Tag Archives: leadership development

Dear Occupy Wall Street Protesters: When Did I Become the Bad Guy?

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It seems that as a pro-capitalism, successful business leader that I am somehow partially to blame for what ails the protesters who’ve joined the Occupy Wall Street (OWS) movement. I am the enemy. I am the bad guy.

While I’ve tried desperately to comprehend both their demands and their end game, I have to admit that I am at a loss. One day someone who seems to be an OWS muckety muck (they don’t have any true leaders as of this writing) is claiming that all of capitalism must go; though the next day the protesters are joined by union leaders (whose members are employed by companies that benefit from capitalism) and the message is that corporate greed must go. (Is there anything more amorphous than “corporate greed?”)

It would be nice, actually, if they only had these two viewpoints; but the truth is that for every smelly twenty-something you see holding a sign (or an iPhone), there is a different take on what it is they are trying to “solve” with these protests.

I put the word solve in quotes because I’m not sure they want to solve anything. They really just seem mad that they don’t have all the same luxuries as the successful people in our society (the bad guys). Most of them just seem to want those of us who’ve worked for what we have to give it all back to “society” so that we can all be equally miserable doing without.

When Did I Become the Bad Guy?

By most protesters’ definition, I am a bad guy. I have my own business and I make a good living. My children have cool gadgets and we live in a nice house; in a nice neighborhood. I am really very satisfied with my life. A life, I might add, that did not happen by accident. So I need to know: When did I become the bad guy?

As an eight-year-old in 1971, I began selling candy door-to-door in Glendale, Arizona. I’m not sure how much I made, but it was probably somewhere around $10 per week. (We were poor when I was growing up, so if I wanted to buy anything, I had to earn the money to buy it.)

Is this when I became the bad guy?

From around 1973 through 1977, I ran paper routes (sometimes one route in the morning and one in the afternoon) and sold magazines, newspaper subscriptions and seeds door-to-door. I used my money to buy sports cards, comic books, bicycle parts and candy.

Is this when I became the bad guy?

Throughout my high school years (77-81), I worked at fast food joints, a minor league ballpark and an amusement park. (I doubt there was ever 20 consecutive days that I was out of a job.) I used the money I earned in high school to buy a motorcycle, then a car, fill those with gas, buy beer (yes, illegally) and eat at Jack-in-the-Box or McDonald’s on occasion.

Is this when I became the bad guy?

From 1981 until 1985, I served in the US Marine Corps; mostly on the island of Guam. I was a Russian Linguist in the Corps and I worked what some civilians would think was not only a weird schedule, but probably inhumane. It was called a “2-2-2 and 80.” With this schedule, you worked two day shifts (8AM-4PM); two mid shifts (12AM-8AM); and two eve shifts (4PM-12AM); then you had 80 consecutive hours off. You only had eight hours between your second day shift and your first mid shift; likewise after your second mid shift. I used the money the Marines paid me to buy beer, a computer, stereo equipment, a car and some pretty cool Christmas presents for my family every year.

Is this when I became the bad guy?

After the Marine Corps, I enrolled at Arizona State University where I took a full class load while I worked fulltime to pay my bills. (During my time at ASU – among other equally glamorous jobs – I drove a taxi, worked as a security guard and even sold manure.) As my money got tighter, I took fewer classes and worked more jobs. I studied business, though because I eventually ran out of room on my credit cards, I left ASU deeply in debt and a few credits short of a bachelor’s degree. Ready to just join the workforce and not worry about college, I accepted a job as the manager of an aircraft parts warehouse and worked very hard to do my part to help this Mom & Pop operation become successful.

Is this when I became the bad guy?

A couple of years later, in 1991, my soon-to-be wife and I moved to Chicago so that I could begin work for a beer distributorship as a salesman. Once I arrived, I made sure that I always worked harder and smarter than any of my coworkers. As a result, I was promoted to a territory sales manager position and given a nice raise.

Is this when I became the bad guy?

After I got married in 1993, I decided to go back to school and finish my degree at Governor’s State University. I endeavored to finish my education by working during the day and going to school at night (and on some Saturdays). About a month before my first son was born in July 1994, I finally earned my bachelor’s degree.

