The Ripple Effect is Accelerating the Downturn

This is the fifth of a six part series, running this week, on why you can expect that the downturn will be deeper and longer than currently expected by most. Each day, I will post about one of the six reasons why I have come to this conclusion. Here is Reason #5.

I spend much of my working time out in the market(s) assessing developments for my clients. In recent months, I am witnessing that industry after industry is being impacted by the initial problems in the housing industry. Like ripples emanating from a pebble entering the water, or dominoes tumbling the next, industry after industry is being impacted.

The housing problem has devastated the financial industry. The problems of the financial industry has in turn squeezed consumers with the result being retail, tourism, automotive industries, and many others are being adversely impacted. Now, these problems are spreading to a wide variety of manufacturing industries. And now they are spreading to service business where companies in all kinds of industries are demanding significant price concessions from service providers. In the U.S., we now have a multitude of industries in deep pain…many more industries than in recent recessions. Which is why I believe that this downturn will be deeper and longer than currently expected by most.

Up Next: The final of the six reasons for pessimism about the duration and depth of the downturn; The U.S. Recession Shows Signs of Becoming a Truly Global Recession. Follow this series all week as I layout one of the six reasons every day. And, remember that although I believe that these are tough times, I believe that…with the right actions…the agile can prosper. Stay tuned to next week when each daily post will address specific ways businesses can prosper in these tough times.

Problems Causing the Recession Are Complex

This is the fourth of a six part series, running this week, on why you can expect that the downturn will be deeper and longer than currently expected by most. Each day, I will post about one of the six reasons why I have come to this conclusion. Here is Reason #4.

Many prognosticators on the likely depth and duration of the downturn hypothesize that the downturn cannot reach the depths of the Great Depression because of all the tools that the government now has to slow the downturn. Well, as covered in my last post, I am not encouraged by the results of the turnaround efforts to-date.

My pessimism as to the likely depth and duration of the downturn…or should I say my “realism”…is based, in part, on what I believe to be the complexity of this downturn. Let’s take just one problem, of the many problems, as an example: How do we fix the housing problem?

Does the government just indemnify the holders of toxic paper. If so, what about those who have lost money along the line from this toxic paper, i.e, past holders of the toxic paper? Or, is this to be like musical chairs and whomever has the problem when the government finally acts, gets bailed out?

Or, go down a level and focus on the challenges of dealing with the ultimate borrowers. David Leonhardt of the NYTimes wrote a very thoughtful article on the conundrum of dealing with this group in his October 22 piece. His construct for analyzing the problem is to divide those with housing loan (mortgage) problems into two groups: (1) those who may not be able make payments, and (2) those who have the cash flow to make payments but question the sanity of continuing to make payments on a property where the mortgage debt far exceeds the fair market value of the property. Do both deserve to be bailed out? What do we do with those who have recently lost their homes? Do we just say “sorry, you weren’t in the chair when the music stopped.”

After studying just this one problem, i.e., that of the housing market, Leonhardt ends his analysis and article with this sage conclusion:

“But this financial crisis is not going to be solved by a magic bullet. It is going to require a smorgasbord of programs – some aimed at homeowners in trouble, some aimed at the credit market, some aimed at the job market – as well as a whole lot of time and patience.” (emphasis added)

The more the federal government involves themselves in direct bailouts, whether at the company level or the individual level, the more the risk of disparate treatment. Disparate treatment means debate, and lobbying, and other actions that introduce more risk of yet more delay and more unfairness.

And, this is true in many other industries beyond housing. Already there are screams from some financial institutions that the bailout efforts are favoring a chosen few. You have the auto industry clamoring for direct bailout of their industry. Are they really more deserving than say the restaurant industry? Or the appliance industry? Or???

The policy implications of the turnaround moves that need to be expeditiously made are immense. There will be fortunes made and lost based on the decisions made. And, where there is so much at stake, the risk for poor judgment, or even corrupted judgment, increases.

I am not an economist. I am not a social scientist. And, I am certainly not a politician. What I know is turnarounds. And, from my vantage point, this is the most difficult turnaround since the Great Depression. And that leads me to conclude that the downturn will be deep and relatively long in duration. And, I get absolutely no satisfaction in reaching that conclusion.

Up Next: The fifth of the six reasons for pessimism about the duration and depth of the downturn; The Ripple Effect is Acceleration the Downturn. Follow this series all week as I layout one of the six reasons every day. And, remember that although I believe that these are tough times, I believe that…with the right actions…the agile can prosper. Stay tuned to next week when each daily post will address specific ways businesses can prosper in these tough times.

The 2008 Election Break in Recession Turnaround Efforts

This is the third of a six part series, running this week, on why you can expect that the downturn will be deeper and longer than currently expected by most. Each day, I will post about one of the six reasons why I have come to this conclusion. Here is Reason #3.

Turnarounds are all tough stuff. And the turnaround of the U.S. economy, faced by our government, is as large and complex as I have ever seen. By far!

To stop the snowball effect of any distressed situation takes an intense effort by a group experienced and skilled in the nuances of turnarounds. The intensity of the effort needed for success cannot be overstated. Because of the snowball effect, the natural pattern is for more and more things to go wrong.

