Thriving in the New Economy

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Have you ever wanted to get into the minds of some of the most inspirational dealmakers in the business world? After working at CNBC for almost a decade, I have been lucky enough to talk to some of them on a regular basis. Realizing not everyone has that kind of access, I decided to open up my “trillion dollar” rolodex (it’s called that in my industry since I have a trillion dollar money manager, a dozen billionaires and countless millionaires in it) and ask them to open up and reveal some of their winning strategies on how they view a crisis (particularly the fire sale of Bear Stearns, the bankruptcy of Lehman Brothers and the credit crisis) but more importantly *how* and *why* they executed certain strategies. It’s those two elements that make successful leaders.

[wcm_restrict]Gerald Greenwald, Founder of Greenbriar Equity Group, former CEO of UAL Corp, parent of United Airlines and former Chairman of Chrysler Motors, has followed a mantra he learned from Lee Iacocca back when the two were leading Chrysler out of the first government bailout. He told me, “If you are a leader, it is so much easier to slow down 10 stallions you have, than it is to get 10 mules to keep going.” How true! It’s advice like that anyone can use, whether you are running a multi-billion dollar corporation or a small business.

Leaders in the new economy also have to realize growth will be more modest. Gone are the go-go days of credit. We are experiencing what Goldman Sach’s Abby Joseph Cohen and Pimco’s Paul McCulley call “the new normal”. McCulley says, “The economy is weighing the invisible hand of the markets and the invisible fist of the government.” Ramius’ Peter Cohen said in this new economy, ” There will be a reshaping of the financial industry…. and people will work for less; they will work harder, and they will think out of the box and be creative.” Cohen, saw the changes in the financial sector ahead of time and took action. In a reverse merger, his company acquired Cowen Group. The $195 million dollar deal opened new doors for Ramius by providing access to the public markets, and the ability to forge a path in the beaten-down investment banking sector. This is just one kind of example in the book that shows leaders are more than rhetoric. They take action.

Home Depot Co-Founder and Chairman and CEO of Invemed Associates Ken Langone said, “I am always looking for opportunities. One person’s pain is another person’s pleasure.” Looking at a crisis from a glass half-full perspective is not only how these leaders operate, but how they seize on finding the right opportunity. BB&T’s Kelly King says, “When your competitors are weak, you certainly try to take business away from them if you can.” BB&T did just that. On August 14, 2009, BB&T purchased Colonial Bank’s (one of their rivals) loans, deposits, and most of its assets from the government.

All too often CEOs are painted as “cheerleaders”. Rhetoric is just a waste of air and can also be detrimental to a company, costing a hit in shareholder value. Larry Lindsey, CEO of the economic advisory firm The Lindsey Group, stresses objectivity is just one of several qualities leaders must have in order to stay ahead of a crisis. Lindsey says, “Objectivity requires perspective…. By far, the most useful tool in acquiring a perspective is a knowledge and sense of history.”

We all know leadership is vital. A good leader provides stability for a company. As both Jim Lentz, CEO of Toyota U.S.A and Gerry Greenwald both stress, you can’t save your way to profitability. Action is needed.[/wcm_restrict][wcm_nonmember]

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About the Author

Lori Ann LaRocco is the author of, Thriving in the New Economy: Lessons from Today’s Top Business Minds and is the Senior Talent Producer at CNBC and one of the producers of the CNBC show Squawk Box.

StrategyDriven Resource Projection Warning Flag Article

Resource Projection Warning Flag 1 – Assumed Discretionary Effort

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Every day, executives, managers, and employees are asked to do more and more with less and less. Sometimes this pressure results in work streamlining, better prioritization and new more efficient methods. At other times, individuals simply accomplish more because they work additional uncompensated hours.[wcm_restrict plans=”40897, 25542, 25653″]

Not all discretionary effort is created equally. Our human condition necessarily means that longer work hours will result in mental and physical fatigue; reducing an individual’s productivity during these times relative to core working hours. Over time, extended separation from family, friends, and the outside world in general results in emotional fatigue that drains and distracts an individual; lowering his or her productivity. While some will gladly invest the extra effort, others will not; resenting what they believe to be an excessive workload and diminishing their overall engagement and subsequently their productivity. Thus, discretionary time is not equivalent to core work time and will vary in value from individual to individual.

Factoring discretionary effort into business planning is therefore problematic. But the question remains, should it be done at all?

Some workforces have a cultural tendency to work uncompensated hours. Over time, leaders may come to expect and then demand this effort. But fundamentally, discretionary effort is just that, discretionary, and its availability cannot be counted upon. Workers often cannot be compelled to work these uncompensated hours and any attempt to do so would likely result in at least some worker attrition.

The answer then is that discretionary effort should not be factored into business plans, project plans, or any other personnel resource loaded plan.

Including discretionary effort in organizational planning occurs because of either a lack of preventive measures and/or errant behaviors. While not all inclusive, the four lists below, Process-Based Warning Flags, Process Execution Warning Flags – Behaviors, Potential, Observable Results, and Potential Causes, are designed to help organization leaders recognize when discretionary effort is being included in resource estimates. Only after a problem is recognized and its causes identified can the needed action be taken to move the organization toward improved performance.