Is this when I became the bad guy?

By the time I left this beer distributorship in mid-1997, I had worked my way up to Vice President of Sales earning $73,103 in 1996 (when you included all my bonuses). Even though I now had two sons at home, I was working more than sixty hours each week to better myself.

Is this when I became the bad guy?

From mid-97 until mid-2001, I owned a tiny minority stake in an equally tiny beer distributorship in Missouri. As the managing partner of this wholesale operation, I often arrived at work before 5 AM to load the beer trucks. Once I finished my morning paperwork, I would go out into the field to meet with retailers and convince them to carry my product (which was not easy since the previous distributor had gone bankrupt and left the market without my brands for more than eight months). I was a business owner in name only (because the banks really owned the business) and some nights I worked past midnight. Over the four years that I ran the operation, we were able to dramatically grow our sales (easy to do when you start at the bottom) because of hard work and a lot of perspiration. We sold the brands we distributed in May 2001 to a couple of competing wholesalers, and I reentered the corporate world.

Is this when I became the bad guy?

From 2001 through 2009 I moved my way up through various companies by always outworking my counterparts. I not only worked harder, but I also studied (as I had been doing since 1991) all the industry information and business success literature I could get my hands on. I was a voracious reader of the likes of Tom Peters and Stephen Covey. I am convinced that my success over that period was due to the hours I dedicated towards working hard and studying equally hard. In 2009 I reported to the CEO of a Fortune 500 company.

Is this when I became the bad guy?

In 2009 – during the worst recession of my lifetime – I left the safety of the corporate world and started my own business: part consulting and part developing products to make others more successful. Over the last two years I’ve routinely worked more than twelve hours a day, including most weekends; and my travel schedule, while not as grueling today as it was in 2009, still earns me 1st Class upgrades on nearly every flight. I feel like I’m finally bringing in enough money to help my sons (I have three of them now) get a better head start than I got; to help them to not run out of money while going to college; and to help them choose a career that’s fun for them, rather than taking the route I took and always having to work to pay the bills. My business is doing so well that I expect to start hiring fulltime workers in 2012 (provided the economic and tax situations make that a feasible decision). I have no debt (other than a house I’ve been trying to sell in Atlanta) and we’re putting away a good amount for our retirement.

If I hadn’t become the bad guy before now, then clearly it was my decision to chase the American Dream (and my ability to catch it) that made me the bad guy to the Wall Street protesters. Just so I can get this straight: It’s okay to chase the American Dream, but if you happen to catch it, be prepared to be asked to give it all back to those who weren’t willing to sacrifice as much as you were…

…

I wish I had some great wisdom to bestow on those protesters who think I’m the bad guy. I wish there were words to ease the minds of those who are (in effect) protesting the fact that my “greed” will someday create jobs for them – jobs that will allow them to chase the American Dream if they so desire.

Unfortunately for the protestors, the words they need to hear will not ease their minds. They should have heard these words years ago from parents who should have taught them about hard work and dedication to a job well done.

The words I have for the Occupy Wall Street crowd is simply this: Stop bellyaching; retract your outstretched paw looking for a handout; go home and shower; and (as I did my entire life) seek out any job you can get. Once you’re in that job, work harder and smarter than everyone else and good things should happen for you.

And if they don’t, then you start over.

Kain and Stauning Release Comprehensive Study – Lots of Leadership Lessons Throughout

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After nearly a year of studying the inner workings of successful automotive dealerships’ Internet sales efforts, David Kain from Kain Automotive and Steve Stauning from pladoogle.com have released their groundbreaking study showing the activities and actions that truly drive Internet sales success for today’s automotive dealers. Their conclusions are expected to shape the structure and content of automotive dealership sales efforts for years to come.

Kain and Stauning, industry veterans in the automotive digital marketing space, spent countless hours evaluating successful Internet sales operations and reviewing the data from nearly 4.3 million sales leads to uncover the fifteen most impactful activities car dealers can undertake to ensure they are successful with their Internet sales efforts.