Well, speaking of going wrong….here we are at full crisis mode and voila we interrupt this for an election. An election that will result in a new President, many changes in Congress, and a whole new administration.

Even if some of the key turnaround players are retained in an unusual bi-partisan collaborative effort, our federal government is, through no one’s fault, about to have a massive change of players.

So here we have a turnaround effort that is already struggling to get traction about to enter into a period of change of hands. Ouch!

The "hands" scheduled to leave Washington in January have to be focused on their own personal situation especially with job prospects so generally poor. The incoming hands will be looking to get situated and can be expected to be cautious about making decisions for which they can later be criticized. That is a lot of focus on other than the economic crisis. More ouch!

Now, there is no one to blame for this situation. It is not anybody’s fault that the economic crisis coincided with a Presidential election. This is just the circumstance. And, a circumstance that must be factored into any assessment as to how deep and how long this downturn will be.

Turnarounds seldom, if ever, happen in a perfect situation. That is, in part, why they are so difficult to effect. That is why the snowball of problems so often continues to pick up speed notwithstanding well intentioned efforts by executives, and restructuring professionals.

And, that is why this long time restructuring professional believes the downturn will, regretfully, be deeper than most currently expect and longer in duration. I wish it were not so…and I truly hope to be wrong. Very wrong.

Up Next: The fourth of the six reasons for pessimism about the duration and depth of the downturn; Problems Causing the Recession Are Complex. Follow this series all week as I layout one of the six reasons every day. And, remember that although I believe that these are tough times, I believe that…with the right actions…the agile can prosper. Stay tuned to next week when each daily post will address specific ways businesses can prosper in these tough times.

Recession Turnaround Efforts Not Yet Getting Real Traction

This is the second of a six part series, running this week, on why you can expect that the downturn will be deeper and longer than currently expected by most. Each day, I will post about one of the six reasons why I have come to this conclusion. Here is Reason #2.

For 20+ years, I was on the front lines of restructuring companies of all sizes, in a plethora of industries. And, for the last 10+ years, I have counseled leaders in the Restructuring industry as they have worked to restructure companies throughout the country. I have seen 100’s of restructurings, up close and as they say “personal” from all different positions. I have been a lender, represented creditors, assisted trustees, and even been the executive in the hot seat making the operating decisions. And, if there is one thing of which I am certain as a result of all this experience with restructurings is that

turnaround’s are very, very difficult!

The problems facing our economy are many, many times more complex than the largest of my restructuring assignments. And, so I have to conclude that this turnaround will be difficult and protracted.

Turnarounds are difficult for many reasons, not the least of which is the snowball effect. Notwithstanding the best of efforts, more often than not the snowball of problems picks up speed before it can be stopped, or even significantly slowed .

I want to believe the Federal Reserve and the Treasury Department are making progress. And, I am sure they are. But from my vantage point…and that certainly isn’t on the very front lines…it sure seems like the snowball is picking up speed.

Turnarounds call for decisive action, and implementing new processes by the government is almost, by definition, likely to be slow. Treasury won congressional approval for the $700 million rescue plan on October 3. But three weeks later, an asset manager has not yet been put in place. Certainly not slow by government standards. But, in the world of turnarounds, this is glacial speed, even as the snowball just keeps rolling faster downhill.

My pessimism about the likely duration and depth of the economic downturn is, in part, based on my conclusion that to date, the turnaround efforts are not yet getting real traction.

That doesn’t mean that those on the front lines are doing a bad job. Or will not eventually get traction. But, after three months of intensive action, it certainly appears that the snowball is still gathering speed.

Now, I have been on the front lines where adrenalin has you hoping and expecting that your actions will soon take hold. Many a turnaround professional has dreamed of the quick turnaround. But, seldom…very seldom…is that what happens. Turnarounds are tough stuff! And, this may well turn out to be one of the toughest of all time!!

Up Next: The third of the six reasons for pessimism about the duration and depth of the downturn; The 2008 Election Break in Recession Turnaround Efforts . Follow this series all week as I layout one of the six reasons every day. And, remember that although I believe that these are tough times, I believe that…with the right actions…the agile can prosper. Stay tuned to next week when each daily post will address specific ways businesses can prosper in these tough times.

The Hole is Much Deeper Than Currently Acknowledged for the 2008-2009 Recession

This is the first of a six part series, running this week, on why you can expect that the downturn will be deeper and longer than currently expected by most. Each day, I will post about one of the six reasons I have come to this conclusion. Here is Reason #1.

Any assessment of how long this downturn will last must begin with a realistic assessment of the starting point. That is, how bad is the current situation?

Most economists believe that downturns are a necessary "evil" for adjusting an economy. For reducing inflation, or for dealing with any other fundamental economic problem. Downturns are like draining the pus from a boil, or…in economic terms…curing the problems coming from a bubble.

So...to begin to understand how long this downturn will last and how deep it will go, one must first understand what is the problem that needs to be worked out and how severe is it.

Many point to housing prices as the bubble and the fundamental that must be worked out. I agree there is, indeed, a housing bubble that needs to be worked out. But, I believe that the Recession of 2008-2009 will go down as a poster child for problems with our credit markets. Those problems are unfolding, and will likely unfold further, in the coming months.

