Trends come and go. In its Innovation special Business Week takes a look at leading trends in the business community. Last year was all about execution, but that was then… (While you’re there be sure to check out the Special Reports.)
This year’s emphasis on strategic thinking suggests that, like an individual recovering from a personal upheaval, businesses today are taking stock: reviewing their options, rethinking their strategies, considering new opportunities and innovations.
Another trend is the questioning of CEO compensation, once strictly the province of the board of directors and a few consultants, today it’s everyman’s topic of conversation. Do you think today’s CEO compensation, not just on Wall Street, but in general, is fair and appropriate? Do the incentives work? Do they focus too much on risk taking or do they encourage excessive caution? Read this interview for some excellent insights.
Speaking of fortunes, what do the elder statesmen of Wall Street, guys like George Soros, Nicholas F. Brady, John S. Reed, William H. Donaldson and John C. Bogle have in common with you and me? Surprise, surprise, they all believe that Wall Street needs to be reigned in.
They grew quite wealthy in finance, typically making their fortunes in the ’70s and ’80s when banks and securities firms were considerably more regulated. And now, parting company with the current chieftains, they want more rules.
Another rich guy is John Thain, a trend of his own. Fired from his CEO aerie he has landed on his golden feet at CIT. The man who didn’t see anything wrong with spending $1.2 million renovating his office in 2008 is now responsible for the company that provides financing for SMB, as well as being the third-largest railcar-leasing and aircraft-financing firm in the U.S. In his hands rests much of our future—at least he’s not planning to redecorate.
“This is a company that’s over 100 years old and its core business is lending to small- and medium-sized companies,” Thain said yesterday in an interview. “If we’re going to get the U.S. economy to continue to grow, if we’re going to create jobs, then we need to have this kind of a company do well.”
Our final trend comes from Forbes, famous for the way it slices and dices lists of wealthy people. Its newest look offers yet another one—billionaires under age 40.
Of the current eight, four are from China, three are from the U.S. and one is from Japan.
Investment bankers in the US have begun using equity derivatives to convert restricted shares paid as bonuses into cash, side-stepping new guidelines on remuneration which were designed to prevent bankers cashing out for at least three years, according to a headhunter.
Popular wisdom wants us to believe that leaders ‘do the right thing’, but when it comes to those on Wall Street it’s strictly the right thing for themselves.
It is reality that bloggers, coaches, academics, and other gurus write about how to engage the workforce, build cultures, develop leaders, motivate, and increase retention; companies pay substantial amounts to coaches and consultants to develop and implement programs; management agonizes on how to increase productivity through better use of its human resources.
It is reality that many companies are moving to “just in time” workforces; using temps and contractors at all levels with no health insurance, no vacation, no benefits—hire when you need them and dump when the project is done.
Business Week offers a comprehensive overview of this trend in a cover story entitled The Disposable Worker.
The forecast for the next five to 10 years: more of the same, with paltry pay gains, worsening working conditions, and little job security. Right on up to the C-suite, more jobs will be freelance and temporary, and even seemingly permanent positions will be at greater risk.
Obviously, there are people, especially at more senior levels, who have no problem with this approach; they relish the movement, change and challenge.
But they are the minority.
Everything described in the first paragraph is geared for companies that actually hire their workforce.
Typically, it’s a different set of experts who advise companies on outsourcing and temp workforces.
I ask you:
What will motivate workers to contribute at the level needed in today’s competitive global enviornment when they have nothing vested in the company?
Why should people who may not be there tomorrow put forth the initiative that underlays all leadership today?
How do you engage people when they have no idea how long they’ll be around?
In short, how do you get people to care when they know without a doubt that the company doesn’t care about them?
I think if I read one more op-ed piece saying the path to improving US education is paved with better teachers I’ll scream.
I’m not saying that good teachers aren’t important, but I don’t believe that teachers are the root of the problems.
Before I start with examples, let me ask you this: how well would you perform if you were
terminated for insisting that projects not only be done, but done on time;
poorly compensated in comparison to most people with similar education and experience, but in other industries;
subject to pressure, tirades, insults and having people constantly go over your head to change your decisions; and
shown little respect by your direct reports, indirect reports and management.