“With so much being written about the relative impacts of social media, David I felt like it was time to take a deep dive into what was truly driving sales for successful dealers,” shared Stauning. “In fact, the automotive blogs were so gaga over social that it seemed no traditional online marketing source had any value.”

To the contrary, reveals the study (which began with case studies involving third-party leads and evolved into a deeper study into what drives Internet sales success for today’s dealers). Both Kain and Stauning felt that their consulting clients were benefiting from a robust lead mix (including third-party leads), but they had no way to disprove the theories being bandied about by the most vocal on the industry blogs.  The boisterous few on most automotive marketing websites were shouting that dealers should abandon these tried and true leads in favor of focusing 100% on first-party leads and social media.

“Nothing could be further from the truth,” piped Kain. “Our study results are clear: Dealers who want to be truly successful with their Internet sales efforts need to cast a wide net… and that net includes traditional third-party leads.”

Among the most impactful activities that separate successful Internet dealers from their middling competitors are the obvious factors like quality of lead response and the adherence to a written process; though the study revealed a higher level of importance for some not so obvious factors like middle management support and level of accountability.

“We were a bit surprised that sales, desk and F&I mangers had such an impact on a store’s Internet sales success,” added Kain, “we knew there were dealerships where these managers can be roadblocks to Internet growth, we just didn’t realize the extent to which their honest support and buy-in would catapult a store’s Internet sales.”

The study, available at KainAutomotive.com and on the Kain Automotive Idea Exchange, provides dealers and their managers a compelling and comprehensive overview of the model Internet dealership by providing real world examples of successful dealerships. Moreover, Kain and Stauning weave their own industry knowledge into the study where appropriate to help dealers learn how they can leverage all fifteen of the factors/activities identified.

 

The New Learning Gap: Business Leaders Know Little About The Internet

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Today’s Leaders Are Tomorrow’s Followers

 

For some reason I’ve run into too many business leaders lately who know less and less about how their businesses are being marketed on the Internet. From owners and CEOs to vice presidents and general managers, leaders (even good ones) are getting further detached from the realities of what truly drives their bottom line.

 

With virtually all of their customers now virtual, you would think these leaders would hunger for knowledge about digital marketing – not so. In fact, some of them seem downright fearful, and any leader afraid to learn about what makes the Web tick is destined to be a slave to the very people he is tasked with leading.

 

Rather than recreate the wheel, there’s a great article on the subject and how it is affecting car dealers at the automotive industry blog DealerRefresh.

Stop Managing Activities and Start Seeing Results

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Keep Everyone Busy So You Can Kill Creativity

In the current economic climate (one that we’ve dubbed The Great Necession), it seems that companies are so concerned about productivity that they’re forgetting about innovation and creativity.

Whether we’re all trying to cover our asses as managers or whether we truly believe that micromanagement and piling on the busy work is the key to survival during The Great Necession, we have become obsessed with ensuring everyone still employed is constantly busy.

Understandably, many workers are doing their job and that of their laid off former coworkers; though even this doesn’t explain what we’ve observed over the past several months in workplaces across America. Too often to be a coincidence, we’ve watched in disbelief as more and more managers unnecessarily micromanage the activities of their charges in an effort to magically drive more output.

We’ve become so concerned with keeping everyone busy that we don’t leave time for our employees to be creative or creatively solve problems.

Manage the Results, Not the Activities

Often because they don’t fully understand the goals, junior managers fall into the trap of managing or micromanaging the activities of their subordinates. When desperate, even seasoned leaders will sometimes scramble to drive productivity through the micromanagement of daily activities.

The Great Necession has created more than a little desperation in the workplace.

The key to reaching your team’s goals as leaders is to clearly identify the goals and then monitor and manage the output of those contributing to the achieving of these goals. When you try to manage the inputs (the activities) instead of the outputs (the results), you most often find you’re driving fast, though in the wrong direction. Additionally, you cannot hold your subordinates accountable for the results that the overly-managed activities attain.

When you tell someone not only what to do, but also how to do it, you own the results – good or bad.

We Need Creative Problem Solving to Solve Our Current Problems

Left to their own accord, people will always find ways to do it cheaper, faster, better and safer. If you’re micromanaging their activities, you leave them no time to improve your products or processes; and thus, no time to help pull your company through the tough times.