Much has been made, of late, of the problems of U.S. commercial banks and investment banks. But, I believe that the problems run deep throughout the financial services sector. AIG was just the tip of the iceberg of distressed insurance companies. Hedge funds are likely to be the next wave of distressed becoming a front and center problem, and it will not be just a handful. Mutual funds will be next as their values are ravaged by the losses on their investments in the financial services sector. And, the list will go on. And on.

The core problem is toxic paper. Trillions of dollars of it. Paper in the form of obligations, i.e., debts, for which there is no responsible borrower and/or adequate collateral.

Securitization made it possible for an originator to make a loan and to sell it off with little or even no recourse. Quite a change from days long since gone when as a banker I made a loan, I had to collect the loan. My career success depended on being able to collect the loan without any loss of principal. (What a novel concept that is in recent years.)

And, many loans since the advent of securitization were made with questionable borrowers, or on an effective non-recourse or limited recourse basis (as with equity sponsors who did not have to guarantee the debt of their portfolio companies).

The toxic paper problem has been exacerbated by all manner of creative parsing of the risks through many varieties of derivative products, thereby creating more toxic paper and ultimately piling toxic paper on toxic paper.

Now if the toxic paper problem is not enough, the problem has been compounded by the high leverage that has become pervasive in all manner of entities in our economy, from consumers, to businesses to financial institutions. At the 20X leverage that some financial intermediaries have been utilizing, even a 5% decline in collateral value means the equity cushion is effectively wiped out. At 10X leverage, a 10% decline in collateral means the equity cushion is wiped out. And, we all know that collateral value in homes, as well as with many other assets, are off by more than 10%. In many cases, by much, much more than 10%!

Now it is perfectly understandable why regulators are not standing on the mountain top and officially announcing that many of our financial institutions and intermediaries are insolvent using any measure of fair market valuation of assets. That is news that the financial markets do not need to hear from an official source. But, as every day, the regulators report on the need to deal with yet another troubled financial entity, it becomes ever clearer just how many financial institutions are insolvent. And, just how deep the hole is. It is very, very deep.

End of the world deep? Of course not! But quickly fixable? Not likely!

Up Next: The second of the six reasons; Recession Turnaround Efforts Not Yet Getting Real Traction Follow this series all week as I address one of the six reasons every day. And, remember that although I believe that tough times will be with us for quite some time, I also believe that with the right actions the agile can prosper.

Why The 2008 Recession Will Be Deeper and Longer than Currently Expected

My MBA in Finance and years working in, and alongside, the banking industry hardly qualifies me as some economic guru or grand wizard of forecasting. However, my clients expect me to guide them as to business conditions and resulting strategies for attaining and sustaining market leadership. So...every day I am forced to try to make sense of business conditions, in markets across the country.

Now, let me start by saying that I wish I could be an optimist about the overall economy. I would be delighted to be able to join those who make the case for how things will bounce back as soon as a new President is in office. I respect those that want you to believe that much improved policy making will avoid anything like the Great Depression, a view recently widely reported as being espoused by Olivier Blanchard, the respected and very thoughful chief economist of the International Monetary Fund.

Such optimism seems kindly as it has the potential to bolster consumer and executive confidence. But, such optimism really can be quite cruel if people are not adjusting their business and/or personal strategies and tactics to reflect the evidence I see that this is going to be a deeper and longer recession than we all hope it might be.

I don’t know precisely how long the economic downturn will last. But, I do know that people who don’t trim their sails to prosper in a down economy are highly likely to experience a ton of pain.

Seems far better to position oneself to prosper in a tough economy than to keep running one's business and personal affairs as if we were still in the good times.

After all, keep in mind that if you trim your sails for tough times, you can always re-trim when good times eventually come back. And, they will eventually come back. Of that I am sure.

Please, please do not confuse my pessimism about prospects for the overall economy with my staunch belief that companies and people can prosper in tough times. Monetary fortunes have been made in past downturns and will be made in this downturn. And, at least for me, there is more to prosperity than just economic success. There are greater opportunities...than at any time in the last fifty years...for people to make a real difference in the lives of others, by being a beacon of light in these tough times.

Ivan Misner, in his terrific blog – Networking Now, recently captured what I believe to be the essence of the opportunity for those who believe in self-determination.” If you tell yourself, ‘I can’t succeed in this economic downturn,’ you’ll very likely prove yourself correct. But if, instead, you focus on specific solutions to the particular issues, challenges and opportunities of your business, your niche market, your current and prospective customers . . . you are very likely to enjoy more success than all the naysayers put together would have predicted.”

Although I see some people paralyzed by the fear that Misner talks about in his post, I see even more people who are delaying taking prudent steps out of their belief/hope that "this too will soon pass." And, that is why I want to share, over the coming week, six reasons why I believe the 2008 recession will extend well into 2009, and that tough times will last even longer.

My hope is that every reader will, at minimum, accept that some of my reasons have enough merit to suggest that is prudent to adjust strategies and tactics to reflect the likelihood that tough times will be with us for quite awhile. And, to reflect the likelihood that times will get worse before they start to get better.

Up Next: The first of the six reasons; The Hole is Much Deeper Than Currently Acknowledged. Follow this series all week as I lay out one of the six reasons every day.

