Why A Slow Economy May Be Good for Your Executive Career

I am not an economist.

But I do remember the 1990s (the first half, anyway) where growth was slow, about 2 to 3 percent per year. This was before the Internet took off and before we all got connected online. If we rip out a page from that time frame, we can see overall benefits to slow, steady growth.

1. Opportunities are real and based on true growth.
2. Productivity is based on actual revenues booked.
3. Investment is given to companies that have proven their success.
4. Customer demand is based on value, not hype.
5. Jobs are created when productivity meets capacity.
6. Prices are based on real demand and are competitive.
7. Growth is manageable and predictive. 

What is different today than 20 years ago is how people are to be employed, with lower barriers to enter the world-wide labor pools, and social networking creating interactive work flows rather than static work structures.

Therefore, executives must be willing to move away from the idea of a j-o-b and think in terms of how they can be engaged in the flow of fluid work, ignoring the method in which payment is received (wages versus income).

  

But here lies the rub.

Many of us who are in the executive ranks are so stuck in “…working for an organization…” when that very ideal organization is being re-engineered as we speak. It is being uprooted from within. Beyond the media reporting and government metrics is a whole underworld of opportunities. These opportunities are similar to the current in a river where, at the surface, it looks calm and placid, yet underneath is a ranging torrent of water that creates the real movement of the river itself.

The real economy today is the torrent of opportunities that run under the surface of traditional industrial-age job creation, including the metrics that give us an idea of what’s going on. In my opinion, these metrics are so out-of-date no wonder consumer confidence is at an all time low!

So…what’s the answer?

  

It lies in understanding how to be engaged in the flow of fluid work. Here are a few insights that I’ve gained:

• Work is being reorganized around essential tasks, not roles
• Tasks are viewed in terms of impact and return on investment, not functional expertise
• Labor is being hired based upon contractual outcomes, not job descriptions
• Hiring is based upon co-creation, not individualized responsibilities
• Money is flowing to value creation entities, not high-priced candidates

This fundamental restructuring of work and what work is valuable is moving away from what an individual can do and is looking for network pools of labor flows that can assist an organization to meet customer demand, keep overhead costs constant, and receive increased value for each essential task performed.

What does this mean for the “traditional executive”?

Let me know what you think and I’ll share your thoughts

Industrial Manufacturing M&A's Take Off, Rebounding Sector

Mergers & Acquisitions Daily, a daily eZine from the Association of Corporate Growth, stated in it's August 13, 2010 publication that:

"Industrial manufacturing saw M&A's take off thus far this year, according to a PricewaterhouseCoopers report tracking dealmaking in recent years....Hiring seems to be moving toward a rebound for the sector." (written by Jonathan Marino)

This is something that I've been seeing for the last 18 months.  Particularly in the Atlantic South of the U.S.

What have you found?

Five Ways To Get In On the Deals in B2B Industry

Pitch Book News reports that

"Since the beginning of the year, PE investors have exited 129 companies through a sale to a corporation, according to the PitchBook Platform. The median deal size for corporate acquisition exits in 2010 YTD is $223.5 million with eight deals crossing the billion dollar mark, including Elevation Partner's sale of Palm to Hewlett-Packard (NYSEQ: HP) for $1.2 billion. Corporations appear to be most interested in B2B Products and Services this year, buying 34 PE-backed companies in the industry. Other industries attracting much interest are B2C Products and Services with 29 companies and Information Technology with 19."

Implications:  Companies are buying up healthy organizations from Private Equity Firms and that means opportunities for executives to lead these new SBUs.  How?

1. Keep in touch with the money flow in your town/industry.
2. Ask different questions of your network instead of the tired, old "who is hiring" question.
3. Think first.  What is the most likely next step for a target company?  Will they be able to buy a company from a PE firm?
4. Get connected to PE brokers.  Ask what B2B companies are on the market. Track these companies
5. Stay connected to PE firms.  They need to re-invest. Find out what they are doing.

Executive Opportunities: Is "Green" a Fad or Fact?

According to McKinsey Quarterly,

Many governments have been actively trying to promote growth, competitiveness, and employment. But policy makers who hope that advanced “clean” technologies can create work on a large scale will probably be disappointed, because these sectors are just too small to make an economy-wide difference. The local-business and household-services sectors are a much better bet: from 1995 to 2005, services generated all net job growth in high-income economies. Low-tech “green” activities, such as improving the insulation of buildings and replacing obsolete heating and cooling equipment, could generate more jobs than renewable technologies can.

The chart is shared and was published in August 2009.

• Is "green" a fad or fact? 
• What have you found? Are there more opportunities in "clean" technologies where you live?

Go East, Not West, Young Man!

The Robert Walters Asia Job Index is a real eye opener.

Horace Greeley

The percent change in job advertisements for professional positions placed from Q1 to Q2 is 31.52% in Hong Kong, 13.7%% in Sinapore, 34.27% in Japan, and 36.68 % in China (with 10 million job openings) for a total of 11M jobs add in April through June of this year.

Amazing!

The famous quote by Horace Greeley, "Go West, Young Man!" has to be turned 180 degrees to find new employement opportunties.

But I think that in the United States or developed regions like Europe, opportunties abound.  They are just different than how we traditionally see employment.  As McKinsey reported in their ten trends (see previous post on July 27, 2010, Organization of Networks - Part I), employment as we know it has changed for the executive/professional. 

Options include outsourcing, close sourcing, interim executive roles, networked pools, and other "nonemployee" roles can be found through digging for opportunities, rather than trying to find the traditional 7am to 7pm job.

What are you seeing in your world?  Have opportunties taken a different form?  Let's share.

PE Deals in Consulting Industry May Provide Opportunities for Executives

Pitchbook News, a weekly eZine from PitchBook Data, Inc., recently reported that...

148 companies in the Consulting Services industry have been involved in PE deals since the beginning of 2007, according to the PitchBook Platform. Deal activity in the industry is on the rise this year with 19 completed or announced deals so far, already smashing last year's total count of 12. 160 service providers participated in the deals. Credit Suisse was the most active, participating in 6 deals, followed by Goodwin Procter , Kirkland & Ellis and Ropes & Gray , each of which participated in 5. The most active investors in the space during the same time period include The Riverside Company (5 deals), DC Capital Partners (4), The Blackstone Group (3) and Vista Equity Partners (3).

Implication: opportunities for those who are connected to these deals/contacts.

Executive Actions: 

1. Use your network to connect to deal makers in the investor industry. 
2. Follow the money flow in your city and you'll find opportunities happening under the radar screen. 
3. Keep looking to your peers to give you information that you may not get online or in print.
4. Observe the trends by keeping connected to a variety of thought-leader reporting, such as PitchBook News.