As leaders, it rests on us to guide our companies through this economy. Your people are counting on you to do just that. It’s time to lead again: Resist the temptation and stop managing the activities and just manage the results. It’s easier. Of course, do this only if you want creative solutions to your company’s problems.

TheManager’s Leadership Book Review

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Don’t Bring It to Work – Breaking the Family Patterns That Limit Success, by Sylvia Lafair, PhD

I absolutely love it when an expert in a non-business field brings their knowledge to the business world. Whether it’s a former all-star athlete turned successful businessman (ala Julius Erving), or a rehabbed musician turned stock trader (ala Guns N’ Roses’ bassist Duff McKagan), they almost always provide interesting and important perspectives on how we conduct business, and how we lead and manage others.

One of the biggest problems in business today is that we already have all of the answers and we feel don’t need any new blood changing the way we do things. I’ve always been fascinated by the closed minded who fail to embrace or even believe that someone from the outside – armed with a fresh perspective – can make a positive impact. The fact that so many continue believe this despite the myriad of examples of outsiders who successfully bring change is nothing short of astounding. Dr. Sylvia Lafair is one such example of an outsider successfully delivering change.

Lafair, a former family therapist who now serves as the president of Creative Energy Options, Inc., brought her expertise to the business world and with it a unique point of view about office politics, leadership and workplace roles and relationships. From working with dysfunctional families to years of providing leadership training and insights into workplace behavior and relationships for corporations like Microsoft, Dr. Lafair operated in the greatest leadership laboratory of all time: The real world. In the process, she also penned a great read that captures the very essence of what’s holding so many leaders back: Their reliance on destructive family patterns. Her book, Don’t Bring It to Work, shows us that our behavior cannot exist independently from our interpersonal relationships, despite the facade we think we portray.

Charity Isn’t All That Begins At Home

If you buy in to Lafair’s premise, then virtually everything that’s holding you back at work is closely related to the role(s) you play at home. Whether you are a persecutor or pleaser at work, chances are you play this role in your personal life, as well. In fact, according to Lafair, you are basically compelled to play the same role at work that you do at home – you are simply more comfortable this way – unless you can be made aware of your behavior, understand it and then transform yourself by taking appropriate actions. (By the way, if you don’t buy in to this premise, then you’re likely a rebel at both work and at home; which means, of course, that Lafair is still right.)


Certainly, it’s not that uncomplicated; and bravo to Lafair for not trying to insinuate that we simply live in these roles and those are our only issues. Equally important to the role you play are the roles of those around you. If you are not aware that you are a slave to your personal patterns, then you are likely to have conflict with those who do not fit into your “ideal.” As Dr. Lafair puts it: “When our colleagues and bosses don’t match our expectations, we realize this in a matter of seconds, and just like that, the seeds of conflict are sewn.”

Unlike the typical easy-read coping tomes such as The Five Dysfunctions of a Team and Who Moved My Cheese, this book requires real dedication from the reader. In other words, it is not for the casual passerby who just wants to polish this or that about their behavior at the office. Just like real change, this book requires work.

The Recommendation

There is no doubt that I recommend this book, I do. My dilemma is whether it is more leadership, self-help or team dynamics. The truth is that Don’t Bring It to Work can help your personal and professional development much in the same way as Stephen Covey’s 7 Habits does. Just as 7 Habits applies as much to your home life as it does to your work life, so does Don’t Bring It to Work. And, just as Covey’s work is as much about leadership as it is about personal improvement, so is Lafair’s.

The mix of real world examples with a sometimes textbook feel (likely from the massive amount of footnoting early on) is actually very well done. I especially applaud Lafair for her inclusion of a recap called “Takeaways” at the end of each chapter. Because the concepts are sometimes very deep and the material sometimes very new to the reader, having this brief recap at the end of the chapters is very helpful.

While many can benefit from this book, I especially recommend if for two specific people: First, for the young manager who is tiring of seeing his colleagues promoted at greater frequency; and second, for the self-actualized leader who cannot seem to find anything wrong with her style or approach, yet her team is still a mess.