Outward Bound Lesson for the 2008 Recession

As a six time Outward Bound graduate, I have had some amazing experiences that have shaped my thinking as to what it will take to prosper in these tough times.

I vividly recall the beauty of canoeing on the pristine lakes along the Minnesota/Canada border. And, just as vividly, I recall my whitewater canoeing on a mountain river in North Carolina. Night and day difference!

On the lakes, I was able to comfortably navigate my canoe solo. But, in whitewater, I needed a skilled team member to help navigate our canoe down the river safely. (Yes, we did whitewater canoeing…not kayaking or rafting!)

The last twenty plus years has been a placid lake compared to the whitewater we now all face. In better times, one could be a soloist and do OK, or even better.

In whitewater times, you will want to travel with the right team.

Your survival will depend on the quality of your team.

Are you a soloist? Better mothball that trait for better times.

If you are a team player, are you a good team player? Do you routinely pull your fair share of the load, or do you coast along on the efforts of others hoping no one will notice? And, are you so focused on your own issues that you can't be a strong team player?

In these turbulent times, I want skilled, focused, and supportive mates. Anything less, just will not be allowed in my canoe. After all, like you, I have a family dependent on my safely navigating this whitewater.

Will there be a line of great mates wanting YOU in their canoe?

This is the first in an ongoing series commenting on the lessons I learned from Outward Bound that are applicable to these tough times. Next up, the importance of self-rescue.

Finding a Job During a Recession

Finding a new job after being laid off has never been easy. Employers tend to look at the unemployed with a high degree of skepticism. Fortunately, for many years, re-employment was made much easier by a relatively tight job market. Gone are those days.

Now, I am not an employment counselor or career coach. But, I have a large group of high performers that I mentor and recently more of our discussions have revolved around the issue of job loss and getting redeployed. From those discussions, I want to share ten tips for getting re-employed in the shortest possible time.

1. Get started immediately upon losing your job. This is not a time to take that well deserved two week vacation. Or paint the house. Or… Take a very quick, clear your head break and get on with finding your next position. Please!
2. Work hard at finding your next position. The market is tough and getting tougher by the day. If you are not working harder than you ever have, in trying to get a replacement job, you are not working harder enough. Work hard, and don’t kid yourself as to how hard you are working. Please!
3. Be in the best physical shape of your life. Employers will be looking for employees that they believe have the vitality to help their company survive in these tough times. And, they certainly don’t want to hire someone who is walking medical disaster waiting to happen. Get in great shape. Please!
4. Be in good mental and emotional shape. This may be the toughest of the ten steps. Get the help you need from professionals or community based support groups so you are tuned for success. Please!
5. Become a Career Expert. Read What Color is Your Parachute. Through regular updates, this book is as useful as ever in stretching ones thinking about career options. You must think outside the box as to your job options. Couple that book with one of the current leading books on finding a new job. And read up on things like claiming unemployment, Cobra, downsizing your expenditures, and the like. Become an expert on career transitions. Please!
6. Become a LinkedIn star. White collar workers must quickly get their LinkedIn profile shining. Shining! Employees will want to hire employers that have a public persona of being successful and well connected. Set a goal of having at least five quality recommendations and fifty quality contacts listed within thirty days. Please!
7. Aggressively pursue potential jobs from all angles. Put on your marketing hat. Segment the market (both by types of jobs and by sources) and prioritize and attack. This attack mode will serve you well in your pursuit and keep your business skills sharp. Get on with marketing YOU. Please!
8. Polish your interviewing skills. Opportunities will be scarce. When you find one, you must be ready to score. Have a friend play the employer and tape some practice interviews. Then be real in reviewing the results. Practice, practice, practice. Please!
9. Understand rapidly changing compensation trends. Expect employers to pay far less than they were 3-6 months ago. Expect them to compare you to an entry level person. Understand that compensation is being turned on its head. Comp is not about your needs…it is about the employer’s needs. Think value and be able to clearly articulate the value you can bring to the company. Please!
10. Install an accountability and support structure. These are times when anyone other than the most disciplined will need a mechanism to hold you accountable. Friends or a spouse are often ill equipped to play this role. Get a coach, or join a support group, or form your very own master mind group. Get some accountability and explicitly tell your support that you really, really want them holding you accountable. Please!

Of course, the real answer is to hold on to the job you have. But, if you are among the many, many thousands who will find themselves unemployed, get real…real quickly.

Some of the unemployed will want to consider starting their own business...and for some, but definitely not everyone, that is an option (and a topic of future posts).

One last thing…if you are fortunate enough to still have a job, email this list to a friend(s) that has lost his or her job. They will (hopefully) appreciate your caring. Who knows? The table could well be reversed sometime soon.

Starting Tomorrow: A six part series on why I expect the recession to be deeper and longer than many currently expect...and why I believe that there will be opportunities to prosper nevertheless.

2008 Recession Layoff Notices Are Increasing Dramatically

First, it was the housing industry. Then, the financial services industry. And now, you see the announcements of significant layoffs in industry after industry.

