I was interviewed recently on the 3 things a business can do to grow in a down economy.
-Steve
It’s the end of the world! There’s clearly no chance that the US will escape from the current economic downturn. Doom is at hand.
More and more people are telling me that they no longer listen to the news. They are finding the steady drumbeat of negativity too depressing. Their response is to shut out the noise.
Now, there’s something to be said for that approach. After all, if you don’t listen, you don’t have to pay attention to how bad things are. On the flip side, you might also miss something useful. Back in 1910 or so, legendary stock trader Jesse Livermore always read the newspapers, no matter how bad things were. When the economy finally turned, he was ready. Inside a year, he went from a million dollars in debt to a million dollars in the black. During the Great Depression, IBM’s Tom Watson always stayed current on the news: when conditions changed, his swift actions made IBM a huge success.
Perhaps ignoring what’s going on is not the best course of action, especially for CEOs and other business leaders.
The fact is, though, it is hard to listen to the news without feeling discouraged. It’s even worse in a world where the news is always on, as close as our computer or cell phone. Being tough and bucking up only works for so long. Eventually, even the toughest will get tired: a steady diet of discouraging words can undermine anyone’s confidence in a variety of subtle or not-so-subtle ways. So if the answer is not playing ostrich, and it’s not toughing it out, what does work?
The most important thing is to reframe excessively negative news into something more neutral or even positive. This is actually less difficult than it sounds, mainly because the news frequently appears worse than it actually is. In Edwin Lefevre’s classic, “Reminiscences of a Stock Operator,” he observes that the news media is always most excited and positive at the top of the economic cycle, and most dire and pessimistic at the bottom. Lefevre’s book was written in 1923, and his observation remains true today. Just because it’s easier to get the news doesn’t mean that the psychology has changed.
In a recent news report, one economist was claiming that hyper-inflation and total social collapse is just around the corner. Is that likely? I’m no economist, but I have to wonder how many people today remember “Dow 36,000?” James Glassman’s book was published at the height of the Internet boom: in October 1999, just a few short months before the market crashed in March 2000. Today, we’re hearing the equivalent of Dow 3600. The predictions of a rosy future stretching into forever were loudest, and most believable, at the top; what does that say about the news today?
What then is the best way to listen to the news and keep your outlook positive? There are several strategies used by master stock traders and other business leaders:
· Be contrarian: it’s always most euphoric at the top and grimmest at the bottom.
· Look for the hidden opportunities. When it looks like we’re doomed, that’s when things are turning.
· Don’t listen to every news broadcast or read every paper or website. Hearing the same stories over and over reinforces the feeling that you’re getting new information. In fact, you’re getting the same information, and it’s all usually from the same original source. Hearing something through multiple channels “tricks” us into giving it too much credence.
· For some reason, negative news frequently sounds logical and good news foolish. Stop and take a larger perspective. Don’t let your point of view become narrow.
· Each day, set aside some time to get away from the computer. Shut off the TV, put down the newspaper. Do something fun. Give yourself perspective.
· Don’t be afraid to act. It’s easy to get stuck looking for the perfect move. Sometimes, the important thing is just to move. Once you’re moving, it’s amazing how much more positive the news becomes.
While it’s certainly true that we can’t control the economy, we can control how we react to it. You can be sucked into the doom and gloom, or reframe and seize the opportunities that are out there. Tom Watson chose the latter. What’s your choice?
“What was the primary means of motivation in those days?”
“Fear.”
— Carl Reiner and Mel Brooks, The Two Thousand Year Old Man
For the 2000 year old man, fear may have been a very effective motivator: when he saw a lion, he was motivated to run the other way. That, in a nutshell, is the problem with fear. Fear doesn’t make someone move toward safety; it makes them move away from danger. Same thing? Not really. In jujitsu, pain can be used to invoke a fear of injury. Someone experiencing that pain, and that fear, will move away from it, even if moving away means running full tilt into the nearest tree.
In business, the same phenomenon occurs. Faced with an unexpected problem or setback, the most common response is to highlight the threat to the organization and all the terrible things that will happen if the threat is not immediately countered. This practice of attempting to motivate people to work harder through fear – fear of competition, loss of market share, job loss, company going out of business, and so forth – may encourage harder work, but not necessarily more effective work. In the business environment, there are a lot of trees.