(To order Don’t Bring It to Work, visit Amazon.com.)

The Truth about Cash for Clunkers

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Leadership Decision Making and The Law of Unintended Consequences

Certainly you’ve heard the axioms “nothing happens in a vacuum” and “for every action there is a reaction” before. We’re pretty sure that every thinking adult not only understands these sayings, but also believes them to be true.

Cause and effect, means and ends, seed and fruit cannot be severed; for the effect already blooms in the cause, the end preexists in the means, the fruit in the seed – Ralph Waldo Emerson

RWE is correct, but he fails to mention that each cause actually has multiple effects; every mean leads to numerous ends; and that each seed can bear bushels of fruit. Cause and effect, like means and end, can imply both good and bad outcomes; and both scenarios – unlike the planting of a seed – often create results that are unintended and unforeseen.

The law of unintended consequences is not a new phenomenon, and it’s especially not new to government action. History has shown at every turn that government intervention, regardless of the benevolent intention, leads to numerous unforeseen and unintended consequences. Certainly, some of the outcomes are beneficial, though the vast majority are not.




The Truth about Cash for Clunkers and The Law of Unintended Consequences

In a nutshell, the US Government created a program that requires taxpayers to spend $3 billion help 750,000 people to buy a new car. The program, officially the Car Allowance Rebate System (CARS) though more commonly known as Cash for Clunkers, was created solely “to energize the economy; boost auto sales and put safer, cleaner and more fuel-efficient vehicles on the nation’s roadways” – this, according to the government’s official cars.gov website.

While nearly everyone in Washington was breaking their arms patting themselves on their collective backs after just two weeks of CARS, the truth is that this program, like all government programs, has already spawned numerous unintended consequences (and none of them positive). Here are just a few:

  • Kelley Blue Book analysts are predicting a bubble in used car prices as a result of the CARS program. This means the cost for a used car is going to be higher, creating a burden on the working poor and lower middle class.
  • Charities are reporting that donations of used cars are down 20% since the start of the CARS program.
  • Already hurt by the economic downturn, used car lots are seeing an additional 20% drop in sales since the beginning of the program – these lots are more often owned by local businesspeople and not large corporations.
  • Some independent auto repair shops – precisely the kind that would service an older car – are reporting up to 25% decreases in their business.
  • Because of the increased demand for many models, car dealers are not discounting beyond the required manufacturer’s rebate. This means that all consumers are paying more for these models.
  • Economists blame the drop in overall July retail sales on the CARS program; arguing that consumers spent on new cars, but cut their spending elsewhere – deepening the recession the program was meant to help stop.
  • The top new model sold so far under the Cash for Clunkers program is an SUV – the Ford Escape – and two large trucks (Ford’s F-150 and Chevy’s Silverado) and a Jeep are among the Top 10 new models sold. (Hardly the pro-green movement for which the government was hoping.)
  • 750,000 working automobiles will be taken out of service and replaced with 750,000 new vehicles. The process of manufacturing each new car (when you account for the acquisition of all material required) is a much more polluting proposition than driving each old car until its natural demise.


It’s clear that Cash for Clunkers will do little, if anything, to stimulate the overall economy; but what about the nation’s car dealers and manufacturers? While dealers are making more per car sold and manufacturers are seeing their inventory backlogs shrink, both of these benefits will likely be short-lived.

The increased demand created by the CARS program cannot be sustained without better economic news. The dip in overall July retail sales signals to us that the end is not as near as we had all hoped. Instead of kick-starting the US Auto Industry, Cash for Clunkers likely pulled ahead many consumers who would have purchased later this year and in 2010. This means many dealers should look for softer than expected new car sales from September through the end of the year.

For the manufacturers, it seems they never learn. Ford announced this week that as a result of the “success” of the program they are ramping up production in the US. While this should be good news for the economy, it likely signals that Ford will be cutting production more than usual this November and December. Rather than enjoying the higher prices brought on by the momentary (and sure to be short-lived) spike in demand, Ford plans to run with the standard Detroit playbook and chase demand by building more cars, trucks and SUVs in the next couple of months. It’s as if Ford is proclaiming “Forecasters be damned, the recession is over.”