From shop floor workers to the executive suite, companies across the country are taking a sharp and quick knife to their work force. From industry laggards to some of the industry leaders, layoff announcements in increments of many thousands per company have become commonplace. Announced cuts of up to 10% of the workforce have become commonplace. And, companies are doing layoffs even as we start the holiday season, which has traditionally been a time when compassion often overruled business logic.

No longer are economists claiming that a strength in the economic data is the unemployment rate. Many economists expect that we will shortly surpass the 6.3% unemployment rate that was the high in the last downturn. 7-8% unemployment seems highly likely by year end. And the specter of double digit unemployment looms as a very real possibility in the first quarter of next year.

The pain and suffering to families that occurs with these kind of unemployment levels should not be underestimated. Expect the strains to be more than just financial. The mental and emotional consequences of these times will be very real, further straining the resources of our charitable organizations.

Workers losing their jobs need to be at their very best if they are to have any chance of quickly re-joining the ranks of the employed. Tomorrow, I will share five ideas for increasing one’s odds of quickly getting a new job.

Starting Sunday: A six part series on why I expect the recession to be deeper and longer than many currently expect...and why I believe that there will be opportunities to prosper nevertheless.

The Consumer Confidence Problem

Have you noticed how often talking heads and pundits are claiming that the major problem with the economy is one of consumer confidence. Get real!

Today, consumers are being financially whipsawed from all directions. Home equity reduced if not eliminated, stock portfolio’s squished, and 401K and other retirement savings decimated. Credit availability scrunched what with banks reducing credit lines on home equity lines and credit cards. Even for consumers paying their bills timely.

Sure consumer confidence is low…but more importantly, wallets are near empty. Or even empty, on some days.

Now there have been times in our economic history where a consumer confidence problem has been the driving factor to economic malaise (like after 9/11). But, let’s stop trivializing today’s economic problems with talk of a consumer confidence problem. The reality is that there is a consumer reality problem. Today consumers are in the toughest financial spot they have been since the depression some 70+ years ago. Tougher than most have been in their life!

The starting point for addressing any problem is getting real.

The U.S. Government must get real, as must state and local governments. Companies must get real if they want to survive. And, individuals must get real if they want to move beyond survival to a position of prospering in these tough times. Only with a realistic assessment of where we are can we chart a sound plan for a better tomorrow.

So let’s not get sidetracked by talk that all we have is a consumer confidence problem.

Starting Sunday: A six part series on why I expect the recession to be deeper and longer than many currently expect...and why I believe that there will be opportunities to prosper nevertheless.

Playing the Blame Game for the Recession of 2008

With the U.S. Presidential election racing to a finish, there has been a boatload of finger pointing as to which political party was responsible for the mess before us. And, let us not forget the convenient and wide-spread focus in the media on the "greed of Wall Street."

As a society, we like to establish blame for our disappointments.

I believe that

the winners in these tough times will be those who are more focused on charting their own successful course than spending time trying to blame others for their misfortunes.

Are you spending more time blaming others rather than thoughtfully creating and diligently executing your plan for prospering in these tough times?

Understanding what got us in this mess does have utility in terms of keeping us from repeating the situation in the future. But, more immediately important is devising solutions to the incredibly complex series of factors that have the snowball picking up speed.

By carefully assessing the reality of what is transpiring and embracing needed strategic and tactical changes, you can move beyond merely surviving, or even thriving, to a position of prospering.

The Squeeze on Charities in the Recession of 2008

Every day, it becomes more apparent that the full impact of the economic downturn will be deep and far reaching. I fully expect to see governmental and quasi governmental agencies experiencing the same restructuring pressures as businesses and individuals. And, unfortunately, so too will many charities.

Charitable organizations are being hit by a triple whammy. For those with endowments, investment income has been significantly impacted by the market meltdown. Additionally, reports of reduced giving are quickly becoming more prevalent (and are to be expected with so many potential corporate and individual donors having been themselves the victim of the meltdown.). And, this comes at a time that demand for services will be increasing, while governmental support....at the federal, state, and local level… will be reduced as these agencies deal with their own problems.

The squeeze on charities will be severe!

Few charitable organizations will escape these pressures. And, for those charitable organizations that have become reliant on debt, in anticipation of donations or of receipt of pledged amounts, the squeeze could be particularly severe.

Just another example of the ripple effect that was the subject of an earlier post.

All of us need to consider how we can help these organizations. Beyond money, more than ever they will need volunteer labor. And, these organizations will also need talent that can help them restructure, and do so quickly.

These are not an easy time to focus on the needs of charities….but, now more than ever, they need our support.

Tough Times Never Last

The last downturn of proportions equal to what we are currently experiencing in the U.S. was in the early 1980's. At that time, one of the most popular books was this book by Rev. Robert Schuller.

Over 3 million copies of Tough Times Never Last, Tough People Do! were sold. Schuller's wisdom is every bit as applicable 25 years later. In tough times, we need to be at our very best to cope with the challenges we are experiencing.

Are you performing at your very best?

Are you using all of your skills, knowledge and experience as well as possible? Are you learning new skills, gaining new knowledge, and creating new experiences so as to optimize what you currently have?

Or...are you spending your time grousing about the times, your misfortune, etc.

Now, more than ever, is a time to be investing wisely in your personal development!

