Plan Now to Expand - How executives can make the right business decisions based on a clear view of the future.
Economist Alan Beaulieu Projects 2010 Recovery
Here’s the tough news: the next six months (March-August) will be worse than the previous six months. And the good news, we should see the economic recovery begin around March 2010 based on the monthly trend in the U.S. Industrial Production Index.
This projection, was made by economist Alan Beaulieu of the Institute for Trend Research. The information Beaulieu conveyed was geared to help executives make the right business decisions based on a clear view of the future.
Many Main Street business owners will be oblivious to the recovery as it’s happening, says Beaulieu, and won’t recognize the recovery until three to six months after it has begun. Vistage members, armed with a reliable economic forecast and actionable advice, will be able to pull ahead of those businesses that recognize the recovery too late.
Following are highlights from Beaulieu’s three-hour presentation.
Based on the movement of leading economic indicators:
• The recovery will begin around March 2010, and will be so mild that most Main Street businesses won’t trust that it’s a true recovery until we are three to six months into it.
• U.S. housing markets will reach a low in late 2009 or early 2010 when prices flatten out before rising again in 2011.
• Disinflation (a decrease in the rate of inflation) or deflation is likely to continue into 2010, while inflation returns in 2011-2012.
• Unemployment will peak in early 2010 above 9 percent nationally. Job growth should begin around September 2010.
• Credit conditions will improve somewhat in 2010, when we should see renewed lending at low interest rates.
• The value of the dollar against other currencies won’t change much from now through the end of the year.
Advice to Business Owners
Beaulieu recommends that business owners take the following action:
• The middle of 2010 will be a golden time to expand your operation. New and used equipment will be inexpensive, real estate will be inexpensive, interest rates will be low. Start planning your expansion now.
• Borrow as much money as you can in 2010, as conditions may not be as favorable in the years to follow.
• If you lease business space, renegotiate your contract as vacancy rates goes up later this year.
• Hire some of the exceptional talent that will be available through 2010.
• Stop activities that don’t create profit, such as a seminars, services or other things that lose money for your company.
• Eliminate products that aren’t profitable. Get rid of that which doesn’t serve your company.
• Find clients in these resilient sectors: energy, “green,” hotel/motel, water, healthcare, funeral services, alcohol, security, legal services, food distribution, water purification/distribution, electricity, natural gas distribution, education (community colleges in particular), pet products, and leisure.
• Look for clients or ways to sell your product in western Canada, Brazil, and Australia. These countries are positioned for strong future growth. Russia and China are not positioned for near-term growth.
• Review your competitive advantage. Define it and tout it.
• Lead with optimism. Be the chief cheerleader.
• Communicate your company’s future clearly.
• Exercise your courage, don’t just maintain the status quo. Take risks and be courageous.
• Celebrate victories, even small ones, with your people. Treat your best employees well or they will defect during the recovery.
• Monitor your cash position religiously and take all necessary actions to maintain a positive cash flow.
• Learn to compute your company’s “12/12 rate of change” so you can project where your revenues are going
There’s no huge stock market rebound on the other side of this downturn, only a long, slow climb out.
• People in their 20s and 30s should continue to put money in the market as it will have an eventual payoff.
• People within 10 years of retirement should go for safe fixed asset investments.
• Rather than buying broad-based mutual and index funds, focus on specific sectors such as alternative energy and healthcare, or companies you’re willing to invest in for the long term.
• In the post-2010 world, avoid bond funds as they will be under long-term negative pressure.
There is more negative housing activity to come, says Beaulieu.
• Housing prices will continue to decline, reaching a bottom around March 2010.
• Even though housing prices have a little more to fall, now through the end of 2009 is a once-in-a-lifetime opportunity to buy a house. Rarely do low interest rates align with low prices and the promise of a modest recovery two years off. There will not be a better time to buy real estate in our lives. Look for areas with strong demographics suited to an aging population.
• Home prices will begin to rise slightly in late 2010.
• Canada, Australia, and Brazil are best positioned for growth for years to come.