…

The leadership lesson in all of this is that the world is always more complex than it seems on the surface. Whether we’re talking about the US Economy or the five people in your workgroup, there is an equilibrium that must be considered before major changes are enacted. Understanding how these changes will affect all stakeholders is an important first step towards reaching your goals; but it is only a first step.

It is equally important to make assumptions about the unintended consequences that will inevitably define the success or failure of any major project, program or transformation. While you’ll be wrong more often than you’re right, just knowing that unforeseen outcomes are expected will make you a better leader – if for no other reason than you’ll be better prepared to manage the unanticipated results.

The Effect of Ego on Leadership

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The Effect of Ego on Leadership

At AskTheManager.com we’ve always held to the belief that you can learn more from bad leadership examples than you can from the good ones. It’s not really cynical to think this way; in fact, we believe it’s quite healthy. It’s like seeking out the silver lining. We’ve learned so much from the poor, ineffective and insincere leaders in our lives, we feel we should thank them. And, when we closely examine the failed leadership examples of our collective past, we are faced with an overwhelming preponderance of overactive egos at work.

Of course, there are a few in the leadership development community who believe that leaders must possess the largest ego in the room to be truly effective. We disagree. Enlightened leaders – by their very nature – are as egoless as enlightened clergy. They serve, and as servants they deliver incredible results through the efforts of their entire team.

Even if you balk at the suggestion that effective leaders keep their egos in check, you cannot debate the negative impact of ego on team dynamics. Unhealthy ego is the single greatest barrier to teams working together effectively. Ego wears away the effectiveness of teams, and creates an agenda-driven environment where those with the uncontrollable egos put their needs ahead of the goals (and their teammates).

Ergo Ego

It’s not much of a stretch to understand that if the human ego can damage the dynamics of a team, and if teams are most effective when they have effective leadership, then leaders with too much ego can be damaging to their organizations.

Businesses need people to work as teams to meet their goals. Teams need effective leadership in order to function properly. When the leader makes it all about themselves, the team (and the organization) suffers.

Think about every bad business situation you’ve ever witnessed: What effect, if any, did ego play? Chances are that for most of the negative business situations in your memory bank, you can pinpoint the cause as ego-driven.


What’s a Bad Leader to Do?

If you’re an ineffective leader who recognizes they bring too much ego to the table, congratulations. Admitting you have a problem is always the first step. The next steps are a little harder.

In order to become an enlightened, effective leader (yes, this is a little redundant) you first have to realize that you don’t have all the answers. Even if you’re the owner of your company, you must understand very early on two important facts about industrial knowledge:

  • Those closest to the customers have the answers; and
  • Two heads are better than one.

As a leader, you are generally not the closest person to your customers (and you only come equipped with on head). Assuming you know it all is asinine and can be destructive to any organization. Seeking advice and answers from others not only makes you appear more genuine, it also means you’ll make better decisions.

Your next step toward shedding that melon-sized ego is to instill some humility in your routine. Humility, for those egomaniacal loons reading this, simply means that you’re humble; that you lack the pride and arrogance that makes you believe that everything is all about you. It also means that you see your major contribution as building and maintaining a motivating work environment that engages your team. (Leaders without humility believe their major contribution to the effort is the greatness that is “me.”)

Once you understand that you don’t know it all and that it’s not all about you, you can begin learning. Enlightened leaders have a voracious appetite for learning. They learn from books, from seminars and they especially learn from others. Truly enlightened leaders believe that everyone, even the receptionist and the janitor, has something to teach them. And they understand that the best way to learn is to listen.

A Spade is a Spade

Without some outside help, of course, it will be nearly impossible for the ego-driven leader to change his ways. We recommend assigning a peer or even a subordinate to call you to the carpet when you fail to provide humble, servant leadership.

Ask someone you can trust (and won’t resent) to call you an egomaniac when you step out of line. Encourage them to stand on your desk and shout at you whenever you fail to remain humble. You have to be willing to permit these constant course corrections or you have no chance to recognize and repair the destructive effects of ego on your leadership style.