5 Tips for Saving Your Job in this Recession

Companies are reacting to this downturn very quickly. They have to do so in order to survive. And, one of the things they will be looking at most intently is the size and composition of their workforce. Here are five keys to minimizing the likelihood that you become the latest victim of a workforce adjustment...five keys that could save your job.

1. Leave Your Problems at Home

Employers who are going to survive this economic downturn need employees (and partners) who are able to focus on serving customers and clients with excellence. Every company will be expected to produce more for their customers and clients. No matter how severe your personal problems, you must “leave these at home” and summon all of your focus for the benefit of your employer during work hours.


2. Get with the Program

Companies that will survive must change their way of doing business. They must become much more efficient. The successful will be rolling out new programs to accomplish increased efficiency. Get with the program. Employers will have little patience with employees who are resisting necessary changes.

3. Demonstrate Urgency

Companies that will prosper in these tough times will be those who are agile and speedy. They will make quick adjustments to changes in the economy and the markets they serve. They will look for employees who share their corporate belief that tough times demand speed. They will need their team to consist of employees with a consistent sense of urgency.

4. Treat Customers/Clients Like Gold

Since the last significant downturn in the early 90’s, customer/client service has seemingly become a lost art. To capture more of the business that does exist in any market, companies will have to treat their customers/clients much, much better. When customers/clients are on edge because of their own difficulties, they are just not going to tolerate rude, or even uncaring, service.

5. Create Real Value

Here is the bottom line. Employees must create real value! And significant value at that!! Your job must be one that is truly necessary to the success of your employer and you must be performing job in an exemplary way. You must be making a significant contribution to creating the value that customers/clients of your employer will be expecting.

* * * * *

Don’t fool yourself into thinking your job is not at risk. Many, many thousands of workers are being laid off as a result of company failures, downsizing and the like. Many, many more will be laid off before the economic recovery begins. Whatever your performance has been in the past, it is time to step up your performance. Significantly!

Ripple Effect

We all want the downturn to not last long and not be deep. But...I am a strong believer that we do best in life when we are well informed and in touch with reality (at least as we perceive it).

Regretfully, many signs suggest to me the downturn will be deeper and last longer than expected. One of the reasons I believe this is because of the ripple effect that I am seeing….a ripple effect that appears much more severe than in the downturns that occurred in recent recessions.

The ripple effect in economics is where an event impacting one industry spreads out to other industries, then in turn spreads out to other industries.

The problem in the housing market has spread to the financial industry and now the auto industry, the retail industry and the travel industry. Every day, I am seeing more and more industries impacted as the ripples spread from the original problem. And, equally troubling, the economic woes of the U.S. are now rippling to countries around the globe.

The ripple effect suggests to me that fixing our
economic woes will take longer than we would
all like and the depth of the pain will, regretfully, be greater....especially for those that do not position themselves to prosper in tough times.

Are you positioned to prosper in tough times? Are you making the personal adjustments to ride out the storm? Has your business or employer done likewise? Or, are you spending your time watching the news about what is happening but doing little to position yourself to prosper?

In my next post, I will share five tips for saving your job. Then later this coming week, I will share five tips for saving your business.

How Long Will the 2008 Recession Last?

Perhaps it is because of the nature of my consulting business that I get asked this question so often. Or, maybe it has become a favorite question.

I know what everyone wants to hear, myself included. "Not long!"

But, heck I don't have a crystal ball...they were sold out at the Consultant's Super Store when I visited last week. :)

Even without a crystal ball, I do see signs that we could be in for a protracted downturn...signs I will share with you in my next post.

To me,

the question of how long the recession will last
is far far less important than getting on with
positioning oneself to prosper in tough times.

Do you have a realistic plan in place for prospering in tough times? Are you implementing it aggressively?

Or, are you like I expect most, sitting back waiting for the perfect storm to pass?

Famous Last Words

Have you noticed more discussion among friends about job stability?

Just yesterday, two guys...in front of me at a line at the drugstore...were discussing their prospects of getting laid off. Each told the other that although layoffs were expected that "it won't be me."

I wish I had a dollar for every time I hear someone proclaiming "it won't be me."

Human nature has one thinking this survival thought.

Who gets laid off is often not fair. Often age bias creeps in...or politics...or relationships...or????

Seems smarter to be thinking "it could be me" and planning on making changes to (1) minimize the likelihood, and (2) develop a Plan B if such a layoff does occur.

What the Unemployment Statistics Will Not Show

One of the traditional measures of economic health is the unemployment statistics. And with unemployment statistics rising sharply, clearly the economy is in trouble.

But, I believe the real story lies behind the reported unemployment levels. I am seeing an acceleration of corporations and professional service firms exiting older workers who do not truly distinguish themselves with the value they contribute through their employment. What is shocking is the rate of acceleration of this trend and the reduction in the targeted ages.

In the last significant downturn (in the early 90’s), corporations exited their marginal contributors who were in late 50’s and early 60’s. Given what I believe will be the magnitude and duration of this downturn, I fully expect to see the “targeted” age group drop even more. Anyone who is just filling a job is vulnerable, but anyone over 50 will find themselves in the crosshairs. Saddest of all, the prospects for re-employment at a similar job level will likely be non-existent.