• China is no longer the low-cost manufacturer that it has been for the past decade. Factories are shutting down or moving to nearby countries with lower labor costs. Look for increased civil unrest and a long recession in China.
As a final thought Beaulieu reminds us: “It took only two years to crumble to where we are today, but it will take us many more years to get back to that peak. It was a bubble and you don’t recreate a bubble quickly, nor do we want to.”
What question do you have for me right away?
Look for preparation, substantial questions, focus, poise, and the ability to think on ones feet. This question allows you to show you’re wanting to have a dialogue.
What would really surprise me about you? What else?
This question allows candidates to reveal a different side of themselves. Look for confidence, willingness and candor. The second question (“What else?”) gives the candidate another chance to reveal more if they gave a conservative first response.
What’s your real motivation to change jobs? No, the real reason?
Look for motives other than money--money is rarely the real reason. See if the candidate places blame; is seeking asylum elsewhere; can’t handle the pressure, the boss or the pace. These are signs of immaturity, poor-decision making skills or lack of true selling ability. Ask the question to check to see if you’re hearing the whole story.
What’s your philosophy on goal setting?
The more detailed answer you get, the more you’ll see if the candidate values setting and achieving goals. Ask for examples of goals they have set and how they measured them. A blend of intrinsic and extrinsic goals will show emotional balance and another sign of maturity in prioritizing ability.
What reading material would I find on your coffee table, nightstand or kitchen table?
The answer to this question will show intellect, curiosity, variety of interests, breath of life experience, dedication to learning, or lack of these traits. The candidate’s response will give insights as to how well he or she follows your industry and field of work.
Tell me a story about when you were placed in an ethical dilemma and what happened?
This question reveals morals, ethics, integrity and problem-solving skills. If the candidate places blame on others, it may indicate tendencies towards poor judgment, unrealistic attitudes, non-genuine or secretive personality.
How did you earn money while in college?
This question offers a good indicator of the candidate’s entrepreneurial skills. If they ran a formal or informal business in college, they are most likely resourceful, driven, have strong social skills and street smarts. These candidates tend to be good at sales, marketing, customer service or other roles that require proactive behaviors.
How far away from home have you traveled? (Have a map on your desk.)
Allows for storytelling with better visuals and allows person to share travels and gives you insights into drive, personal interests and how well they communicate outside of business issues. Can show more about risk-taking, social and cultural differences and ability to travel safely and effectively for work.
Draw me a pie chart showing how you spend an eight-hour day.
Watch for organization, clear communications and accurate calculations. Their response shows you their presentation and communication skills. Are those skills in line with what you need?
Are you a curious person, and if so, show me an example?
The example they give shows you how well they can communicate, persuade, sell, entertain or motivate others. Also, is their curiosity connected to their drive and need to win or to something else?
What’s your favorite success story and failure story?
A person willing to share failures tends to be self-confident, mature and has a sense of true self and place in the world. In success stories, look for credit given to team effort and personal drive in relation to goal setting. Bragging of solo efforts may suggest arrogance, inflated sense of self, lack of self-confidence or lack of interest in being a team player.
What should I have asked you that I haven’t?
This question allows the candidate to respond by closing and asking for the job or to address hidden concerns of their ability to do the job.
Do you want to be a millionaire? Why? What are you doing to prepare for it?
Look for an overall balanced approach to wealth and lifestyle choice and for consistency relative to other questions around goal setting. Does the candidate have a valid, compelling motive for a yes or no to wealth accumulation?
Are you ready to resign from your job in five days? What will your firm do when you quit? What will they say about you after you have left the company?
The answers here show the seriousness and commitment of the candidate. A person committed to changing jobs will not hesitate when asked if they’re ready to resign. If the candidate presents a counteroffer, tell him/her that you do not believe in the success of counteroffers and that you will not negotiate against a counteroffer.
Have you ever created a 30, 60, 90-day strategic plan?
If the candidate has created strategic plans, how many months were they required to plan out into the future? Is this commensurate with the requirements of position you’re offering? Ask about a specific plan and watch for ability to articulate and define time frames and goals. Many people can speak about planning, so ask candidate to illustrate the plan using visual aids, graphs, charts, etc.