Process-Based Warning Flags

  • Business and project planning processes drive or allow planners to use a greater than 40 hour per week work estimate
  • Project software default calendars set for greater than 40 hours of work per week for personnel resources
  • Personnel scheduling calendars, such as Microsoft Outlook or Lotus Notes, set for greater than 40 hours per week of availability by default

Process Execution Warning Flags – Behaviors

  • Executives, managers, and supervisors demand more than 40 hours per week be used as a standard resource planning assumption
  • Executives, managers, and supervisors automatically cut personnel resource requests by a standard amount such as 10 percent or more
  • Executives and managers allow greater than 40 hours per week resource needs to go unfunded and/or unbudgeted

Potential, Observable Results

  • Projects are frequently not completed on time
  • Productivity is lower than expected
  • The organization experiences higher than industry normal attrition
  • Approved business and project plans require more personnel resources to execute than have been assigned

Potential Causes

  • Executives, managers, and supervisors are driven to do more with less – often reinforced by the organization’s rewards system
  • Individual attitudes tend to be skewed toward a ‘live-to-work’ rather than a ‘work-to-live’ bias
  • Cultural belief that uncompensated work is acceptable

Final Thoughts…

Personnel resource availability above 40 hours per week can be considered when planning if such work is compulsory. Such instance may include:

  • represented employee contracts containing provisions for forced overtime
  • pre-established (before hiring or renegotiated and compensated after hiring) professional work standards requiring over 40 hours of work per week as is often established for:
    • plant outages
    • rotating shift work

The ‘live-to-work’ causal factor contributes to a culture that values uncompensated work. This belief is often associated with the members of the Baby Boomer Generation that currently comprises a large portion of the workforce. Generations X and Y, however, tend to not share this believe or value uncompensated work far less than Baby Boomers. Therefore, as Generation X and Y’s portion of the workforce grows, the ‘live-to-work’ value is likely to diminish; affording organizations less discretionary effort over time. This makes the planning for discretionary effort in long range business plans particularly risky.[/wcm_restrict][wcm_nonmember plans=”40897, 25542, 25653″]

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The Apollo Attitude – When Failure is Not an Option

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It’s hard to beat the movie Apollo 13 for drama. Over 200,000 miles from Earth, in the vacuum of space, an explosion disabled a space capsule on its way to the Moon.

The mission was over. And it would have been reasonable to assume the astronauts’ lives were over, too. Yet three days later, the astronauts were standing on the deck of an aircraft carrier.

Then there was the three-masted sailing ship Endurance, which left England in August 1914 under the command of Ernest Shackleton with twenty-eight men determined to cross Antarctica by sled.

The Endurance ended up trapped and crushed to splinters by ice floes. The men lived on the Antarctic ice for another two years.

Total survivors out of the original twenty-eight men? Twenty-eight.

What if you approached every challenge in your life and in your work as if you simply HAD to overcome it? I’ll tell you what – you would do it. You would find a way, and you would get it done.

[wcm_restrict]Whenever I hear the expression, “Failure is not an option,” I think of Apollo 13. I think of Ernest Shackleton and the men of Endurance. I picture them confronting these utterly impossible situations and saying, “Well, lads, let’s see what our options are.”

I then picture them reaching into a pocket and pulling out a scrap of paper. Under the title OPTIONS are two words: SUCCESS and FAILURE.

Like heck. Why would failure EVER be an option? So why not take it off the list entirely?

We’ve all heard the hundred or so reasons such and such a thing simply cannot be done, the many, many reasons failure is the only option.

Tell it to Shackleton. Tell it to the astronauts of Apollo 13 and the engineers at Mission Control in Houston. Tell them all about the insurmountable obstacles you face.

Better STILL – why not just take FAILURE off that list of options?

Show me the baby!
I have a friend who I dearly love but who always used to explain why something couldn’t be done. Excuses came easy to her. Then one day her boss gave her a priceless saying to remember: Don’t tell me about the labor pains – show me the baby.

Before a project begins, I don’t want to hear all the reasons it can’t be done. After the project is done, I don’t care how many hours you worked. I don’t care how many obstacles you hit. Save it for your memoirs. Just show me the baby.

Decide now that whatever project or challenge you currently have before you simply cannot be allowed to fail – that you must use the ingenuity of the Apollo crew and the fortitude of the Endurance crew to make it happen. It’s a completely different way of thinking.

But be careful – it’s addicting. Once you get a taste of achieving the impossible, it’s hard to quit![/wcm_restrict][wcm_nonmember]

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About the Author

Roxanne Emmerich’s Thank God It’s Monday!: How to Create a Workplace You and Your Customers Love is a New York Times, Wall Street Journal and #1 Amazon bestseller. Roxanne is renowned for her ability to transform “ho-hum” workplaces into dynamic, results-oriented, “bring-it-on” cultures in a day. Listen to the free 60-second audio with teammates each Monday to clean up the craziness in your workplace and focus on getting massive results. Sign up today at www.ThankGoditsMonday.com.