Delivering Results in the New Abnormal

Posted on December 10, 2011 by Randy Pennington

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.

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Leadership and the Occupation

Posted on November 22, 2011 by Randy Pennington

Two months and counting. Truthfully, did you believe that the Occupy movement would have lasted this long?

Protests happen all the time in this country. Travel to Washington, DC on virtually any day and you will see some group making their presence felt and beliefs known. The freedom to assemble and communicate your opinion is a sacred right in our country that was founded on a protest movement.

And yet, we haven’t seen a movement like this since … last year if you understand that the Occupy movement – while different in its goals – was born out of a frustration that shares striking similarities to the Tea Party.

So what can leaders learn from a movement that has captured the news and proven to be more than just a group of people gathering to share their dissatisfaction? Here are four lessons:

1. You can’t trick the world. The initial stories from the Occupy Wall Street protests shared a similar theme of college graduates unable to find desirable jobs or repay their college loans. This is the logical outcome of three groups that tried to trick the world:

1. The parents who poured the message into their children’s heads that being happy and getting everything you want is a fact of life.
2. The educational establishment that sold the idea that a college degree – even one in a field that has no long-term value in a crowded job market – was a guarantee of meaningful employment and worth crippling debt.
3. The students who believed the first two groups and racked up debt to pursue an education that is virtually useless. They are, in my mind, the least to blame because they were sold the illusion that you can trick the world into guaranteeing happiness or economic success.

    The lesson for leaders: Worth in the marketplace is based on value provided. It works that way for individuals, teams, and companies. You can study anything you want. You can produce any product or service you want. The world determines its value based on what’s important to them. Success – economic, relational, and emotional – is earned not guaranteed. It is your job to make sure everyone you influence knows how the world works.

2. Focus matters. The protest movements of the past advocated for a clear goal and presented a course of action to satisfy their grievances. The Occupy movement doesn’t. Focus minimizes both distraction and the influence of fringe elements. It defines the desired state in clear terms that make it easy for others to join the fight. The Occupy movement has held up remarkably well considering that there is no consistent call to action. Imagine its success if it had developed even a minimum amount of focus.

    The lesson for leaders: A successful message about change must answer three questions: (1) Change from what to what? (2) Why is this change important to me? (3) What do you want me to do different? Greater clarity of focus increases the opportunity for success.

3. Fairness and freedom are important. The image of the 1 percent amassing enormous wealth on the backs of the 99 percent who are struggling is a powerful reminder that people run toward opportunity when they believe the game isn’t rigged for the benefit of a few. A sense of fairness and the desire for freedom drove the Arab Spring revolts that toppled dictators. It fueled the overturning of feudal Europe, the American Revolution, and the demand for Civil Rights around the world.

    The lesson for leaders: People act for their reasons not yours. You can’t ignore the innate human desire for freedom to pursue their dreams. And, you can’t violate the fundamental sense of fairness that exists without eventually seeing people rebel. That rebellion can be visible like the protests, or it can be subtle like the malicious obedience you see in organizations when work practices are viewed as oppressive and demeaning.

4. Ideas travel at light speed. The Occupy movement appeared virtually out of nowhere and spread from Wall Street to Oakland with surprising speed. No one drove from town to town or wrote letters circulating their ideas. Messages, pictures, and video were shared digitally in real time.

    The lesson for leaders: Ideas have always changed the world. Technology creates the fuel that transforms their slow organic spread into a wildfire that consumes. You must understand how to use the power of technology to spread and sustain your message. More important, find ways for others to discover, connect with, and advocate for your cause.

Two final thoughts:

1. The most important service any leader can provide is to prepare both the people and the environment for lasting success. We prepare the environment by ensuring freedom of access and, to the greatest extent possible, fairness of the process. We prepare the people by teaching the notions of value given for value provided and personal accountability.
2. It is a mistake to support or dismiss the Occupy movement simply on the basis of your philosophical alignment with its goals. Not all capitalists are bad. And, not every capitalist is good. It is, however, important to celebrate the success of democracy that is on display.

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If Time Were Really Money

Posted on November 8, 2011 by Randy Pennington

Would you pay two hours of your life for a bus ride? Would you choose to sleep late if you had less than one day to live? Would you work harder to deliver results if it added extra time to your life?