The bottom line is that can’t let your ego get in the way of the goal. Your ability to overcome self-serving tendencies will determine your team’s effectiveness and anything you can do to give up your desire to be the center of attention can only help.

The Great Necession: Leading in Tough Economic Times

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It’s not a Recession, It’s a Necession

Anyone bothering to pay attention to what’s happening with consumer spending in the current recession can note one trend: that is, even those consumers who are likely to be unaffected by the economic downturn are helping fuel the recession because they’ve gone into wallet lockdown. They’ve declared that we are in the Great Necession of 2009.

While one could argue that in a free market no job is ever really safe, 92% of Americans who want a job, have a job. Moreover, most of those same 92% are likely to have little disruption to their income streams over the foreseeable future.

So why does the housing market continue to tank and why are new car sales sitting at their lowest levels in decades? People have been scared into a Necession.

Forget for a moment that the credit markets have tightened; there aren’t any tire-kickers on dealer lots or looky-loos at the Sunday open houses to apply for credit. Why? Because no one in their right mind is going to buy a new car or house until they need to buy one.

How do you know we’re in a Necession?

Traditional large discretionary purchases (like cars, boats, vacation homes) are based on emotion and impulse, not on necessity. Cars, for example, are built to last for a decade or more, yet many Americans habitually traded in their cars every 18 to 36 months. This is what fueled more than 16 million new car purchases a year as recently as 2006. (Read our related post on the auto industry here.) We’re now at half that amount; and because of the Great Necession of 2009, we predict the auto industry won’t see the 16 million mark again before 2020. People just don’t need to buy a new car, regardless of the availability of credit, and now they know that.

The economic realities of today have taught those of us who’ve lost jobs and those of us with good jobs that we need to live within our means. One colleague recently told me he will never again have a monthly financial commitment (he called it his “monthly nut”) greater than he can cover working for minimum wage. I believe him. His spending paradigm has been forever shifted from one of excess to one of “necess.” He is a New Era Necessionist, helping fuel the Great Necession.

How to Lead in a Necession




The unfortunate reality of being in a Necession is that even when the credit markets relax and the layoffs subside, retail spending will not return for a very long time. Consumer confidence may return, but consumer spending – that is, spending like drunken sailors on shore leave – will not. The generation that lives through the Great Necession will be much like the one that lived through the Great Depression: they will change their habits forever for fear of a return to bad times.

The only remedy for leaders is to instill confidence. You must reek of confidence when dealing with your acquaintances, your employees and your customers. (It certainly doesn’t help when the media seeks a negative slant to every story – but great leaders know to control what they can control, and to limit the influence of that which they cannot.)

People are simply not productive when they fear their jobs are in jeopardy. Lacking confidence, otherwise sane managers can literally become paranoid – rendering them ineffective. The rumor mill – fueled by negative thoughts and doomsday predictions from the rank and file – runs rampant. Job dissatisfaction from an uncertain future begets customer dissatisfaction; while customer dissatisfaction begets even lower sales, leading to a further erosion of employee confidence.

It’s our job as leaders to keep all of this from happening. So let’s agree on few easy paradigm shifts:

  1. The times are challenging, but our future looks great. Believe this and live this, then use this as a standard reply to anyone (especially employees and customers) enquiring about your business.
  2. The best part about a recession is the thinning of the herd. You need to believe this and live this, as well. Feel free to speak to your employees in these terms and let them know you appreciate their hard work, because it is their hard work that will help them and everyone else at your company keep their jobs.
  3. We cannot wish our way back to prosperity. Too often we see managers looking for magic pills to solve a crisis. The truth is that anything worthwhile takes hard work – otherwise, everyone could do it. You need to gain a solid commitment to best practices from everyone in order to save your company.
  4. Sales cures all ills. While it was this very saying that partially got us into this mess (we didn’t realize we had bad leaders, because times were good and revenues were growing), returning our teams to a “selling culture” is one of the quickest ways to right any ship. Unfortunately, many businesses have focused too heavily on cost-cutting and not enough on the fundamentals of selling. Get your teams back to basics: focus on selling activities, not results, so that when the market turns, your team will get more than their share.