Create

your future,

because

you can’t

edit your past.

This is one of those rules that everybody knows, but keep trying to circumvent anyway. In fact, people are often so busy editing they forget to create.

What they don’t get is that when you spend your energy on creation and execution you won’t need to worry about editing.

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Dan McCarthy had a terrific post on why choosing leaders is a gamble—be sure to read the comments.

We see the idiocy of assuming that past performance is always a good predictor of the future all the time, but it seems especially true at senior levels.

First, there is the penchant for identifying ‘high potential’ starting in kindergarten and providing lots of extra training and coaching, while ignoring those who may be late bloomers or less obvious (read quieter).

Then there’s the Peter Principle, which is not only alive and well, but functioning even more efficiently today than it was when Laurence J. Peter first described it back in 1970.

We relish looking at the past to predict the future, thus choosing to ignore all extenuating circumstances and surrounding factors that played a role in the person’s performance.

We forget, or ignore, that

• one manager’s star is another manager’s bomb;
• the skills needed to take advantage of an economic expansion are very different from those needed in a downturn; and
• turmoil or an ongoing crisis in a person’s personal life often impacts their performance at work.

Last, but not least, we need to get over our love affair with the idea of the hero-leader who, with a wave of the hand, can part the seas and eliminate obstacles.

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Image credit: Valerie Everett on flickr

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It’s been awhile since I posted one of my rules and this seems like a good time to give you another.

At first look it may seem to be targeted to a teen or twenty-something audience, but I don’t think so.

I think it’s applicable to anyone breathing.

It’s what you learn
after
you know it all
that counts!

Image credit: Mark Brannan on flickr

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Life is all about choices; every day we make choices and as we do our world changes and we move in a new direction.

Some choices are conscious; others are made with little to no thought.

Some choices lead to good outcomes and others not, but one thing is for sure.

No matter what happens, your light is never truly hidden unless you believe it is so.

Always make your best choice, but if it doesn’t work, know that the darkness will pass and you will change direction again with the next choice.

Image credit: Lucretious on sxc.hu

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(Please take a moment to share your thoughts in comments.)

Now click to see a great take on a common business problem

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Much will be done today to commemorate the lives lost on September 11, 2001. The story I’m going to share has a different focus than most and one I believe is worth your time.

Among those who died that day was the husband of a woman I knew casually and because our acquaintance was casual I was surprised when she called nearly six months later.

I’ll call her “Kerry” and we talked for hours, but the kernel I want to share is this.

She needed support to move; not just move on, it was too early for that, but to physically move.

Kerry said the reaction to “Craig’s” death changed when people found out he died in the attack. It changed from sympathy or empathy to an almost macabre interest in how she felt because he died “that way.”

Many seemed to feel that her politics should change (she is ‘liberal moderate’, her words) and that the event should be the main focus not only in her life, but also for her two young daughters and she didn’t want that.

Kerry said she called me because she remembered my saying that I found it sad that John Kennedy Jr.’s life seemed to be defined by his father’s death; that he never was able to become anyone other than the little boy who saluted at the funeral.

Kerry said that she didn’t want her kids to be forever known as “Kristy/Jenny-her-father-was-killed-in-the-September-11-attacks”

The problem was that many of her family and friends were horrified at how she felt. They acted as if losing Craig September 11 made his death a national symbol, not a personal tragedy.

We talked many times over the next few months and the upshot was that Kerry did move far away where no one knew them. When Craig’s death came up in conversation Kerry just said that her husband had died; she said when her daughters were mature enough she would tell them what happened, but not until they had the opportunity for a normal life—not one filled with other people’s baggage.

I think for Kerry I was “the stranger on the plane,” the uninvolved person to whom you can say anything because you will never see or hear from them again and I was honored to play that part.

The death of a parent is always tragic. I know; I was five when the driver of the car in which my father was traveling fell asleep at the wheel and drove off a mountain road.

The point I want to make today is that we don’t forget, but we do move on and as we move we grow and change.

No matter how horrendous the event we all have the ability to choose what defines us and what memories rule our lives.

Never allow others to force you into a role that fits their view of what should define you.