While fear gets the adrenaline flowing, it also narrows focus, reduces creativity, and makes it harder for people to recognize and change a losing strategy. This would be fine, except that what is actually needed in most situations is a creative solution, the ability to accurately assess whether or not a strategy is working, and the ability to quickly discard failing strategies. Avoiding premature decision making, no easy task at the best of times, only becomes more difficult. As we all learned in grade school, in the event of a fire, don’t rush for the door: proceed slowly and avoid panic. The same is true in business: rushing to a decision is almost guaranteed to lead to a bad decision.
So given that the business needs to get employees focused and energized to meet a potential challenge, how should it go about doing that?
The key is to recognize that the glass in not half empty. It’s half full. That makes a difference: instead of focusing on what you lack, focus on what you have going for you. Instead of fear, instill an atmosphere of optimism. There are several steps to accomplishing this:
Half empty or half full. A fearful team or an enthusiastic, creative team. It’s your choice.
Published at FreudTV.com
Scott Adams, of Dilbert fame, routinely features tales of bumbling managers. The popularity of Dilbert, and the degree to which it resonates with people, are a testament to his accuracy; indeed, Dilbert’s pointy-haired boss has become an iconic figure. Dilbert aside, however, I have observed that very few leaders are intentionally like the pointy-haired boss depicted in the comic strip. Rather, they engage in pointy-haired behaviors without realizing the effect they are having on the organization as whole. Let’s explore some examples of such behaviors and their unintended consequences.
1. Pointy-haired bosses break their own rules and figure either no one will notice or no one will mind because they are in charge. In one company, the CEO called everyone together to talk about the importance of really working hard and putting personal needs to one side in order to ship a product. At the end of the talk, he announced he was leaving for a two week vacation in Hawaii and wished everyone good luck. This did not go over well. One vice-president, who had apparently not been warned, almost choked on his coffee. When the CEO came back, two people had quit and the rest were up in arms.
2. The pointy-haired boss believes that he is separate from the group he leads. In fact, leaders are also group members, with a very important and well-defined role. Through their actions, leaders set the norms for their group. For example, the manager of a team at a large software company imposed a $.25 penalty for being late to meetings. When he was subsequently late himself, the team gleefully demanded he pay up. After a brief stunned moment, he tossed a quarter into the pot. No one complained about the fine after that. What the leader does is directly mirrored in the organization. When leaders find that employees are not living up to the standards of the organization, they often need to look in a mirror and see what example they are setting.
3. Pointy-haired bosses fail to recognize the culture they are creating. To be fair, it’s hard to see your own culture from the inside, and despite what many managers and CEOs believe, culture is formed not from what you say but from what you do. As MIT’s Ed Schein observes, “Culture is the residue of success: success in dealing with external challenges and success in internal advancement.” What behaviors are successful in the organization? What behaviors are rewarded? The very behaviors that people tell me they want to change are frequently the ones they are encouraging.”
4. Pointy-haired bosses lack an understanding of group/team dynamics. They like to say that their organization is “different,” and the research on group dynamics doesn’t apply. That’s like the people in early 2000 who said about the stock market that “This time, it’s different.” If you’re dealing with people, patterns repeat. It pays to recognize the patterns and understand how they are manifesting in your specific situation.
5. Pointy-haired bosses are often unable or unwilling to create a clear, compelling vision for their organization that gets everyone involved and excited. The best way to attract and retain top talent is to make people care about what the company is doing. That’s best done through painting a vivid picture of the outcome and creating clear goals.
6. Pointy-haired bosses motivate through short-term rewards and/or intimidation. They assume they know what their employees want, rather than taking the time to ask or to observe how people are responding. Short-term rewards and intimidation generate short-term spikes in performance, but build neither loyalty nor the desire to go the extra mile. Unfortunately, far too many people are willing to sacrifice the longer-term performance of their team for a short-term gain . In one company, the head of engineering “motivated” employees by inviting them to join him for happy hour in a bar on Friday nights. Had he asked, he would have realized that what the team wanted on Friday nights was to go home and have dinner with their families. Instead of motivating the team, he made them feel imposed upon.
