The new relentless economy: why it’s time to stop being scared

The setting sun in Savannah… and it’s also time to sunset those inefficient processes

We’ve talked a lot about the fear of change when companies explore radical steps to overhaul their global operations, and outsourcing undoubtedly represents a major change for most organizations used to running things a certain way for a very long time. 

People are scared right now – they feel threatened and are struggling to visualize where their careers are heading, where their organizations are heading, where the economy is heading.  But why be scared?  Shouldn’t we be filled with hope with this revitalized quest for improvement?

Having just spent two rather pleasant days with the excellent Sourcing Interests Group, enjoying (too much of) the carbohydrate-infused southern hospitality of Georgia’s Savannah, the common theme of discussions was centered on this relentless pace of change, and the in-exhaustive corporate pursuit  of cost elimination that is gripping the post-recession economy.  And executives are worried.  But why should they be?

Why we need to stop worrying

We’ve entered into an era which we have been demanding for a long, long time:  companies finally waking up, prepared to take definitive action to improve their global operations.  That means getting better at how efficiently they can close their books, pay their staff, hire new staff, manage their suppliers, collect their debts, support their customers and access accurate, timely data to make decisions.  Essentially, this entails ironing-out broken or inefficient process flows, sourcing better applications to enable them, and engaging talent to support them that doesn’t cost the earth. 

The fear comes from the fact that better automation and better process flows ultimately means organizations need less people to manage them.   But won’t that mean these organizations will be able to re-invest some of these newly-acquired efficiencies into areas that can help them develop new products or services, increase their sales staff, enter new markets, better manage their supply chains, investigate the potential of Cloud computing or video conferencing technology, or even, heaven forbid, develop their staff?

What we are witnessing is a re-distribution of human capital in today’s economy – not necessarily a reduction of human capital.  Many of us will need to explore role transformations where we take on jobs or responsibilities that we never imagined a few short years’ ago.  This change is one of new learning, new experiences, new challenges.  It’s about improving our own talents.  One thing is clear:  we won’t have a choice not to…

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10 Comments

  1. Posted April 3, 2010 at 9:22 am | Permalink

    Hi Phil,

    Scared, threatened, and uncertain, could all three be issues related to change, and appear to have one root and that is uncertainty.

    Uncertainty can in fact be liberating, in that the inertia around change, and each person’s wish not to rock the boat changes dramatically when there is not boat to rock!

    Uncertainty becomes opportunity, threatened becomes confidence, and scared gradually decreases as success is achieved.

    There is no such thing as real security in life, only that which you create for yourself in whatever way that works for you.

    Byron Pull

  2. Posted April 3, 2010 at 10:53 am | Permalink

    Scared rarely works for anything but avoiding immediate physical danger. Practical, take a little less risk, hunker down (as an on purpose strategy not a reaction) would all have been better approaches for anyone/business that chose scared a year back.

    I wonder though if “redistribution” of human capital does not create some of the same scenarios? If this “scare” only creates reactions to process and does not have the understanding of how to best leverage and reward human capital as a balance don’t we just make a big circle back to where we were? With a lot of REALLY scared individuals.

    Garrett Gitchell

  3. Tom Kearney
    Posted April 3, 2010 at 10:15 pm | Permalink

    Hi Phil:

    Interesting topic, but it appears you may be inter-changing employee roles with that of corporate goals.

    People, employees, managers HAVE been ‘re-distributed’ to the unemployment office and to very low paying jobs. They have the right to be scared (bills, medical, family obligations, health costs, mortgage payments, etc.).

    As you state, I’m sure many have ‘hope’ that one day they’ll be hired by a company that has created for themselves an opportunity to grow bigger and/or larger. But those future people, employees, managers are NOT the ones creating those opportunities. Thus, they are out of control and scared.

    For those people still employed and working in their career of choice, sure, they are taking on more tasks and responsibilities as other workers are downsized and systems are tweaked. They perhaps may not be too scared and they may indeed see that the organization is internally developing hope for themselves and for FUTURE hires – but that sentiment is not being seen by those already ‘re-distributed’.

    Tom Kearney

  4. Posted April 3, 2010 at 11:33 pm | Permalink

    I remember my parents talking about the depression and the effects it left on them.

    Now, I understand.

    We’ll move forward, but if we don’t remember, it’ll be the worse for us.