The movie “In Time” takes us to a world in the not too distant future where time is the currency. In this futuristic world, everyone stops aging at age 25 and stops living one year after that UNLESS they bank additional time.

Wages are paid in hours and minutes. Gambling debts are paid in time transferred to the winner. The wealthy walk slowly, savor every moment, and hire security to protect themselves. They can live forever without aging. The poor run.

This question ran through my head as I watched the movie: What would I do differently if time was the real money of the day?

Would the twenty minutes watching videos on You Tube be worth twenty minutes of my life? Would I pay one hour for a nice bottle of wine, or would I stick with the Iced Tea for 5 minutes? Would I ensure that my work added so much value that I received a bonus in time, or would I do just the minimum?

These are more than interesting dinner party questions for people with too much time on their hands. They cut to the core of what is important in your life. Would you give someone a half-hour so that they could eat a meal if you knew that it could mean your death? Would you hoard your time, or would you give it away?

Would you steal time from another if it meant living for another day? Would you work harder or show a greater sense of urgency in your work if it earned you more time?

The way we invest and spend our time says a lot about our commitment to achieving the results we say that we want. “To Do” lists declare our intentions. “It’s Done” lists demonstrate our commitment to achieving results.

The English writer Charles Caleb Colton, said, “Much may be done in those little shreds and patches of time which every day produces, and which most men throw away.”

The proverb says that Time is money. What would you do differently if that was true in the most literal of terms?

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The Only Culture That Matters

Posted on October 31, 2011 by Randy Pennington

Have you noticed it, too? “Culture” is becoming the catch word for virtually every new business book, training program, or speech.

There are people out there who want to help you develop a culture of accountability, service, innovation, celebration, learning, listening, sustainability, trust, recognition, teamwork, engagement, and change.

The only culture that matters is the one that helps you and your organization achieve your desired results.

There’s nothing wrong and potentially a lot of good that can come from each of the “cultures” being marketed to you. But at the end of the day, we all live and die by our results.

Need an example? Look no further than the slew of dot com companies that imploded with the collapse of the industry. Many were heralded for a culture that promoted employee engagement, fun, and innovation. Remember the Foosball tables in the break room, after-hours beer busts, and relaxed dress codes? These were critical components of a culture that attracted and retained top talent.

Here’s the lesson: fun without results is a party not a company. The same can be said for any type of culture that sounds great on the surface but is not directly tied to delivering results.

Why Culture is Hot

I read my first book on corporate culture in 1982 and was immediately hooked on the subject. It was called Corporate Cultures, and it mirrored the work that I and the other leaders were doing at the start-up mental health facility we had opened in Waco, Texas.

Corporate culture, for the most part, was ignored for many years as the leading and wanna-be gurus migrated to quality, customer service, and change. It is making a resurgence today for one simple reason: culture prevails in the face of changed strategies, new programs, and well-intentioned initiatives.

Culture is a hot topic today for the same reasons Deal and Kennedy believed it was important in 1982:

“American business needs to return to the original concepts and ideas that made institutions like NCR, General Electric, International Business Machines (IBM), Procter & Gamble, 3M, and others great. We need to remember that people make businesses work. And, we need to relearn old lessons about how culture ties people together and gives meaning and purpose to their day-to-day lives.”

A strong, unified culture that guides and defines how things are done is, and has always been, at the core of every successful business. People are re-discovering the truth that good ideas are useless unless implemented, and they are not consistently implemented in organizations unless they are integrated into the culture.

Buyer Beware

Buzzwords and program-of-the-month topics appear every few years. They show up in book titles, training programs, and speeches at corporate and association meetings. Quality was hot in the 1980’s. That gave way to customer service, change, innovation, and lately, social media.

The topics never really go away. They simply recede off of the front pages and return to being need driven rather than fad driven.

There are a few gurus who make their names based on a best-selling book, and there are scores of second and third tier speakers, trainers, and consultants who migrate from topic to topic to keep their calendars filled.