Finally,
7. Pointy-haired bosses do not believe in asking for or accepting help. It’s not about asking for help, it’s about investing time and money to enable the company to accomplish its goals. The boss’s time is a resource; skilled leaders invest their time and the time and money of their business where that will produce the best return. Sometimes the best return is obtained by investing in an employee, sometimes by investing in a contractor.
Very few leaders deliberately engage in these Pointy-haired boss behaviors. Rather, their behaviors are the result of their own corporate success story. Therefore, for all that even one or two Pointy-haired boss behaviors can derail an organization, behaviors acknowledged to be counter-productive are very difficult to eradicate. Nevertheless, the ability of a manager or CEO to recognize these failings and invest in changing themselves is the true test of “great” leadership.
Published at FreudTV.
A great deal has already been said about the plane landing in the Hudson River last Thursday. What’s amazing to me is how many people have ascribed to luck the happy ending to what could have been a major disaster.
Was luck involved? Certainly!
It was lucky that the plane went down at a time of day when there was very little commercial shipping on the river.
It was lucky that the ferries were out at the time the plane went down.
It was lucky that the particular pilot just happened to have the necessary and appropriate training to recognize what had happened and not panic. Instead, he remained calm and relied on his training to glide a passenger jet down to the river.
As the old saying goes, luck is when 10,000 hours of preparation meets a moment of opportunity.
The lack of shipping and the presence of ferries wouldn’t have helped much if the pilot had lacked the skill to bring the plane down safely. It’s doubtful that he ever really believed that all that time he spent training, flying, and in a simulator would matter, other than for his own growth and development. What are the odds of a double-bird strike? What are the odds that just the right person was in the right place at the right time? Who could have known what would happen?
No one.
And this is the lesson for businesses. It’s easy to see what skills and knowledge are useful today. No one knows what skills or knowledge will prove useful tomorrow. Trends can change in a metaphorical heartbeat. When businesses cut training and development, or restrict the courses an employee can take (refusing to pay for a course unless a “clear” business need exists), that business is focusing entirely on the problems of today. It is not creating a workforce that is ready for the problems of tomorrow. Ready, in other words, to face unpredictable situations, unexpected problems, and unplanned for or unlikely circumstances.
On the other hand, those who have had the opportunity train and develop their skills, who have the freedom to explore their interests and learn the things that may or may not be obviously useful, are the most likely to come up with a good solution to an unexpected problem.
In the end, luck really does favor the prepared mind.
“What was the primary means of motivation in those days?”
“Fear.”
— Carl Reiner and Mel Brooks, The Two Thousand Year Old Man
For the 2000 year old man, fear may have been a very effective motivator: when he saw a lion, he was motivated to run the other way. That, in a nutshell, is the problem with fear. Fear doesn’t make someone move toward safety; it makes them move away from danger. Same thing? Not really. In jujitsu, pain can be used to invoke a fear of injury. Someone experiencing that pain, and that fear, will move away from it, even if moving away means running full tilt into the nearest tree.
In business, the same phenomenon occurs. Faced with an unexpected problem or setback, the most common response is to highlight the threat to the organization and all the terrible things that will happen if the threat is not immediately countered. This practice of attempting to motivate people to work harder through fear – fear of competition, loss of market share, job loss, company going out of business, and so forth – may encourage harder work, but not necessarily more effective work. In the business environment, there are a lot of trees.
While fear gets the adrenaline flowing, it also narrows focus, reduces creativity, and makes it harder for people to recognize and change a losing strategy. This would be fine, except that what is actually needed in most situations is a creative solution, the ability to accurately assess whether or not a strategy is working, and the ability to quickly discard failing strategies. Avoiding premature decision making, no easy task at the best of times, only becomes more difficult. As we all learned in grade school, in the event of a fire, don’t rush for the door: proceed slowly and avoid panic. The same is true in business: rushing to a decision is almost guaranteed to lead to a bad decision.
So given that the business needs to get employees focused and energized to meet a potential challenge, how should it go about doing that?
The key is to recognize that the glass in not half empty. It’s half full. That makes a difference: instead of focusing on what you lack, focus on what you have going for you. Instead of fear, instill an atmosphere of optimism. There are several steps to accomplishing this:
Half empty or half full. A fearful team or an enthusiastic, creative team. It’s your choice.