Vistage speaker and member Russ Riendeau , PhD has been in the executive search business since 1985. He is Senior Partner of The East Wing Search Group. He’s also the co-author of a new book, “The CEO’s Guide to Talent Acquisition.” He can be reached at www.eastwingsearchgroup.com, or 847-381-0977
How can you make every meeting a productive use of time that moves your organization closer to its goals? The key is to require that every participant--from meeting manager to each attendee--to accept 100 percent responsibility for the results of the meeting.
Meeting participants often feel they’re only a silent participant with little control over the meeting’s agenda and flow. This attitude changes dramatically when each participant is responsible for the two major components of a quality meeting--courageous participation and time management.
Courageous participation pays off
Recently I worked with a company where the research director chose not to speak up in meetings. When I asked her why, she said: “I’m not going to compete with all the sales and marketing people who talk all the time to impress people. I’ve been brought up to believe that ‘self-praise stinks.’ I don’t have to impress anyone. Executives will call on me if they want information.”
I suggested that she take a risk and ask at least one question in the next meeting. She did so, and it changed the focus of the meeting because it was a question no one had considered. The entire discussion shifted as a result of her question.
Using time wisely
Here are some suggested questions participants can ask to turn around an unproductive meeting:
• What is the agenda so we can plan our contributions and our time (if no agenda handed out)?
• Which objective are we discussing (if someone has sidetracked the meeting to their own agenda)?
• I am having a hard time hearing the speaker (directed at the person next to you who is in a side conversation).
• I’d like to hear what Mary has to say. We haven’t heard from her yet (if a major contributor has not yet spoken).
• It sounds like the conversation is getting personal. May we summarize each approach (if two people are raising their voices at each other)?
These statements/questions may seem risky especially if the meeting manager is a senior executive. But if an organization claims to be committed to an atmosphere of trust and respect, in which management listens and responds appropriately, executives should respect and adhere to that commitment.
Three tips for better meetings
Meetings are a waste of time when they are viewed as unnecessary—either spur of the moment, too long, or with the wrong people. Sometimes attendees lack preparation, don’t participate, or refuse accountability and the agenda is off target, hidden, or simply missing. Then unresolved issues arise, decisions aren’t made, or deadlines are missed and there is no closure or documentation of the results.
Here are three tips for making your meetings efficient and effective:
1) Assign a meeting manager
Before each meeting, a manager should be designated. This person should plan by:
• Determining what specific objective(s) should be accomplished by the end of the meeting
• Deciding what kind of meeting it will be: information sharing or decision-making
• Selecting attendees based on the need for their contributions
• Sending the agenda out in advance, with stated objectives, assignments to prepare, expected formats, and time length
• Selecting appropriate meeting room and audio/visual requirements
• Starting the meeting on time
• Sticking to the agenda so all who prepared get to contribute
2) Encourage participation
The meeting manager should encourage every voice to be heard by:
• Providing a safe, respectful environment so everyone will participate fully
• Completing objectives within the announced time frames and developing action plans
• Summarizing results and expected individual follow-up actions
The meeting manager should spend time following-up after the meeting by:
• Sending out complete minutes including assignments and expected action dates for completion
• Providing periodic monitoring of the people who are responsible for completing the action items
Before your next meeting, get proactive by using these tips. Don’t let meetings become a waste of time.
If you are in the Portland area on Wed. March 18th:
Join Guest Speaker Dr. Ron Khormaei of Logitech as he presents…
Succeeding with External Alliances: Applying Tested Tools to the New Environment
This event will provide technology managers with a fresh look at the external alliances as a tool to succeed in a
Date: April 22, 2009.
5:30 P.M. Registration table opens
5:30 - 6:00 P.M. Food and networking
6:00 – 7:30 P.M. Presentation and Q & A
Speaker: Dr. Ron Khormaei, Director of Engineering for the Audio Business
Electrical group, Logitech.