    There’s going to be psychological fallout on this one.

  5. Posted April 4, 2010 at 6:05 am | Permalink

    It is a time of fabulous opportunity, in my opinion.

    Christine Hueber

  6. Wallace Jackson
    Posted April 4, 2010 at 6:42 am | Permalink

    Phil,

    Scared is a state of mind. Those who triumph in any given economy are never scared,

    Wallace

  7. Posted April 4, 2010 at 8:28 am | Permalink

    @Tom: I agree that the recession months were extremely worrying for most of us, especially the unlucky folks who lost their jobs. My point being, it’s now time to move on and accept that businesses are aggressively moving down new avenues of automation, operational transformation and globalization. It’s time focus our careers where there is value and opportunity – of which there is so much if you look around you. And these opportunities exist at all levels, from accounts clerks to senior executives, to small business owners.

    Susan makes the point that the Great Depression fundamentally changed peoples’ attitudes. This recent recession, while not as profoud, is having a similar impact of many peoples’ perceptions and attitudes. It’s definitely time to drop the fear and start to evolve with these changing times,

    Phil

  8. Sonia Jaspal
    Posted April 4, 2010 at 8:53 am | Permalink

    Phil,

    I think with the changing dynamics of the economy and society due to globalization, technology enhancement and customer expectations, the organizations and employees have to change. We are at a strategic inflection point, where the old way of doing things is not going to work anymore and will have to be discarded. To take the first mover advantage the first ones to discard them and move to newer methods will be way ahead of the others.

    As you pointed out the technology is changing the job profiles. The thing which will get more and more emphasised is the human experience of dealing with customers, employees and suppliers. As the same technology will be available to all, the service differentiator is the emotions which are invoked on dealing with the organization.

    So people will have to learn to focus on other people. The more positive vibes they are able to get from the other people, the more successful they will be. Trust, integrity and empathy will be the aspects which all concerned parties will be looking at.

    The human element becomes more key now, than ever before. Whether it is culture, ethics, innovation, human angle will be the key to it.

    So as humans we have an option to be scared of dealing with other humans, or finally wake up to the fact that we have to learn to deal with others in a positive way. Our success will be dependent on our humanity,

    Sonia

  9. Aaron McLin
    Posted April 5, 2010 at 8:53 am | Permalink

    Phil: Jobs are really two things – they’re how businesses get things done that require actual people to do them; and they’re how people support themselves. One of the enduring issues that we have with jobs is that we’re long past the point where we can produce all of the goods and services that we need, and likely all of the ones that we want, without actually requiring all of our available workforce to produce them. (We’re also long past the point where one can go back to the farm to create a living.) This produces a surplus labor force. Now, that labor force can be deployed to create new technologies or otherwise aid in production of valuable goods and services, or it can be abandoned in the name of efficiency and cost savings.

    The fear factor comes from the fact that the average worker doesn’t have a way of directly influencing the decision as to whether or not to utilize his labor, and pay him for it, or force him to try and find some other way to support himself. While people may be hopeful that a new economy may have a place for them, that hope is still tied to the actions of others, rather than being something that they can bring about entirely on their own.

    Of course, people will have to be prepared to re-train themselves for different roles than they ones they first planned on – and there are going to be people for whom this is likely to mean a career defined by one entry-level position after another, as they move from job to job. The goal of being able to build a career by rising up through the ranks is going to be a difficult one to give up on, especially if it means lower overall earning potential and standard of living.

    What many people lack today is level of confidence that even improving their skills and talents will pay off for them. After all, being the most talented person in the world doesn’t help much if there’s no real need for your particular talents.

    Aaron McLin

  10. Posted April 6, 2010 at 7:44 pm | Permalink

    Phil – lots of thoughts, yet the one that keeps plugging at me is that there will be a labor shortage in the next years – - purportedly 4 million by 2011/2012 and over 35 million by 2030, the 77 million baby boomers sure fit in. While I’d argue that the last two years have some impact to the 4 million number, overall, there is a global issue. In essence, I agree with you on redistribution – - for the past 10+ years, companies have been looking for the higher level analytical skilled resources as technology and automation create the requirement for such skills, the past two years and massive layoffs pushed the line forward. Like Jack Welch said “We’re firing people out the front door as we hire from the backdoor.”

    Fred Dempster

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