The impact of this process is largely benign. Even those who are migrating from topic to topic generally base their programs on solid (or at least adequate) research. It is different when you are dealing with culture

The dictionary defines “culture” as the integrated patterns of thought, speech, and action. You can’t change a culture with a training program, book, or speech. It is a two to three year effort, at best, and it requires a depth of knowledge and experience that goes beyond a single activity or event.

Add in that the only culture that matters is the one that helps you deliver results, and culture change becomes a very personalized process.

Here are the three questions you should ask before you buy a culture of anything or engage someone to help you transform your culture:
1. What is the competitive advantage you must integrate into your culture to compete in your market? Wal-Mart’s culture supports its competitive strategy to be the low-cost provider. Zappo’s culture supports it competitive strategy of amazing service. Southwest Airlines’ culture supports its competitive strategy of providing great service in a fun, low-cost environment. Your culture must reflect the business strategy that will help you deliver results that allow you to stand out.

2. What is the people philosophy that must be integrated into the culture to help you attract, retain, grow, and engage the staff you need to implement your competitive business strategy? The fun flight attendants on Southwest Airlines are not an accident. They nurture, grow, and sustain the environment that allows that to happen on purpose. The same applies to Wal-Mart, Zappo’s, The Container Store, or any other business that grabs and holds top talent.

3. Does the resource you select to help you develop your culture have the depth to understand your results and help you implement a plan to transform the culture? Or, are they simply selling you a book, training program, or speech? There is nothing wrong with selling books, training programs, and speeches. But, your culture defines your destiny. You can’t trust that outcome to someone who doesn’t understand your goals; the results you need; and the significance of their actions on your long-term success.

The only culture that matters is the one that helps you deliver results. Please be intentional in your efforts to build and sustain it.

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Three Questions Determine Your Value

Posted on October 22, 2011 by Randy Pennington

“But, there are a lot of things that we are good at!”

The frustration filled the manager’s voice as he reviewed the less-than-positive results from a survey of his group’s internal customers. The feedback stung. He might as well have been told by a complete stranger that his baby is ugly. And trust me on this one, no one likes to be told that their baby is anything other than adorable.

The reality of today’s market-driven world is brutal. We are all better at some things than others. Most of us are actually excellent – or at least better than average – at some aspects of our business or personal performance. And, that doesn’t matter unless what we do well adds value to the customer.

The first two questions must be answered for every individual, team, and company to stay relevant in today’s world:
• Are you good at the things your customer values?
• Does your customer value the things at which you are good?

Your answers will determine your market share and profitability as a business. There is a reason why the Apple iPad is flying off the shelf while other tablet devices are hoping that someone will bump into them and knock them into a shopping cart.

Your department’s or team’s answers to these two questions will have an enormous impact on whether your employer retains your function or outsources you as a commodity.

Your personal answers to these two questions determine the size of your paycheck, the amount of your raise, and whether your employer fights to keep you from leaving for a better opportunity. There is a reason why the stars on any professional athletic team make more money than the journeyman. We are compensated based on our perceived value.

You don’t have to be totally amazing in every sense of the word. You must simply be better than those with whom you compete at the things that matter to your customers. Erasmus (of Rotterdam) said it well way back in the 1500’s: “In the land of the blind, the one-eyed man is king.”

The Real Question

The third – and most important – question is, “What will you do differently as the result of your answers to questions one and two?”

Every company, team, and individual should ask and honestly answer the two questions about their value to the customer on a regular basis. This is a once per year activity at a minimum. You should do it more often if you compete in a volatile market. The most successful leaders are continually on the lookout to ensure that they are good at the things their customers value.

Unfortunately, most people and organizations won’t do much, if anything, differently based on their actual value to customers. They might ask the questions once. A few will bring it up as an agenda item in a team meeting or strategic planning session. But, most of us won’t answer the question much less do anything different.

We all tend to be guilty of 3-D Vision – Denial, Distortion, and Delusion. We deny the facts, distort reality, and delude ourselves into thinking that our challenges and circumstance are out of our own control.

3-D Vision will make you, your team, and your business irrelevant. And, there is nothing more tragic than individuals, teams, and companies who are good at some things becoming irrelevant because they didn’t have the courage to look at and improve their value in the marketplace.

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It’s the Culture, Stupid!