Location: 2828 SW Corbett Ave., Portland, OR 97201 SW Meade and SW Corbett
RSVP Required. Register on-line: http://www.ieee-oregon.org right sidebar under Technology Management Chapter
Contact: Chris Dennis, Registration Volunteer, 503-285-6034, firstname.lastname@example.org,
This is clearly a challenging, uncharted economic and business environment. In such an environment, successful organizations focus on their core competencies, to not only survive, but to emerge as even stronger players in the market. This success requires improving and fine-tuning existing tools.
Outsourcing and establishing effective partnerships are such critical tools when used with offshoring, but now can be applied effectively to re-tool organizations big or small.
Leveraging external design and development capabilities is important to both established companies as well as the fresh start-ups during economically uncertain times. Larger operations rely more on the flexible commitments to “preserve capital,” while individual entrepreneurs rely on specific niche capabilities to adjust to the impact of wide-spread “right sizing.”
This talk will cover the elements for a successful alliance, and provide the framework for the audience to apply the concepts to their own specific circumstance. A clear definition and set of expectations for different models (like EMS, CDM, and ODM) is commonly overlooked, but forms the important foundation to a strong relationship. The types of relationships, structure, subtle pitfalls, and measures of
success are discussed during this talk.
About the Speaker:
Dr. Ron Khormaei is the Director of Engineering managing the Audio Business Electrical group at Logitech. Before joining Logitech in Vancouver, WA, he was Director of Engineering at Hewlett-Packard’s OEM Printer Division managing a global engineering team of over 100 and multiple external design partners. He started his career at Planar Systems in Beaverton, Oregon, leading development of advanced displays. Since 1995, he has held various management roles in HP and has led technology developments resulting in over 15 products. He has a Ph.D. in Electrical Engineering in Solid State Electronics from Oregon State University, and has led multidisciplinary programs in display systems, IC and printer development areas. Dr. Khormaei has established and led multiple successful external consortiums as well as global university and industry partnerships.
The Technology management Chapter of IEEE is being sponsored by Portland State Business Accelerator. The PSBA is part of Portland State University to promote and incubate start-up technology companies in the Metro area. The PSBA primarily focuses on the industry clusters of Green Tech & Sustainability, IT & Software, and Biotech/Bioscience.
Companies locating at the PSBA gain affordable space for offices and labs and a range of support services to help speed each company's time to market. http://www.psba.pdx.edu/
When I started out in the search business, it became quickly apparent that most managers weren't great at interviewing. For one thing, I always thought my candidates were great, and they didn't
Part of this difference of opinion was due to a lack of understanding of what the real job entailed, lack of any rigorous assessment process, and a desire for many to take short cuts, waiting for the "perfect" candidate to arrive. In this case, unanimity of perceptions substituted for evidence and logic. In the bargain, many great candidates were excluded for bad reasons.
After studying the problem, I noticed that there were four basic personality styles that seemed to be at the crux of the matter and predicted exactly how the person would come to an incorrect conclusion. From this a simple DISC-like assessment was developed that described how the errors were caused and what could be done to eliminate them. This technique is pictured in the accompanying graphic and described below.
The horizontal axis represents the speed of decision making - fast and instinctive on the right, slow and deliberate on the left. Those on the right prefer to make fast decisions with limited data. Those on the left are more cautious and would rather ponder a bit, collecting as much information as possible before deciding. Plot yourself on this decision-making axis, based on your preferred mix of facts and speed.
The vertical axis represents a focus on people or results. Those who are very people-oriented are less concerned with getting things done on time and on budget. They'll tend to let things slide to ensure that everyone is okay. Those who are extremely results-focused will be less concerned with the needs of the people involved. They'll tend to push for results, even if it upsets some of those involved. Plot yourself on this vertical axis based on whether your emphasis is on people or their performance.
