Tuesday, January 6, 2009

How Do We Respond to the Current Economic Conditions?

Fast Company recently asked the author of Good to Great (7 million copies sold), Jim Collins, "What does your research suggest about the best way to respond to the current economic slowdown?"

He answered, "If I were running a company today, I would have one priority above all others: to acquire as many of the best people as I could. I'd put off everything else to fill my bus. Because things are going to come back. My flywheel is going to start to turn. And the single biggest constraint on the success of my organization is the ability to get and hang on to enough of the right people."

Is it safe to say, then, that the economy is in trouble because the largest corporations in the U.S. do not have the right people to make the right decisions? Why have many of the largest companies in America not been able to "hang on to enough of the right people"?

In an industry of nearly 100% turnover annually, the Container Store's turnover is 18% annually. Not only does the Container Store hang on to the right people, but, the Container Store has been on Fortune's list of The Best Companies to Work For since 2000; twice, the company has been number one. One employee boasts that she turned down a job at the World Bank to work for the Container Store. The Container Store is able to "get and hang on to enough of the right people" because they have created a democratic company.

A quick evaluation of all The Best Companies to Work For demonstrates that "the ability to get and hang on to the right people" is a matter of company structure and company culture. The current economic times are not the result of bad debt. They are the result of a rejection by the latest generation of workers in America and the result of many large companies' inability to "get and hang on to enough of the right people."

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How Will You Measure Your Life?

I recently read this article by Clayton Christiansen out of Harvard entitled, “How will you measure your life?” It is what he tells his students on the final day of his class.

One of the items that he mentions sticks out to me. It reads as follows:

“One of the theories, . . . . . how to be sure we find happiness in our careers—is from Frederick Herzberg, who asserts that the powerful motivator in our lives isn’t money; it’s the opportunity to learn, grow in responsibilities, contribute to others, and be recognized for achievements. I tell the students about a vision of sorts I had while I was running the company I founded before becoming an academic. In my mind’s eye I saw one of my managers leave for work one morning with a relatively strong level of self-esteem. Then I pictured her driving home to her family 10 hours later, feeling unappreciated, frustrated, underutilized, and demeaned. I imagined how profoundly her lowered self-esteem affected the way she interacted with her children. The vision in my mind then fast-forwarded to another day, when she drove home with greater self-esteem—feeling that she had learned a lot, been recognized for achieving valuable things, and played a significant role in the success of some important initiatives. I then imagined how positively that affected her as a spouse and a parent. My conclusion: Management is the most noble of professions if it’s practiced well. No other occupation offers as many ways to help others learn and grow, take responsibility and be recognized for achievement, and contribute to the success of a team. More and more [people think] that a career in business means buying, selling, and investing in companies. That’s unfortunate. Doing deals doesn’t yield the deep rewards that come from building up people."

I’m sure you can see why it sticks out.