Posted on October 11, 2011 by Randy Pennington

The difference between you and the direct competitor that is beating you in the marketplace probably isn’t products, services, or price. They don’t hire all geniuses and leave you with the dunces. Their computer systems, compensation, and operational processes are not dramatically better than yours. When they discuss strategy, the words on their flip charts are not significantly more insightful than yours.

The difference is an intangible. It is a culture where every person at every level is focused on and committed to delivering results that are critical for success.

What the Best Do Differently
The dictionary defines “culture” as, “the patterns of behavior and thinking that people living in social groups learn, create, and share.”

In short, culture is the habits your organization displays over time. Habits are built by repeated action. And, actions are driven by the choices you make every day in every area of your business.

The best make different choices, and as a result, they don’t just compete – they dominate their markets. Here are six choices that will enable you to develop a culture that shouts Results Rule!

    • Tell yourself the truth and value candor and honesty. Despite our belief that we embrace the cold, hard truth, most of us are guilty of 3D Vision: Denial, Distortion, and Delusion. We deny reality; distort our performance; and delude ourselves into blaming our lousy results on things beyond our control. The cure for 3-D Vision is the continuous search for and acknowledgement of the truth. You don’t have to be brutal. You do have to be relentless and unwavering.
    • Pursue the best over the easiest in every situation. This one choice changes every decision you make and action you take – strategy, resource allocation, operational goals, product and service delivery, hiring, information systems, education and training. It sounds easy, but most of us do what is easy rather than what is best.
    • Leverage the power of partnerships both internally and externally. Do your customers love you so much they sell for you? Do your employees volunteer their commitment to go beyond the minimum in product quality or service? If you answered no to either question, you are not leveraging the power of partnerships.
    • Focus the energy to make the main things the main thing. Processes, metrics, rewards, and performance expectations – these are all tools most organizations use to focus the energy. The challenges is not knowing how to focus but rather knowing on what to focus and maintaining the discipline to stay at it. In today’s world, fundamentals are the minimum. Being distinctive is the difference … if it adds value.
    • Learn, grow, and improve every day. The difference between consistent excellence and random brilliance is the ability to learn, grow, and adapt. Past success proves you were right once. Companies that consistently deliver amazing results know that they are only as good as tomorrow’s performance.
    • Show the courage of accountability. There is a line from the often-quoted “Unknown” that applies here, “If you really want to do something, you will find a way; if you don’t, you’ll find an excuse.” Imagine the improvements that would occur in your business if everyone simply accepted accountability for delivering the results that everyone knows are important.

Culture follows performance and behavior, not the other way around. The difference between you and the competitor who is beating you is the discipline to make these choices more often and effectively.

This is not a twelve-step program or a one-year performance objective. Developing and sustaining the culture is an every-day job that lasts for the rest of your life as a leader.

So what are you waiting for? It’s the culture, stupid.

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Heeding Wisdom – A Guest Blog from Mark Sanborn

Posted on October 5, 2011 by Randy Pennington

A Note from Randy Pennington
Remember the definition of insanity: Doing what you have always done and expecting to get different results?

That truth has never been more relevant than today, and yet we are all guilty of failing to heed a piece of wisdom that would help us deliver amazing results.

Mark Sanborn has written an excellent new book titled Up, Down, or Sideways. In it, he devotes a chapter to what prevents us from doing what needs to be done to achieve results. I asked him to share his key observations in this this blog.
-Randy

Heeding Wisdom

If you have children over the age of, oh, a few months, you’ve no doubt experienced what it’s like to see good advice go unheeded. This happens particularly often as children grow into that stage when they know far more than their parents, which usually coincides with the teen years.

Unfortunately, this affliction isn’t confined to teenagers. We all experience those times when we fail to take good advice — even at times when we know we should. Welcome to the human species, where pride goes before the fall and stubbornness is the bricks in the road to tribulation.