Based on where you've plotted yourself on these two dimensions, you fall clearly into one of the four style quadrants, or more in the middle - the coaching style. Following is a quick summary of these styles and how they affect a person's decision-making process when interviewing and evaluating candidates:
Director Style. These people are the hard-chargers, dominant, and fast-paced. They are less sensitive to the needs of others, with delivering results as their high number one priority. During the interview they over-value their intuition and tend to like people who are assertive, strong communicators, and those who seem to have high potential based on a strong intellect. They'll assess the person's achievements at a high level, but won't spend too much time digging into the person's background to validate their quickly-drawn conclusions. While they hire a lot of hard-charging smart people, many of them aren't great at managing people or delivering results on a consistent basis.
Analytical Style. This group is comprised largely of technical people - detail-oriented, cautious, methodical, and conservative in their decision making. They tend to over-emphasize technical competency and experience when assessing candidates. Their conservative nature protects them from hiring technically weak people, but they overlook the person's potential, ability to collaborate with others, and how they plan and organize their work properly.
Diplomat Style. This group is HR-centric - those who proudly profess to be people-persons. They believe their role during the interview is to judge "fit" and the so-called "soft skills." They emphasize team skills, personal likeability, and look for clues as to whether the person has the flexibility to meet the cultural norms of the company. Unless the person is the hiring manager, their vote is often less valued, since it's based more on feelings, rather than objective evidence regarding team skills. The people they hire get along with everyone, collaborate well, and don't upset the apple cart, but sometimes don't get much done.
Influencer Style. This is the classic sales personality or politico type. This is the group that makes instant judgments in a few minutes based on first impressions. If the candidate looks good, sounds good, is confident and reasonably competent, it's a sure-fire hire. On the other hand, if the candidate is a bit nervous, less than ideally groomed, late, or is slightly maladroit or geeky, it's into the reject pile faster than greased lightning. While the people these types of managers hire are fun at parties, their on-the-job performance is problematic, since the initial hiring decision making was more superficial than substantive.
Coaching Style. This is the person who's pretty much in the middle on both axes. This is also the ideal interviewing style using rational thought, objectivity, and evidence to make the hiring decision. When evaluating candidates, a coaching style manager considers results, past performance, technical competency, team skills, leadership ability, and decision making in proper balance based on the real requirements of the job. The person will objectively consider their first impression, but not be unduly affected by it early on.
Adopting a coaching style, even if temporary, is one way to increase assessment accuracy. The key to achieving this is to overcome your natural style by adopting the best traits of everyone else, especially your polar or diagonal opposite. Here's some specific advice on how to do this:
Directors Becoming Diplomats. You need to slow down, get more facts and details, and focus on the process of achieving results, with special emphasis on collaborating with others. This includes developing and supporting team members, working with other departments, and understanding how the person handles conflict.
Analyticals Becoming Influencers. Speed up your decision making and broaden your selection criteria. Focus more on what a person has accomplished with their technical skills, rather than the absolute level. Consider how the person manages, plans, and organizes work, and whether it gets done consistently on time. Dig deep into team skills, especially how the person collaborates on cross-functional projects.
Diplomats Becoming Directors. Don't worry so much about team skills and personality fit, but rather how the person used these skills to get results. Draw org charts, get names, find out how the person developed others, who was mentored and how, and if the candidate was mentored. Get facts, dates, and specific examples to demonstrate conclusively that the person is a leader and strong collaborator. Be sure to find out the type of work the person has excelled at and what motivated the person to perform at peak levels.
Influencers Becoming Analyticals. This will be very hard for you, but you must delay any yes/no decision for at least 30 minutes. In fact, be sure to measure first impression at the end of the interview. To do this, have a list of prepared questions focusing mainly on performance and results. (Try these to get started.) Go slow and dig deep, step by step, so you understand exactly how the person accomplished the results and how the person made their biggest decisions. This will give you the evidence you need to make an accurate assessment. You'll probably discover that many of the people with great first impressions were marginal performers and some of those with average first impressions are pretty good. You might even hire some.
Of course, making this personality shift is easier said than done. As a recruiter, I had to forcefully intervene to pull most of this off. Here are some of the ideas to help you here:
1. Lead panel interviews with clients. Panel interviews help since the personality of the individual interviewers is defused. A competent leader can also control the types of questions being asked to ensure that everyone on the team obtains the information they need to make an accurate assessment.
