I penned the following article in November 2008 for FM Campus. A year later, with statistics & talk about the recession being over & greenshoots at every corner, it is worth remembering that the biggest casualties have been millions of people.
I penned the following article in November 2008 for FM Campus. A year later, with statistics & talk about the recession being over & greenshoots at every corner, it is worth remembering that the biggest casualties have been millions of people, that have lost employment or can’t find a job. While the recession is technically over, in reality, it is going to affect your working life for some time to come. Minding your own career is a must in this environment.
With financial markets in freefall – bloody Mondays in equities, billion dollar rescue packages for international banks and recession bears around the corner, it has been a terrifying period in the global village. What can you learn from this meltdown about managing your career?
Subprime Crisis 101
The global financial meltdown is rooted in the US subprime crisis. In the past decade, the US property and credit market went on a rollercoaster: Borrowers (US homeowners) with less than prime credit; normally would not qualify for a mortgage so lenders (banks and other financial institutions) granted them a subprime mortgage. These loans ignored the borrower’s repayment capacity and counted on the rising property prices to facilitate refinancing the loan under normal terms. Lenders offered risky mortgage products, passed the risks in the mortgage chain through securitization practices, traded in credited derivatives and dressed up the liabilities in their books. Relaxed government policies and regulation made it easy for the parties to continue these practices.
The rollercoaster went off the tracks when the property market crashed and borrowers defaulted on their subprime loans. The supply of investor money dried up and triggered a liquidity crisis in Wall Street banks. The market defied the initial rescue package and the contagion spread to Europe.
When talk about the subprime crisis emerged in 2006/2007, highly qualified Generation Y and X’rs at US financial giants (Bear Stearns, Lehman Brothers, Freddie Mac, Fannie Mae and AGI Insurance), continued working as normal. They held onto their share options and lucrative packages. In the end, employees fared the worst: jobs axed, worthless share options and dented retirement plans. Many are selling company memorabilia and possessions on eBay to raise cash. In the year ahead, hundreds of thousands of individuals stand to lose their jobs in the US, UK and other European companies. Local examples where employees stayed until their employer went bust, albeit under different circumstances; are Fidentia, Regal Bank and Saambou.
With hindsight, it seems obvious that employees should have changed career tracks before the storm. But why didn’t they?
A New Model
In my first book, Worksucks Make Work, Work (2006), I examined the traditional model whereby you prepared for working because you expected to succeed. You concentrate on acquiring qualifications, skills and experience so that you are “work ready”. You assume that successful results, whether it is job security, satisfying work or career development, will automatically flow from the employer.
However in a turbulent world, employers are having difficulty to fulfill their side of the bargain. They have to keep up with ever faster competition, product and service overhauls and shifting customer markets. The changing business environment means greater volatility in the organisation, allocation and reward of work. The gap between what you expect and what you get from an organisation has widened in the process.
I advocated that the new model is for the individual, not the employer, to consciously make their work, work for them. You have to create, manage and change three different components in flux: Fulfilment includes purpose, passion, freedom and unleashing your potential. Fame is about public, private and professional recognition for your work and contribution to different stakeholders. Fortune covers guaranteed and variable pay together with future earning opportunities. In practice, this requires working intelligence, the process that you will use to navigate the problems on route to fulfillment, fame and fortune. Working intelligence comes from the developments in the working world, your relationship with the organisation, work-life integration and understanding your human capital/returns.
If you study the actions of CEO’s and executives at these fallen companies, there is a recurring pattern of them leaving with their packages intact, some having done so years ago. Employees in these companies did not mind their own careers; they blindly relied on a “reputable” brand, trusted management representations and kept their nose to the grind stone. With a bit of working intelligence, they would have noticed the cracks in the finance sector, their company and CEO movements. It would have been easier to adjust their careers (e.g. move from finance engineering to risk management) and secure high paying jobs in other companies.
By minding your own career and acting when necessary, you can avoid the knocks of the 21st century workplace.