Does that sound like an environment that would encourage you to do your utmost? I actually find it surprising that there are as many good, dedicated teachers as there are.
Staying with the current analogy, direct reports = students, indirect reports = parents and management = administrators.
Teaching is like any other form of work—it thrives in a good culture, sags, wilts and gives up in a bad one.
The Dallas Independent School System is a good example of what is happening. DISD is where the teacher was fired at the instigation of parents for being too tough and giving homework—the fact that the kids scored well on tests didn’t count.
It’s DISD that hired new teachers in 2007 with no way to pay them leading to a $64,000,000 budget shortfall that grew to about $84,000,000 in 2008. Their solution was to layoff the teachers—no damage to the administration idiots—maybe they all took math from teachers who passed them rather than lose their jobs.
Her rise in DISD in a span of three years has been frowned upon by some observers. She was making $87,000 as a division manager in 2006 and ended her career grossing around $140,000.
Some DISD trustees had questioned an organizational chart change that left her husband overseeing the department that she worked in. Her boss was reporting to her husband.
Ya think?
And then there is the saga of Taylor Pugh, AKA Tater Tot, who was growing his hair so he could donate it to a charity that makes wigs for cancer patients—but his suburban Dallas school saw it as reason for in-school suspension for violating the district dress code.
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Back to our analogy. How engaged, productive and innovative would you be working for a company where management performed similarly?
Dallas isn’t alone; it has plenty of company across the country.
So before ranting and blaming the dismal state of US education on teachers, check out your district and state administrations—and then look in the mirror.
When you’ve coached or written a blog for years you can find yourself answering the same questions over and over, but that’s OK. I’d rather have you drop me a line or use the chat box in the right frame than search for something and become frustrated.
And that’s what happened last night about 10:30.
“Ken” pinged me and asked if I remembered a post that talked about compensation and used a stool as an analogy for the company. He said he’d read it a few years ago and wanted it as part of a presentation for his boss.
No Problem. I’ve used that analogy with clients for years and in posts three times. After I gave Ken the URL he said I should post it again.
I agreed, but added a bit to cover the current situation.
Success is like a 3-legged stool—
Customers / equity-holders / employees
If one leg becomes too long, the stool tips over!
Taking care of the first two is a given, whereas taking care of employees seems to be based on the labor market.
If the market is hot, people are showered with money and perks, as the market cools, so does employee care.
Yes, you can buy people and you can replace people, but it’s very expensive.
In the kind of tough economic times we’re going through people understand when there are no raises and even when their compensation is cut to avoid a layoff.
But if that treatment extends only to workers and lower management, while executive compensation and perks continue, you can count on a steady exodus as business improves.
When the market is tight and companies are throwing cash, stock and perks right and left it’s the wise manager who remembers that people who join for money/stock/perks will leave for more money/stock/perks.
2010 is not only a new year it’s a new decade; are you looking forward to big changes in your life? I am.
I thought I’d take today to tell you about mine and you can use comments to talk about yours.
Fortunately it’s not just good things that end, but also the not-so-good and the downright rotten. That includes 2009 and converting a consulting service into easily useable software and creating a new form of “Help” that is actually useful and useable.
The biggest change on my horizon is (finally) the release Q1 of Option Sanity™, a SAAS (software as a service) product that’s been a bear to develop.
Another change stems from the demise of Leadership Turn, the blog I’ve written for b5 Media for the last two-and-a-half years.
Many of my regular readers from LT are joining our community and that will increase our interaction, i.e., more comments, discussions and requests to address topics of interest to you.