When I was researching and writing Up, Down, or Sideways, I realized that many of the things we should do regardless of circumstances are pretty basic and rooted in common sense. Yet, we don’t do them consistently.
Why?
The answer lies in understanding the seven basic stages that most of us go through when it comes to wisdom. Most of these stages represent barriers to living out that wisdom. They are …

    1. We don’t know (e.g., we’re ignorant).
    2. We know but don’t believe (e.g., we don’t think a particular truth applies to us or our situation).
    3. We know and believe but still don’t do it (e.g., we lack conviction because it’s difficult, inconvenient, or unnecessary).
    4. We know and believe but we can’t do it (e.g., we lack the skills to do it).
    5. We know and do inconsistently (e.g., we get lazy or forgetful or distracted).
    6. We know and do consistently (e.g., we’ve formed a good habit that we consciously cultivate).
    7. We know and make it second nature (e.g., it’s become part of who we are).

What are your barriers to applying good advice? Identify them. Bash them. Then make good habits of wisdom that comes your way.

This blog is based on content from Mark Sanborn’s latest book, Up, Down, Or Sideways. It is available wherever you buy great books. Click here to learn more about the book or click here to order it from Amazon.com.

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Want Growth? Part IV: Try Some Confidence

Posted on September 30, 2011 by Randy Pennington

The numbers are in, and people lack confidence. Not all people, but enough of them to slow consumer spending and business investment.

Lack of confidence changes behavior. Confident consumers spend more money because they believe the future will be positive. Confident sales people make more sales because they trust their ability and the value of their product. Confident companies invest in innovation, talent development, and new equipment because they believe that they will be rewarded for their investment.

What does a lack of confidence look like? Just look around.

Hiring is non-existent. Spending is anemic. Words like malaise and funk are used to describe the mood of individuals, companies, and the country. Consumer confidence statistics support the reality that we have lost our swagger.

Who’s Responsible for Confidence?

Building and sustaining confidence is a function of leadership – personal, organizational, and institutional.

It doesn’t matter if you are leading a country, a company, a team, a family, or just yourself. There are things you can do to build your personal confidence and that of those you lead. Here are five ideas for generating the confidence you need to grow and achieve results:

    1. Look the part. My college tennis coach drilled a saying into us every day: “If you look sharp, you feel sharp. If you feel sharp, you play sharp. And if you play sharp, you are sharp.” If you lead an organization, don’t allow the facilities to go unattended. If you lead a team, maintain the look and feel of success in your meetings. If you are an individual, don’t spend every day in your bathrobe and PJ’s. Put yourself in the best position to perform your best.
    2. Change your language. Words matter and self-talk changes the way you perform. I get it if you aren’t comfortable with a daily mantra. At least focus on the desired positive outcome rather than the potential risk of failure. Performance moves toward the mind’s most dominant thought so put yourself in the best position for success.

    3. Set specific goals; create plans to achieve them; and measure success. Bold, specific goals that generate enthusiasm have a profound ability to inspire confidence and action. President John F. Kennedy galvanized the United States with his statement that “this nation should commit itself to achieving the goal, before this decade is out, of landing a man on the moon and returning him safely to the Earth.” Compare that to the general goal of creating more jobs or generating more sales. Specificity breeds focus, and focus creates the opportunity for confidence.

    4. Constantly upgrade your knowledge and skills. Imagine waking up tomorrow knowing that there was no need for your job. How would that make you feel? Now imagine an entire company realizing that its product or service is irrelevant. Multiply that by an entire industry. Finally, multiply that by ten percent of the entire country. That is what is happening in the United States today. The failure to invest in continuous education sets us on a path toward a perpetual lack of confidence fed by the despair of irrelevance.

    5. Celebrate successes – both large and small. At its core, confidence is the trust in one’s ability to be in control of their destiny. We should celebrate and learn from our successes – regardless of their size – just as we should acknowledge and learn from our shortcomings. A total focus on the negative creates feelings of helplessness. Celebrating success inspires confidence in the potential for the future.

A “Morning Again” Moment

President Ronald Reagan’s 1984 “Morning in America” campaign commercial marked a re-birth of confidence in a country that had suffered for too long under the malaise of mediocrity. It changed the language. It celebrated our successes, and it reinforced that the United States still knew how to succeed.

It is time for that message again in our country, our companies, and our individual lives. We can’t stop with a commercial, however. We have to support the vision with specific goals and measures. We must prepare for it with new knowledge and skills, and we must celebrate successes rather than failure.