2. Train managers to dig deep into accomplishments. This is how the two-question performance-based interview was developed. The questions are based on digging deep into the candidate's accomplishment most directly related to real job needs. This simple tool gives managers something other than intuition to make their assessments.
3. Stop using a yes/no voting system and implement an evidence-based decision-making process instead. Adding up a bunch of yes/no votes accentuates the personality style problem. To minimize this, considering using our evidence-based assessment process based on the 10-Factor Candidate Assessment template. Narrowing each interviewer's focus and requiring that specific evidence by justified and shared, forces the person to adopt a balanced interviewing style.
Of course, there's a bit more to making accurate, better hiring decisions than what's described here. But from what I've seen, if you can't overcome the interviewer's natural error-inducing personality style from the get-go, nothing else will help much.
By Lou Adler, March 4, 2009
By Moira Herbst
As the unemployment rate in the U.S. rises, the federal government is tightening its oversight of a controversial visa program that allows companies to bring in skilled workers from overseas. The crackdown is aimed at reducing alleged abuses of what are known as H-1B visas, but it may also make it more difficult for U.S. companies to hire talented workers from abroad. Tech giants such as Microsoft (MSFT), Oracle (ORCL), and IBM (IBM) have been active participants in the program and have lobbied for its expansion.
The H-1B visa program was originally designed to let American companies fill high-skill positions for which no local workers were available. But critics say the program has had such lax oversight that it has been open to abuse and fraud. In several cases, companies have been charged with underpaying workers they bring to the U.S. In addition, outsourcing firms have become some of the heaviest users of the program, raising concerns that visas are being used to train foreign workers who end up taking American jobs. Late last month the government disclosed that the top four recipients of the work visas in 2008 were all Indian outsourcers—Infosys Technologies (INFY), Wipro (WIT), Satyam (SAY), and Tata Consultancy (TCS.BO). The companies use the visas to bring employees from abroad to work in their U.S. operations, typically for two or three years.
Increased oversight of the program is likely to come on several fronts. The Labor Dept. is tightening its review of applications for the work visas, having staffers process requests manually for the first time. Meanwhile, U.S. Citizenship & Immigration Services (USCIS) is more actively investigating companies that receive the visas for potential misuse. Last month, USCIS and the U.S. Attorney's office in Iowa cooperated on a six-state raid of companies allegedly abusing the program. Matthew Whitaker, U.S. Attorney for the Southern District of Iowa, says the resulting 10-count indictment against a New Jersey-based company called Vision Systems Group is just "the tip of the iceberg." Vision Systems did not return calls seeking comment.
Congress Could Act
Senators Charles Grassley (R-Iowa) and Richard Durbin (D-Ill.), two of the program's vocal critics, are pressing for legislative reform as well. They plan to introduce legislation by early April that would require employers to pledge they had attempted to hire American workers before applying for H-1B visas—a step not required under current law. "I want to make sure that every employer searches to make sure there is no American available to do the job," says Grassley.
American tech companies are wary of any reforms. Microsoft, the top U.S. recipient of H-1Bs in 2008, says the Durbin-Grassley plan risks making it more difficult to recruit talented workers to the U.S. and more likely companies will hire abroad. The company says expansion of the program will bring in skilled immigrants who will help the U.S. economy recover. Still, Microsoft says it supports government efforts to crack down on companies misusing the existing program and has met with USCIS to help develop methods to detect fraud. "We are supportive of steps to reform the H-1B visa system to eliminate the potential for abuse," says Microsoft General Counsel Brad Smith.
The government will begin accepting applications for this year's H-1Bs on Apr. 1. In recent years, the 65,000 visas permitted annually have been scooped up in days. Robert Hoffman, spokesman for the tech lobbying group Compete America, says it's important the government not clamp down too much because skilled workers will be needed in green tech, health care, and other sectors that are targeted for expansion in the stimulus plan. "We're trying to create industries where none exist," he says. "That may create an added need for workers."
Herbst is a reporter for BusinessWeek in New York.