Faced with the prospects of claiming unemployment, or getting a (relatively) menial temporary job, most in this situation will opt for the latter. That is why the unemployment statistics will not tell the entire story. And, that is why road warriors like me will...for example... experience that the person checking us into the hotel is a former white collar worker, previously making a salary many times higher than what he, or she, is making as a clerk.

Because my clients count on me to understand the dynamics of the markets in which they compete, I am quasi-social scientist…forever looking to learn what is happening at every level of the economy. In recent times, I have discovered that the people checking me in at hotels have shifted.

Would you believe that I have been checked-in by a former retail VP, former Big 4 audit partner (that one really hit close to home with my being a former senior partner of one of the major accounting firms), a former long time management consultant, and even, recently, a former lawyer. All of these examples are “employed” but at jobs paying a fraction of what they once earned. And with only a fraction of the vocational satisfaction. OUCH!!!!!!!!!!!!!

I just returned from South Florida, where the economy is in a world of hurt. As I was studying the legal market for a client, it became very apparent that many other law firms in the area are beginning to experience severe pain. I fully expect a blood bath of layoffs from competitors, shortly after the holiday season. That alone is sad news. But what about the lawyer who has de minimis business and is terminated at, say, 52. Where will he or she find a job? Sure they can hang out their shingle as a sole practitioner. But, if they couldn’t generate business with the resources of a prestigious firm, how much business will they generate as a solo. Very, very sobering.

Are you creating real value for your employer? Could a younger person do almost as good a job at a fraction of the cost to the employer? If you are counting on the patina of your years of experience, is your experience really that relevant in a rapidly changing world? Please, please don't fool yourself with your answers to these questions.

Whitewater Times

Yesterday, I spent the day working with lawyers at a prominent law firm that is one of my favorite clients. In every session to update personal marketing plans for these lawyers, I explored how much the lawyer had changed his or her personal strategies and tactics to reflect the changed dynamics of the environment. Sadly...but not totally surprisingly… I found that most had not yet changed their personal plans to reflect changes in the circumstances.

Gone are the times of relative economic stability and prosperity where one could exist on auto-pilot. We are now in whitewater times.

These are times that require new ways of thinking. New strategies. And new tactics.

Even if you think the present conditions will only last for 3-6 months, some adjustments to your actions have to be in order. And, if like me, you believe these conditions will last much longer, then all the more reason to change your actions.

In a rapidly changing world,

our past success can breed our future failure.

When we keep doing what worked successfully under very different circumstances, we are unlikely to enjoy similar success in the changed environment.

This so called "Success Trap" is a potential threat to both businesses and individuals.

Will the Success Trap get you and/or your company? Are you personally on auto-pilot? Or, have you tuned up your strategies and tactics for whitewater times?

Moving Beyond Survival

You can hear it. I believe you can even see it in people’s eyes. And, you can certainly discern it in people’s actions. The economic meltdown is scaring, if not terrifying, many.

As a six time graduate of Outward Bound programs, I learned long ago that the key to survival in any dangerous situation is to remain composed so as to be able to focus on crafting a solution to the problem.

I am convinced that there is hope…and much more…for those who stay composed during these tough times.

There is an old Chinese proverb:

From Crisis, Comes Opportunity

I truly believe that opportunities abound for those who can gather their wits, focus on the changed environment, and collaborate with others to fashion winning strategies and tactics.

Have you tuned-up your personal strategies and tactics for the changed circumstances?

The Snowball Lesson

Today, a client senior executive expressed surprise at the fact that to-date the US government had not yet invested the first dollar in the $700 billion rescue plan. I shared that I wasn’t surprised in the least given the people and processes that need to be put in pace to intelligently administer this program. He lamented that implementation needed to happen at 100 mph less the economy slide further into the doldrums.

In fact, I do expect the economy to slide further into the doldrums because of my 25+ years of observing troubled companies…up close and personal as the saying goes. Initially as head of workouts for a major East Coast bank, then as a financial advisor to distressed companies for almost 20 years, and more recently as a consultant to leading Restructuring professional service firms, I have been involved in the turnaround efforts of many major companies.

If there is one thing I have learned about troubled companies, it is that when the proverbial snowball starts rolling downhill, it gathers momentum and thus speed. The longer recovery efforts are postponed, the longer they take to begin having an impact and the more difficult they are to implement.

The U.S. government is late in addressing the ills of our economy. The snowball has been gathering speed for many, many months. As much as I wish it was not the case, I believe that recovery efforts will take many, many months. And, more likely, it will take some years based on how long comparable situations took to stabilize in Japan and Sweden.

Devising a personal and/or corporate strategy for prosperity must begin with a realistic assessment of the likely environment in which you will operate.

Some Perspective

As we cope with significant declines in home values and stock portfolios, it can be helpful to put financial losses in perspective.

Today, on my flight to South Florida, there was a father returning from the funeral of his son and carrying the boxed US flag honoring yet another serviceman killed in action.

Shortly before landing, the flight attendant made a brief announcement about the father's loss and suggested that we show our appreciation for the servicemen and women serving our country. There was but a sprinkling of applause...which I surmised was a combination of self-consciousness by some and confusion by others as to whether such applause would be interpreted as support for the war in Iraq.