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Want Growth? Part III: Raise the Talent Level

Posted on September 22, 2011 by Randy Pennington

Your value in the marketplace is in direct proportion to the importance and complexity of the problems you can solve and solutions you can provide to your customers. Put another way, you can’t earn a brain surgeon’s salary with a talent level that qualifies you to be a convenience store clerk.

This principle applies to organizations and economies, too.

Apple reported second quarter revenue exploded by 83 percent in 2011. Some analysts believe that its revenue could grow by 50 percent per year through 2012. Apple isn’t the only player in the markets that it serves. It is simply the best at providing a solution that customers want and are willing to pay a premium to buy.

The U.S. economy, unfortunately, isn’t Apple. We don’t provide, as a national economy, products and services that solve problems or provide solutions that people are willing to pay the prices we need to support the wages we want.

Yes, there are exceptions in highly specialized fields. But looking at the big picture, the global marketplace is dictating the price it is willing to pay for the talent we provide.

It pains me to say this, but there is no reason to pay more for the goods and services produced in this country compared to similar goods and services produced in other countries that pay their workers less money.

Our economy, in the macro sense, is being paid for the value we provide, and it just isn’t that much. As a result, wages are stagnant. When wages are stagnant, growth is stagnant. Here are three reasons why:

    1. The rise of technology. The steam engine enabled the industrial revolution by overcoming the limitations of people and horses in the production of goods. It allowed organizations to be more productive, and it made certain jobs obsolete. The transformational impact of technology on productivity and jobs is a fact of life. While it enables new jobs, it decimates others.
    2. The rise of globalization. There are two types of jobs: those that must be done locally and those that can be done anywhere. Jobs that must be done locally – like healthcare, fast food, education, and public safety – have grown in the United States. Jobs that can be done anywhere have, for the most part, left the United States or suffered wage stagnation because we are competing against an international pool of workers who can produce the same product at a lower wage. The result is a downward pressure on wages from increased competition both globally and locally.
    3. The decline of talent (knowledge and skills) that allow us to differentiate ourselves. The Organization for Economic Cooperation & Development ranks students worldwide in the critical skills of math, science, and reading. In 2010, the U.S. ranked twenty-fifth in math, seventeenth in science, and fourteenth in reading. China ranked number one in all three categories. Hong Kong ranked second in reading and science and third in math. In South Korea, ninety-three percent of high school students graduate on time. In the United States, the number is seventy-five percent.

What We Can Control

Technology will continue to advance. Globalization is not going away. The only factor we – both individually and collectively – can control is our talent.

The easy answer is to throw more money at the public education system. As in most cases, easy isn’t the same as best. According to the National Center for Education Statistics, expenditures per student grew by 32 percent from 1994 to 2008. The problem with public education will not be solved by the traditional solution of throwing more money at the challenge

There are those who blame the teachers. There are bad teachers in every district, but they are in the minority. My experience is that the vast majority of teachers want to do a great job. They need the time, tools, and support from parents and administrators to do so.

There are those who blame the teacher unions. Every organization, public and private, gets the relationship with their workers and unions that they deserve. Wages, benefits, and working conditions are negotiated. There are unions that create barriers. On the other hand, why is no one asking who created the environment where educators feel so undervalued that must engage in adversary behavior to the detriment of student education?

The public education system is only as effective as the expectations of local communities and the quality of the leaders they put in place to guide their districts. The local school board sets the policy; hires the superintendent; and determines how money will be spent. We have to demand better performance from them.

Let’s Get Personal

Transforming the public education system is a long-term solution. That doesn’t help someone who needs or wants to earn more today.

Blaming technology and globalization won’t change anything. Passing protectionist laws might have a limited impact in specific situations, but that will not have a significant impact.

The only thing you can control is the value you bring to the marketplace. You must continually grow your knowledge and skills. Your personal economy will grow when the importance and complexity of the problems you can solve and solutions you can provide increase.

Next week will complete this series on growth with a look at the importance of confidence and swagger.

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Want Growth? Part II: Show Me the Incentive

Posted on September 13, 2011 by Randy Pennington

“People do things for their own reasons, not for our reasons.” – William Marston

My seat mate on a recent flight owns a successful small business. It is growing in a down economy because he has a product that saves his customers significant money and increases employee productivity. He tells me that his business has the potential to triple in revenues in the next three to five years.