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Image credit: StarLight on sxc.hu

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Much will be done today to commemorate the lives lost on September 11, 2001. The story I’m going to share has a different focus than most and one I believe is worth your time.

Among those who died that day was the husband of a woman I knew casually and because our acquaintance was casual I was surprised when she called nearly six months later.

I’ll call her “Kerry” and we talked for hours, but the kernel I want to share is this.

She needed support to move; not just move on, it was too early for that, but to physically move.

Kerry said the reaction to “Craig’s” death changed when people found out he died in the attack. It changed from sympathy or empathy to an almost macabre interest in how she felt because he died “that way.”

Many seemed to feel that her politics should change (she is ‘liberal moderate’, her words) and that the event should be the main focus not only in her life, but also for her two young daughters and she didn’t want that.

Kerry said she called me because she remembered my saying that I found it sad that John Kennedy Jr.’s life seemed to be defined by his father’s death; that he never was able to become anyone other than the little boy who saluted at the funeral.

Kerry said that she didn’t want her kids to be forever known as “Kristy/Jenny-her-father-was-killed-in-the-September-11-attacks”

The problem was that many of her family and friends were horrified at how she felt. They acted as if losing Craig September 11 made his death a national symbol, not a personal tragedy.

We talked many times over the next few months and the upshot was that Kerry did move far away where no one knew them. When Craig’s death came up in conversation Kerry just said that her husband had died; she said when her daughters were mature enough she would tell them what happened, but not until they had the opportunity for a normal life—not one filled with other people’s baggage.

I think for Kerry I was “the stranger on the plane,” the uninvolved person to whom you can say anything because you will never see or hear from them again and I was honored to play that part.

The death of a parent is always tragic. I know; I was five when the driver of the car in which my father was traveling fell asleep at the wheel and drove off a mountain road.

The point I want to make today is that we don’t forget, but we do move on and as we move we grow and change.

No matter how horrendous the event we all have the ability to choose what defines us and what memories rule our lives.

Never allow others to force you into a role that fits their view of what should define you.

(This post also appears today at Leadership Turn)

Image credit: StarLight on sxc.hu

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I had a thought this morning and asked Jim Gordon, who draws mY generation, the Sunday comic on my other blog, to draw my thoughts for today.

He did a great job; I only wish I believed that it would happen sooner.

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Image credit: MAPpingCompanySuccess.com

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In previous posts I shared my views regarding the shape of the recovery and shape of employment in the future.

The President and Congress have told us, this recovery will also cost a few trillion, so the open question is: how the value of the dollar will change in the months and years ahead? Deflation, inflation, or both?

The following is what I think may happen.

First, the Fed Rebuilds the Banks

According to the Fed, total mortgage debt exceeded $14 Trillion as of Dec. 31, 2007.The best estimate is that 10-20% of that debt must be written off due to the drop in house values. That’s $1.4-$2.8 Trillion. Assuming US banks hold only 50% of that debt, that’s $700 Billion to $1.4 Trillion that needs to be removed from their balance sheets for mortgage debt alone. That does not include credit card debt, auto loan debt, student loans, or business debt. The Fed will have to print enough funds to cover the debt, lending to the chosen banks. Those funds will not provide any stimulus, as the dollars will simply re-establish the reserve levels that banks are legally required to carry.

Second, Consumers Start Saving—Near Term Deflation

Of the US $14 Trillion GDP, 70% ($10 Trillion) is driven by consumer spending. If consumers increase their savings rate from -2% to +5%, another $700 Billion (7% of $10 Trillion) will be removed from the economy, creating an additional 5% drop in the GDP. In the short term we will have deflation, driven by declining demand. Sure enough, that’s just what has happened in the past four quarters.

Third, the World Redeems Dollars—Long Term Inflation

With over $7 Trillion dollars flowing internationally as global reserves outside the US ($2 in China, $2 in Japan, $2 in OPEC, and $1 in Europe), plus the $7 Trillion the Fed has already printed in the past year, over $14 Trillion (1x GDP) in cash is beyond the control of the US.

