After – Issue 45
It is a positive sign that people are now beginning to think about what happens after the recession. Maybe it’s the result of being sick and tired of feeling depressed about something we have little or no control over, or maybe it’s not a mind game and things really are getting better? Either way it is a nice change to hear words like ‘green shoots’ come into our dialogue. This may sound ungracious, but as thankful as I am of rumors, or real signs of a recovery, I must admit I am looking forward to something a bit more robust than a green shoot to get me excited, perhaps shrubbery?
The GFC is a little like the Olympics, the story doesn’t end with just getting there and doing something spectacular – it is about getting there and back that makes the journey epic. There is no point in doing a quadruple toe loop or a triple salchow that ends you on your arse. Nor does it gain you any points to do a back one–and–a–half somersault pike off the platform that leaves you entering the water with a big splash. Being a winner is not just about doing something phenonomial, it’s about doing it and then recovering with grace, style and your spirit intact.
We shouldn’t be putting smiley faces on our report cards for surviving the GFC if we did so by chewing off our right arm. If you have lost key people, lowered prices, or performed services you normally wouldn’t, just to keep the doors open, have you really survived? Being realistic, when one is in the throws of battle the focus tends to be on getting through the day, not what happens next. I understand that everyone needs to do what they can to sustain themselves; never the less, I worry that many organizations today are making choices without the slightest thought of what happens ‘after’. In the long run, not only will that seem like a foolish lack of strategy and a missed opportunity, but also a big step backward.
Smart people and smart companies will not have waited till the green shoots began to appear to ponder the what’s next question, they would have been all over that way before this mess started. Looking back through history you will see the old saying is true, when the going gets tough – the tough get going. Digital computers were born during the Great Depression, the Ethernet during the 1970’s oil crisis, the personal computer in the early 1980s and the World Wide Web in the early 1990’s.
When the tech industry bombed in early 2000 companies like Apple hedged their bets on the internet and radically changing their business model to enter the music industry, which worked out quite well for them!
What are we going to show for our great GFC? Bank regulation, executives getting paid normal people wages, big companies being honest, those are a few of the unexciting but potential positive outcomes. Sadly, we may also see an abandonment of the things we have been slowly gaining ground on over the past years: environmentalism, work life balance, worker empowerment, mentoring, and training. It is astounding how quickly many of our clients have moved these things to the back burner, in some cases decisions that will impact their business for well after the recession ends.
Everyone seems to be making goofy decisions these days and behaving a little off kilter, for some people the past year has been such a battle that they have very little left in their reserves to keep up the fight, let alone make reasonable decisions. Their jobs have been so tough that now they are showing the telltale signs of ‘change fatigue’. That’s a new term you will see creeping into our lexicon, it refers to the added levels of anxiety, stress and depression many people feel, particularly those who work for organizations that have experienced major upheavals such as changes in ownership, mergers or redundancies.
Redundancies really wreak havoc on us both mentally and physically, findings from a 10 year study at University of Puget Sound, and University of Colorado in the US has found that managers that lay off workers have long term health effects: sleep problems, emotional exhaustion, dizziness, and increased headache and heart problems. It also impacts the way we work, I was looking at the results of an office metrics survey of 80,000 workers world wide that found that workers concerned about layoff are getting to the office earlier, Aussies arrive earliest coming to work at 8:14 (7 minutes earlier than in November) Americans arrive at 8:32, Germans 8:35, UK 9:00 and French 9:22.
Longer work hours and more paranoia don’t sound good to me, isn’t it enough to worry about global warming, the Taliban and tenacious cellulite on your butt? That last point is no joke, not only are we working longer hours, but snacking is on the rise too, 43% of workers surveyed in a Career Builder Survey admitted to having gained weight. One of the reasons there is more snacking is there is an increased number of women in the workplace and we gals like the occasional snack at work. This shift to more women has been particularly prevalent in areas where the construction industry is depressed; the wife is back to work and the tradie is at home with the kids, a six pack of beer and a home decorated with Makita posters.
Changes in an organization affect everyone, but to a leader they can be particularly damaging. Not only are they closer to the flame, but we all look to leaders to set the course for our future and when they are paralised, as is the case when one suffers ‘change fatigue’. The psychologist and executive coach Virginia Mansell warns that the extreme pressure executives have been under in these tough times is often not recognized by company boards. She warns that the highly charged emotional state of executives today can be sever enough to prevent even the most competent managers from doing their jobs well.
Everyone intuitively knows that people don’t make good decisions when they are suffering from anxiety or depression. In fact, research shows that when agitated or anxious whole mechanisms in the brain – called calm intuition – that are critical to decision making shut down. In particular two traits, creativity and intuition, essential for decision making in hard times cannot be accessed. When people are anxious they become irrational, they cannot concentrate and they don’t balance out the information they have. This leads to reactive decision making. Without calm intuition, concentration and balance the decisions leaders make are most likely not their best.
On the other hand there are a whole lot of leaders out there who have kept a cool head, prepared their companies for the worse and took appropriate precautions to weather the storm. One who I heard speak at an executive breakfast forum a few weeks back is David Smith the CEO of HBOS Australia. When asked what he had learned from the tough economic times he indicated that the most important thing an executive could do in tough times was to be transparent. He says people can see through the façades, so it is best to be real and communicate honestly and often about the situation.
Smith went on to say that a positive aspect of this recession has been a greater sense of collegiality and teamwork amongst his people which has allowed them to achieve more than they would have had they worked independently. Getting senior people more involved and dealing with the detail, as well as asking for a greater level of accountability from them also contributed to positive outcomes. Smith made an interesting comment, he says Australians are not used to direct feedback and as a result it is more challenging to correct mistakes.
The financial services sector is going to have a tough go over the next decade, still in survival mode they have not even begun to contemplate how they will move forward, let alone think about what happens ‘after’. They are going to have to ask themselves some tough questions about leadership, given it was the leaders in the industry that led them to the mess they’re in.
Our industry will be doing the same. I am not suggesting that anyone in this business has as much to answer for as the bankers; never the less, I worry that our desire to survive has put us in the position of eroding our market in a way that may be irreversible. The aftermath of what we have just been through is not going to be a restoration of the industry as we knew it and we have done little to reposition ourselves for our new future.
It is a shame, because one of the traits that sets us apart from other industries, creativity and innovation, appears to have been absent in the past months. There is nothing creative about retrenchment, travel bans or undercutting the competition. Other than the architect in Seattle I have read about who is doing residential work from a hawkers stall at a local market, I haven’t heard of anyone doing anything really clever. We have not taken the opportunity of this lull to proactively think about what we want our industry to be like after.
The worst things that could happen to us would be to survive the great GFC only to realise we played a contributing role in creating a reality where our services are not valued and there is an expectation to deliver them for prices well below market value. As an industry we are smarter and a heck of a lot more clever than that, the companies that take the time to think about what happens ‘after’, right now, will be the ones to lead the market in the decade to come.
Executive Breakfast Forum – An Interview with Narelle Hooper, editor of AFR BOSS magazine, with David Smith, CEO of HBOS Australia and Virginia Mansell, Managing Director of SMG, August 6, 2009
Becker, Bo, Why Competition May Not Improve Credit Rating Agencies, HBR Working Knowledge, August 31, 2009
Condon, Turi; Construction Job Losses Mount as Funds Dry Up, The Australian, July 16, 2009
Kahler, Alison, High Anxiety , AFR Boss, July 2009
Mansell, Virginia, Staff Under Siege. Business Week, December 15, 2003
Smith, Fiona, Message Wins Workers Hearts, Australian Financial Review, March 3, 2009