A chicken race to a double- dip recession?

In 2011, the economy has for the most part been chugging along. True, the news have not always been good, but as of late consumer confidence, industrial production and unemployment have been trending in the right direction.

That is, until our elected “leaders” decided to organize a chicken race over the federal budget. The unseemly spectacle over the debt ceiling and the following Budget Control Act of 2011 on budget cuts and taxes did nothing but postpone the important decisions, and create more insecurity both domestically and overseas. For a Eurozone suffering both slow growth and bailouts of underperforming countries like Greece or Ireland, this was not good news at all. The last weeks events have increased the risk of a second recession.

So, what needs to be done? It is a demographic fact of life that the population is aging, and will require more health care. This will put cost pressure on programs like Medicare and Medicaid. Long term the budget must be balanced, which can only be done by tax increases and/ or reduced spending. Not doing anything is not an option, politicians must step up to the plate and start making the difficult decisions. There can be no holy cows, everything must be scrutinized: defense spending, agricultural subsidies, education, all manners of entitlements, housing programs, a new value added tax, and so on. An honest discussion along these lines will unto itself have a calming effect on the financial markets. Nobody expects the problems to be solved immediately, but everyone expects something to be done.

Finally, to call the proceedings between Republicans and Democrats a negotiation is a stretch. As the dean of the Kellogg School Sally Blount points out in a recent blog entry “For anyone who has studied negotiations in organizations in any depth, it’s clear that the organizational structures, prevailing culture and job incentives that now make up our political process are not effective. With a public stage always ripe for grandstanding, an embedded culture of partisanship, and a lack of clarity regarding facts versus opinions in debate, the strategies for effective negotiations that we know work are just not possible here.” http://www.kellogg.northwestern.edu/Dean_Blount/blog/whither-washington.htm

Clearly there are political changes needed. I have always wondered why the US stubbornly sticks to a two- chamber parliament? Why not follow the example of many modernizing economies, and put emphasis on the proportionally elected House of Representatives? Giving them broader authority and longer terms would enable more responsible politics, and better accountability to the voters.

Why B2B Branding is Becoming More Important

In industrial marketing, emphasis is on showing features and benefits of the product or service one is selling. There are no impulse purchases, buying is done through a process: identification of need, development of specs, vendor list, RFP and negotiations. Lowest total cost is more important than lowest price.

Brands are used to facilitate the buying process, for example by projecting stability and expertise (ITT, GE or IBM) or innovation (Godwin Pumps, Intel). Brands take some anxiety out of the buying process, and give the buying agent something familiar to hold on to when looking for solutions needed.

Now, with a lot of uncertainty and lack of visibility in the economy, brands are taking on additional importance. In a recent article in Kellogg World (http://www.kellogg.northwestern.edu/kwo/spr11/features/carpenter.htm), Professor Gregory Carpenter holds that brands can help slow down competition by carrying over a company’s good reputation across ever shorter technology cycles.

He also points out that we no longer fully understand how buyers learn, and where they get their information in a hyper- competitive slow growth environment. Hence, brands are becoming more important as differentiators, since a strong brand is more difficult to build or copy than a product or service offering.

The great challenge for organizations now is to be nimble, to have a clear strategic direction and the organization structure to be able to quickly make and implement important decisions.

What used to take months now has to be done in weeks and days… This entrepreneurial mindset is difficult to marry with large organizations, but with proper decentralization and delegation it can be done. Perhaps a closer study of how Venture Capital companies manage their portfolio businesses could shed some light into speedy decision-  making and implementation?

“Mission Tactics” and Management of Generation Y

There are big changes going on in the workforce. Many baby- boomers are leaving and the new hires were often born in the 1980’s and 90’s. Any leader who has been managing people of different ages can attest to how different this “Generation Y” approaches work and the workplace:

1. Technology, communications, social networking and multitasking are second nature. The best and brightest among Y-ers are also strong in teamwork and presentation skills
2. Work is something you do, not a place you go to, there is a desire to have the workplace adapt to you instead of the other way around. Expectations are high in terms of pay, career progression, vacation and other (simpler) perks like casual dress or listening to iPods at work
3. Loyalty to an organization is low, employees can bolt if they perceive better opportunities somewhere else
4. Upbringing has seen great emphasis on building and preserving self- esteem, so a premium is placed on “Success” and “Rewards”, even when perhaps there is not much success to reward. On-going positive reinforcement is expected and well received, corrective feedback or coaching is not always received equally well
5. Used to direction and guardrails, many Gen Y individuals are not great with unstructured situations, but prefer detailed instructions and guidelines

With staffing oftentimes skeletal already, managers have new issues to deal with when managing Generation Y. How do you motivate them? Provide feedback when something is wrong? How can you trust employees will take initiative or be accountable? What about decision- making, do managers have to make all decisions?

As somebody with managerial experience with employees of different ages and from different cultural backgrounds in different organizations, I offer up the following idea: management by objectives/ MBO works well with all kinds of employees, if they have correct skills and are empowered to make decisions. In the military, elite units in many countries are managed using a version of MBO called mission tactics.

Under mission tactics the leader does not give detailed orders and directives. Rather, she communicates the desired outcome or result, what resources are available, and gives teams or subordinate leaders opportunity to plan an approach based on their skills and expertise.

The leaders role once plans are in place is not to micro- manage, but make sure there is reporting, alignment and progress against milestones. Coaching is provided as needed, and successes duly celebrated.

Mission tactics were first used in combat situations where lack of communication made information difficult to share, and orders difficult to give. Instead soldiers understanding the commander’s intent could make independent decisions, be flexible and use initiative for a mission to succeed.

The big advantage of managing civilian organizations in a mission tactics mode is employees are free to tackle each task as best they know how, instead of having a manager commanding and controlling. Work teams that are well put together will help individuals from Generation Y be assertive around planning, to take initiative, and receive feedback from their peers.

If the task is important and there is a reward for successful completion, employees of all ages and level of experience will apply themselves, work hard and do their best.