Sometime in 2010-2011, the US may see currency deflation as other countries spend their dollar reserves to dig out of their own recessions. Remember that we produce very little of our own hard goods, They come from China, Japan, Korea and other countries. We buy energy from OPEC. If the dollar drops vis-à-vis Korea, Japan, China, and OPEC, then the US may see an increase in the price of hard goods and energy.

Granted, any price rise will be moderated by the domestic drop in consumption, but the US no longer controls the price of global goods, services, and energy. The US share of global commerce is 23%, and declining. Global consumption will increase, regardless of the US. Prices will rise, and the dollar will likely decline against other currencies—a one-two punch for the US.

What Do You Think?

What is your forecast for GDP and deflation/inflation? How does it affect your business planning?

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Economic pundits, eagerly searching for signs of the recovery, are grasping at almost anything. “The rate of decline has slowed.” “Unemployment has stabilized.” “The cardboard box index has bottomed out.” And the shape of the recession and recovery has been predicted to be a V,  W,  L, or even a double-bounce W.

I think they’re all wrong.

The old economy will never come back.

This economic meltdown is much like a forest fire. After the fire burns itself out, the storm may be over, but the burn area is fundamentally changed. It does not “bounce back.” It starts at a different place.  Sometime in 2010, the economy will stabilize, but it will not “come back.” We will go forward from a fundamentally different position. This new starting point will reflect the impact of deep, long-term, global trends in the nature of work, the value of the dollar, and our relationship to our government. The current recession is a convenient marker to recognize these trends.

Work Is Changing

The nature of employment will continue to change. The United States will continue to shift to a “just-in-time,” service-based workforce. The manufacturing sector will continue its decline, from 29% of GDP in 1950 to 15% in 2000 (see analysis by Dr. Mankiw). It will drop below 10% by 2010. You can construct your own labor trend at indeed.com. ( This website is a fascinating example of the business of data, which we discussed in the last three posts.)

Many new service-sector workers will be involuntary. Growing unemployment and under-employment in the United States (which will exceed 15% this year) is driving many people into self-employment as service workers. An analysis of Japan’s Lost Decade by Tom Coyner, long-time resident of Japan and Korea, provides one instructive example of this phenomenon, and some associated risks.

These new service sector workers will be driven to a “do-it-yourself” model for almost everything. They will have to provide their own health care plan, retirement plan, office arrangement, and business planning. Many of these workers will be home-based, with little differentiation. The most common product/pricing model will be piecework, with unit pricing based on the alternative of being completely idle. Ironically, one result will be the re-integration of work and home life.

Entrepreneurship is Changing

Investment capital will no longer be available for any but the most solid businesses; and the vast majority of these newly-independent service workers do not have plans to build large businesses. As a result, the successful ones will exhibit four common, positive characteristics:

Local—In a global world, being present still counts. A local service provider who can show up in person has a distinct advantage. In addition, some services simply cannot be outsourced. When your car is broken or your roof leaks, you need a local service person. For locally-based services we may see an increase in a local, personal relationship with service providers.

Immediate—Without investment capital to fund long-term research and development, independent service-providers and small businesses must focus on services that provide immediate value. The “cash-to-cash” cycle must be less than one pay period. Fortunately, credit/debit cards and other immediate payment methods support this trend.

Information-based—Information will provide significant improvements in service quality and competitive differentiation. For instance, simply finding a customer is difficult and expensive. Irritating prospects with unnecessary and unwanted sales promotions is also costly. Successful service providers will use information to target customers on a “just-as-needed” basis.

Green—Setting aside the discussion of whether the earth is warming or whether green is good, government policies will reward green activities preferentially. Independent service providers will offer green services or enhance green aspects of their existing services.

Start-Ups Will Explode in Unlikely Niches

The availability of many talented people and the flexibility of independent service providers will fuel new start-ups. While these may not completely replace the loss of investment capital, they will certainly provide an alternative path of low-cost labor for new businesses. The change may be refreshing, for us individually, and for our economy.

This is perhaps the greatest unknown—how much will individual creativity and inspiration replace financial engineering.

I am hoping for a few delightful surprises ahead.

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