I’m incorporating 3 of Leadership Turn’s weekly features
Tuesday’s Ducks in a Row: offering what-to’s, why-to’s and how-to’s about culture, managing and motivation;
Thursday’s Leadership’s Future: musings and commentary on topics that affect where we go in the future, such as education, attitudes, etc.;
Sunday’s Quotable Quotes which will run in addition to the mY generation comic
Saturday’s article links will be under the new category of Expand Your Mind;
More of my own take on ‘leadership’—why initiative equates to leadership and how it should be a core competency and not just a vision by the person out front;
By the end of the month all my content from Leadership Turn (there were other authors previously) will be posted here and searchable from the main search box (we’re working out the technicalities now).
I have other major changes in the works, either too personal or too boring to share, but since those I’ve mentioned account for 85% of my focus you aren’t missing anything—suffice it to say I’m one of those dinosaurs who chooses not to live my private life online.
Management M&Mis a new weekly feature focusing on various management misses and messes. I hope you’ll send examples from your own experiences for me to use—anonymously, of course.
I found an interesting bit of idiocy in a recent McKinsey survey (free registration required),
Even though overall reliance on financial incentives fell over the past 12 months, a number of companies curtailed their use of nonfinancial ones as well. Thirteen percent of the survey respondents report that managers praise their subordinates less often, 20 percent that opportunities to lead projects or task forces are scarcer, and 26 percent that leadership attention to motivate talent is less forthcoming.
The technical term for this is ‘how stupid can you get’.
At a time when corporations large and small need the highest level of employee engagement just to survive, let alone thrive, they are making every effort to convince their staff that they don’t give a damn about them.
This attitude essentially says ‘you are worth neither money nor time, but I want you to work harder and produce more than ever before’.
The survey also touches on the reason for the idiocy.
…nonfinancial ways to motivate people do, on the whole, require more time and commitment from senior managers. One HR director we interviewed spoke of their tendency to “hide” in their offices—primarily reflecting uncertainty about the current situation and outlook. This lack of interaction between managers and their people creates a highly damaging void that saps employee engagement.
Well, doh.
The higher you move in an organization the more you are required to accomplish your goals through the efforts of others, but the less time you make to do that.
3M is one of the few companies in private industry that is still active in basic research; it pays off because the results are immediately available to the R&D groups.
What’s the secret to fostering this kind of culture; to getting disparate individuals and organizations working together?
Collaboration doesn’t happen by accident.
The company maintains a “…database of technical reports written by the more than 7,000 scientists at the company. Those scientists are spread between a corporate lab devoted to basic research, 40 division labs that essentially form a bridge between that basic science and the market, and 35 international labs.”
It enables “TechForum, an employee-run organization designed to foster communications between scientists in different labs or divisions.”
“Three years ago, 3M also created the “R&D Workcenter” networking Web site, which Mitra describes as a “LinkedIn for 3M scientists.”
But 3M knows that all the technology, all the meet-ups and all the talk aren’t always enough—the wrong kind of competition will quickly kill collaboration.
“Such sharing of resources is almost impossible when different units of a company feel they are competing against each other to deliver better financial results or the next breakthrough technology. But at 3M, employees are expected to collaborate—and are evaluated on their success.”
3M clearly tells its employees at all levels that they are expected to share across all boundaries, but just telling people doesn’t always work. It’s easy to share information without the added intelligence that makes the information truly valuable.
So they measure the success of the effort, not just the act. That is very different—it puts the money where the mouth is and taps into employees’ vested self-interest.
Trends come and go. In its Innovation special Business Week takes a look at leading trends in the business community. Last year was all about execution, but that was then… (While you’re there be sure to check out the Special Reports.)
I doubt there are any Wall Street bankers who don’t consider themselves leaders and they exist in a world where innovation never stops.
It is reality that bloggers, coaches, academics, and other gurus write about how to engage the workforce, build cultures, develop leaders, motivate, and increase retention; companies pay substantial amounts to coaches and consultants to develop and implement programs; management agonizes on how to increase productivity through better use of its human resources.
When you’ve coached or written a blog for years you can find yourself answering the same questions over and over, but that’s OK. I’d rather have you drop me a line or use the chat box in the right frame than search for something and become frustrated.
2010 is not only a new year it’s a new decade; are you looking forward to big changes in your life? I am.
I found an interesting bit of idiocy in a 
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