The unemployment rate has dropped to 8.6 percent as of the end of November 2011. That means we’re heading back to normal, right?
Hardly. It will be at least two years – and realistically longer – before we return to the employment levels of 2006 and 2007.
So here’s a scary thought: What if the turbulence that we’ve seen in the past three years is the new normal?
There were 13.9 million people unemployed at the end of October 2011 when the unemployment rate was at 9 percent. Only 120,000 jobs were added in November, so you must look at the significant drop in the unemployment rate through skeptical eyes.
The Rest of the Story
The unemployment rate isn’t the entire story. There are a little less than 9 million people working part-time because they can’t find a full time job and countless more who are underemployed. In addition, the economy needs to add about 100,000 jobs per month just to cover the normal expansion.
Some of the jobs we’ve lost since 2008 will never come back. So we would have to average 250,000 jobs per month for between three and four years to return to the unemployment levels of 2006.
In addition, the debt issues around the world continue to be a drag on the economy. Home construction – the fuel for much of our growth in the past – is near all-time lows. Competition is stronger than ever. Large companies are still innovating to be more productive while sitting on mountains of cash. Small to mid-sized companies are reluctantly adding jobs amidst uncertainty. And, the gridlock in Washington and the upcoming Presidential election represent a number of opportunities for nothing much to happen that will make things better.
Consistent positive movement will be a huge boost to confidence, but let’s be honest – there are a lot of moving parts to returning back to what we think of as “normal.” In fact, the “new abnormal” may be a better term to describe our situation.
So what is the new abnormal?
You are going to see parts of the economy doing very well and other areas sucking wind. There are a few common factors, however:
- • The pace of change is increasing even more than we thought was possible. Everyone is running as hard as they can, and if they aren’t, they are toast.
• The need to add value and provide a compelling reason to choose you is – or should be – front and center for every organization, department, team, and individual.
• Flawless execution is the standard to survive, and every detail has an impact.
• Doing everything right is the best opportunity for ensuring your success, but even that is no guarantee. Sometimes you lose because customers simply prefer another product or service over yours. Need proof? Look no further than the Android based tablet computers and smart phones that are selling poorly against Apple products despite performance that is comparable overall.
What should leaders be doing today?
Here are three things you must do to stand out today and continue to deliver results in the new environment:
1. Focus relentlessly on giving customer what they need and want. That means building partnerships that are so strong that your customer looks for opportunities to sell for you. And, it means knowing those customers need and want tomorrow even before they know it themselves.
2. Engage employees to the point that they become zealots for your cause. A great culture will trump a great strategy every time. You can mandate compliance, but people volunteer their commitment. The best organizations never lost sight of the need for employee engagement during the downturn. The rest sacrificed trust, loyalty, and ultimately, credibility because they forgot that people make their business work.
3. Understand exactly how your business model adds value to the customer while allowing you to be profitable, and then master the implementation of that model. You can’t out-Wal-Mart Wal-Mart. You can’t out-Lexus Lexus. But, you must understand exactly what separates the heroes from the wanna-be’s in the hearts and minds of your customers. And then, you must be relentless in perfecting and executing that model.
This is an exciting time to be in the business of building a team, a department, and an entire organization. It is not for the faint of heart, however.
The legendary brands of the future are being created today by leaders and organizations who relish the opportunity to compete and master life in the new abnormal.