“So does the proposed reduction in employment taxes encourage you to hire new staff,” I asked.

“I need to hire more staff regardless of the reduction in employment taxes,” he said. His biggest question was why should he bother to grow the business if the potential to lose half of the extra money he makes in taxes.

My seat mate’s incentive to grow is the money he’ll make if and when he sells it. That, however, requires him to do something rare – put off short-term pleasure for long-term gain.

Last week’s blog explored how mistrust affects our ability to grow. This week, we’ll ask an important question: Why bother?

The answer to this question affects businesses, sources of capital, individuals, and of course, governments. Consider this:

• The U.S. Labor Department reported 3.2 million job openings in July 2011. That is a long way from putting 15 million people back to work, but it is a start. Some of these vacancies were probably unfilled due to lack of available talent (we’ll address that in the future), but many were going vacant because people found no incentive to take them.
• As of August 2011, companies listed on the S&P 500 had $837 billion in available cash on hand. Lack of trust in future conditions has some impact, but so does the lack of incentive to take a risk and invest those funds in people, equipment, or other vehicle to promote growth.
• Banks, according to reports from the Federal Deposit Insurance Corporation (FDIC), have reduced lending every quarter except one since June 2008. Banks have every incentive to lend money since that is how the earn money. Unfortunately, the incentive to hold on to their assets is much stronger thanks to increased regulatory pressure and toxic assets.

How about you? What is your incentive to make the changes or invest the effort necessary to grow? People and organizations, at least the vast majority of them, change for one of two reasons: Crisis pushes them to change or opportunity pulls them to change.

Crisis works in the short term. The problem is sustaining momentum after the crisis has been averted. Opportunity is a much more sustainable option if you can personalize it to the individual situation. Here’s the message for leaders:

Every business needs growth to survive. Perpetual cost cutting to maintain profits at the exclusion of growth is a guaranteed path to obscurity or worse. What are you doing to kill the incentive to grow? One place to start looking is the practicing of capping commissions. And, what are you doing to incent sustainable growth?

Every individual must grow – at least some – to maintain relevance in their current job. And if you really want to increase your value in the marketplace, there is no better way than to grow your knowledge and skills. We are all paid based on the size, complexity, and value of the problems we solve. Staying the same and refusing to grow is an invitation to be replaced.

Every government must create incentives and remove barriers for businesses and individuals to grow if it wants to sustain and improve services. Regulation is sometimes necessary to protect the public’s interest, and it creates friction in the marketplace through increased costs. Every policy and regulation must be evaluated on one simple criterion: How can we protect the public interest while encouraging growth?

Does Incentive Really Spur Growth?

My uncle was a minister in a relatively small church in a small town. He was provided a house, utilities, and basic expenses necessary to do his job during his decades of service. His remaining compensation came from the contributions that filled the offering plate during each service.

I once asked him why he didn’t take a salary. The members of his church loved him, and I was sure that they would reward him for his years of service with a stable income.

His response was, “I learned a long time ago that a hungry dog hunts better.”

The same principle applies to you and your organization. My uncle could grow his revenue by being so good at what he did that his members were willing to pay him more or that he attracted new members. Substitute customers for members and you have your situation. You can also insert your definition of growth if it involves something other than revenue.

So are you hungry? If you are you’ll seize the opportunity and take the actions to grow.

If you, your organization, or even your community has lost the hunger to grow, what will it take to restore it?
What do you, as a leader, need to stop doing that is killing the incentive to grow? What is the crisis that is so devastating that you are pushed to grow and avoid it? And most important, what is the opportunity that is so compelling that you can’t wait to capture it? Answer these questions, and you will create the energy and focus to mobilize action.

Tune in next week for part three of this series on growth. We take on the topic of talent.

Posted in Accountability, Business Growth, Business Strategy, Communication, Corporate Culture, Decision Making, Execution, Growing your business, Innovation, Leader, Leadership, Leadership Development, Performance Improvement, Personal Development, Randy Pennington, Results, Stupid Decisions, Trust | Tagged , , , , , , , , , , , , , , , , , , , | Comments Off