel Prizes and take credit for an inventory of innovations: The photovoltaic cell, the silicon-based transistor, statistical process control, the UNIX operating system, the C programming language, digital cell phone technology and wireless local area networks are just a few of the better-recognized innovations that have taken shape there.

Today, Kim said, Bell Labs researchers are working on similarly ground-breaking technologies. They are developing, for instance, a liquid sensor that can be transformed to any shape by applying voltage -- Kim envisions it being used as a zoomable lens. The division is also using nanotechnology to create 3-D images. "You have seen, in science fiction movies, 3-D holographic movie images? It can be done. It can be done using these technologies today. It's just not very cost effective."

Kim offered a case study from Alcatel-Lucent -- Lucent Technologies at the time -- on how to inject a spirit of disruptive innovation into an existing and stagnant culture. Lucent's optical networking division was severely underperforming and the company fired the unit's top managers. "I was really convinced that the reason I was put in there was that nobody else would do it, and they needed somebody to blame," says Kim.

The division was moribund: Financial results were disappointing and morale was low. Kim shook up the management team and took the survivors to an off-site retreat that featured whitewater rafting. "First thing they do is say, 'Why are we doing this ...?' After a while, they get really bored." The exercise, intended to foster teamwork and cooperation, was designed with the help of a psychologist. Instead of cooperating, the managers began splashing one another with their oars, "like little kids."

But the exercise-psychology experiment wasn't over at the end of the rafting run. "After six or seven hours of whitewater rafting like this, they were tired." That evening over dinner, people let their "at-work" guardedness down and spent time learning about one another.

The next day included all the off-site strategizing and white board sessions one might expect, but Kim says the interaction was more genuine and productive than if they had met as they were previously, a grouping of near strangers. In the first quarter following that meeting, he says, the group posted revenues of $510 million, $560 million the next quarter, then $730 million, then $970 million. The point, he adds, is that "teamwork is so critical for the success of a company."

Kim's advice for jumpstarting disruptive innovation is not exactly revolutionary, though it can seem exceedingly rare when many companies still think quarter-to-quarter and employees take a similarly short-ranged view.

Not even storied Bell Labs, it seems, is immune from the pressure to produce quickly exploitable technology. In a shock to the science world, Alcatel-Lucent all but shuttered its funding for the Lab's basic physics research over the summer. Company officials said the move was done to align the Lab more closely with the parent company's commercial pursuits in wireless, optics, networking and computer science. Or, as Alcatel-Lucent spokesman Peter Benedict toldWired Magazine in August, "In the new innovation model, research needs to keep addressing the needs of the mother company."

Basic research investigates the most fundamental of scientific questions and has no direct commercial application. At the same time, it has laid the groundwork for most of the modern technological conveniences we enjoy today, including commercial aviation, the GPS system and lasers.

"You have to make an investment in capital, human knowledge and networking," says Kim. "That's the way to get ahead."

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