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."

Your comments and opinions are appreciated. Please send them to wgstevens2@gmail.com . 

Layoff or Time Off

Things to think about when running your business. Given the very hard economic times more companies are looking to lay off employees to reduce their overhead and fixed costs, thus to boost profits.

I would look at an alternative approach that may be the best of both worlds, keeping fixed costs low and retaining the employees you have worked so hard to train and grow with your business, to say nothing about loyalty. Well what is this magic elixir? Have employees take unpaid time off casting it as unpaid vacation or personal time. Look at what Dell has done!! Exactly that and they have a great loyalty base because of it. Well think about it if this works for your business.

Strategy Adjustments or Concept

Some companies are adjusting their strategies to compensate for the current economic conditions, but if "strategy" is the long-term blueprint for an organization, why change it for temporary insecurity?

Michael Porter, Harvard Business School professor and leader of the University's Institute for Strategy and Competitiveness, told the senior-level executive audience at HSM's World Business Forum in late September that many leaders are misinformed about how to develop long-term competitive strategy plans for their companies. They often confuse strategy with some type of action, such as merging, internationalizing or outsourcing. Other flawed concepts are strategy as aspiration (becoming the "tech leader" or to "grow"), and strategy as mission/vision statement. "Companies spend days arguing over which six words go in the sentence. It's a concept. Don't confuse it with strategy," said Porter.

A simple, yet accurate, way to test whether your organization is on the right strategic track is to see if your entire management team would be able to independently articulate the same thing. If they can't, Porter said, you don't have a true strategy.
There are five tests of a good strategy, Porter outlined:

• A unique value proposition. "If you don't have one, you're competing on operational excellence but unlikely to achieve superiority."
• A different, tailored value chain. "If not, you are competing on operational excellence — who can do the same thing better?"
• Clear tradeoffs, and choosing what not to do. "If you choose what to do, you have to also choose what not to do because they are incompatible. It's very hard because tradeoffs limit opportunity."
• Activities that fit together and reinforce each other. Porter said to harness the synergies across the value chain instead of discrete advantages.
• Strategic continuity with continual improvement in realization. "Strategy takes about three years to kick in. If you shift strategy every year, year and a half, you'll never get there."
  

As the economic markets fluctuate by the moment, the senior leaders who presented at Argyle Executive Forum's CEO Leadership Forum in early October also had long-term strategy on their minds, and one CEO summed it up best: "If you are not in a crisis, assume you are."

Your comments and input are always appreciated, please email me at wgstevens2@gmail.com .

Coaching Tips - October 2008

This month’s tips come from Charlie Goretsky, one of the newest members of the CCI team. Given that strategic thinking, planning, and measuring progress on strategic goals are areas within the scope of his expertise, we asked him to write about just that.

Great leaders think broadly, in an inter-connected manner, and into the future. They anticipate trends, understand their customer’s needs and competitor’s strengths, and have an awareness of global trends that may impact the ability to achieve their vision. Strategic thinking is essential for success in leadership positions, and can be developed. The key lies in understanding the world around you, both inside and outside your organization, with a conscious effort to collect, analyze and apply knowledge to both your strategies and daily work. To develop and hone your strategic thinking:

Broaden your perspective beyond your current function or role in the organization. This requires ongoing consideration of potentially interrelated factors by staying abreast of the strategies employed and the challenges faced by your peers in other parts of the company. This is done in through building relationships and communications with the leaders of other functions, and by scanning their reports and presentations for issues that impact them and potentially yours. How might the CFO’s stated concerns about capital spending levels impact your strategy to increase investments in necessary technology or facilities upgrades? How does a lowered sales forecast for the next two quarters impact your customer service strategies? Understanding how other functions interconnect can lead to improved decision making for the overall organization.

Know your marketplace and competitors. What are customers buying in your segment of the economy? How are they using the products and services provided by you and your competitors? With whom are you in direct competition, and how do their products compare with your own? Not the sole domain of the marketing or product development teams, all leaders need to be aware so they can improve service delivery, product quality, and internal resource allocation. This is also crucial information to be used when recruiting top talent. Success is driven by understanding your employment offering relative to peer companies and how to target your recruiting efforts to both bolster capability shortcomings and assess cultural matches with potential recruits from competitors.

Anticipate future trends, changes and consequences. This drives quality executive thinking and action. Keeping abreast of technological, political, regulatory, economic, social, and workplace trends arms leaders with the ability to prepare for and respond to changes well in advance, thus leveraging opportunities and avoiding downturns. Scanning news clipping services, newspapers, magazines, blogs, business and trade publications, attending professional meetings and networking will all keep you informed about the current and future business environment.

Focus on possibilities. This is the most challenging, in as much as it requires both creativity and a positive outlook, which can be difficult when you are facing serious and multiple challenges to your business outlook. While some people certainly come by this naturally, all leaders need to scan the environment for clues and cues to how operations can be improved or the future re-imagined. An excellent vehicle to both communicate your thinking and gain different perspectives and ideas is an annual or quarterly brainstorming meeting with your team to discuss what could enhance or accelerate the achievement of your organizational vision. Time away from the office to collect and crystallize your thinking can reinvigorate your focus on possibilities.

Practice integrative thinking and action. Take disparate concepts and ideas from a variety of venues and disciplines and bring them together for unique solutions to old issues and challenges. Look outside of the traditional solution sets for answers. Integrating all that you learn from the previously mentioned actions and bringing them back to your own organization creates informs great tactical decision-making and strategic direction.

Charles is a former executive of Reed Business Information and a good colleague. We had the opportunity to work together in the late 90's and colloborated on many human resources issues and topics. He is a consultant for CCI in California.