Imagine the pain of losing your son in combat. And imagine the additional pain of watching so many seeing your son's particpation in the war as wrong (as if this soldier had a say in where he served his country).

Sure put some perspective, for me, on this economic crisis confronting us.

Simplify...Simplify...Simplify

Over dinner the other night, a dear friend shared with me how he was putting up what he described as his "toys" for sale. In his case, his toys were two vintage cars and a sailboat. My friend told me that he wanted to simplify his life.

Judging by the increase in the number of yard sales in my neighborhood, I believe the simplification movement will be picking up steam across the country.

Now simplification is not a new concept. Authors like Elaine St. James, Janet Luhrs, Marcia Ramsland, and many others have been extolling the virtues of simplifying to counter the effects of a fast paced, acquisition oriented lifestyle. But, I do believe that the movement will be picking up speed...dramatically!

Unfortunately, I believe the dramatic movement is likely to be a relatively short lived phenomena. Companies spend billions of dollars convincing us that we need ever more baubles. And the advertising works (when consumers have discretionary income)! In fact, the advertising has collectively infused our society that what we have for baubles defines our success. From designer watches and handbags to the big boy (and girl) toys of cars, boats, and planes, advertisers have convinced many of us that we need ever more baubles.

So, unless you believe that advertising will be going away, don’t expect the movement toward simplicity to be a part of a permanent societal change. Short and medium term, count on unprecedented opportunities to buy the toys of the simplifiers at a fraction of what they have been selling for.

Will you be simplifying your life in the coming months? Will this be a passing fad for you or a permanent way of life? If the latter, are you ready to define your life other than by the quantity and size of your baubles?

Put Your Oxygen Mask on First!

On every flight, we are advised to remember to put our own oxygen mask on first, before trying to help our loved ones or others, in the event of an emergency. The logic of this advice is irrefutable. We can't help others if we haven’t first taken care of ourselves.

Taking care of ourselves is not selfish; if by doing so, we then take care of others.

In these turbulent times, your loved ones, friends, co-workers and community will need your help even more. To be able to help them, you must make taking care of yourself...physically and mentally... your highest priority.

To make sure that I am ready to help as many people as I can in these tough times, I recently spent the weekend at Cheryl Richardson’s seminar on the Art of Extreme Self Care. Held at Kripalu, in the beautiful Berkshires, the seminar attracted 200 participants who listened to Cheryl’s wisdom, and experienced Cheryl’s extraordinary laser coaching over three days.

Cheryl’s thesis is that it is not enough to just commit to take care of one’s self. Our goal must be to practice EXTREME self care, especially in turbulent times. In her typical divine fashion, Cheryl’s book on this subject is due on bookshelves shortly…perfect timing for what some are calling the “perfect” storm.

Cheryl’s guidance has long had a great impact on my own development. I strongly recommend that you pre-order this book, read it, and put her guidance to work ASAP. The book will make a wonderful holiday gift for a loved one or dear friend.

Hopefully a Gracious Oasis for YOU!

As the economic woes in the United States deepen and spread around the world, the impact on society grows ever more monumental. Retirement plans are being devastated, savings safety nets ripped to shreds, and personal net worths significantly reduced. Money is not the end-all of our existence here on this planet, but it is -- for most people -- a terribly important factor in so many dimensions of their lives.

What worries me more than all the financial impacts is the concurrent toll on the psyche of people. After a record run of prosperity, our society has grown accustomed to relatively easy times. Such times are quickly fading in the rear view mirror. Every day, I am seeing more and more evidence of extreme stress in colleagues, in clients, in family members, and in friends.

I am deeply concerned that these stress levels will manifest themselves in all kinds of destructive behaviors, from increased use of drugs and alcohol...to increased spousal and parental abuse...yes, even to increased suicides.

It is the personal toll that concerns me much more than even the financial toll.

Having long been one who translate concerns into action, I am launching this blog with the hope that it will come to be a gracious oasis in these troubling times. I will be sharing stories that touch my heart of people who are being more compassionate in these tough times....people who are being more charitable...people who are reaching out to help others in ways that stretch my own thinking.

My posts will not ignore bad news; but I intend to let traditional media cover much of the load of the bad news as they are prone to do. I hope to serve up uplifting stories of humans helping humans, while also adding in my own take on what is going and why. I welcome posts that add to what I am trying to accomplish. And, I make no apology for deleting posts that seem designed to be hurtful to others or merely shamelessly promote a product, service, or other agenda.

One caveat, from the very inception of this blog. I claim no access to a crystal ball, to a magic pill, or to the key box for Nirvana Land. I enjoy a long history of being engaged by premier companies to help position them for changing environments. In essence, I am -- among other things -- a professional observer (and strategist). Never have I been more personally challenged at understanding what is happening and why. But at the same time, never have I been more energized to use my powers of observation to observe, comprehend, and fashion ways for individuals and companies to prosper in these tough times.

I welcome you aboard what I fully expect will be a most interesting journey. Please don’t ride in silence. Share your thoughts as you get a sense of the "rhythm" of this blog. And, if you like the rhythm, feel free to share with a friend who could benefit from what -- I hope -- will be a gracious oasis.