get donkey!

The Wall Street Journal has a fantastic, if troubling, look at the way a single layoff spreads its effects through the economy.  Just think, there are tens of thousands of these ripples happening every day.  Let’s hope these ripples do not turn into a tsunami.  I don’t want to spoil the article by excerpting.  It is worth reading the whole thing.

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Bruce Temkin (have I mentioned how useful his site is?) posts a link to an interview with former-McKinsey director Richard Foster (registration required). As Temkin points out, this interview is one of the best explanations of the current economic out there. The whole interview is worth reading, but here are some of the juicy points:

The granddaddy of cycles in this economy is the equity premium, which is the difference between the longer-term total returns to shareholders and the supposedly risk-free debt rate. It is the premium the equity investor gets for taking the equity risk. Looking back, we can see seven great cycles. During the boom times, when the equity premium goes way too high, everybody hocks everything to get in on the game, and this creates the conditions for a crash. When the crash occurs, the politicians come in and say it was this or that person’s fault. Then they create regulatory institutions, and virtually every one of those institutions—starting with the Federal Reserve, in 1913, as a result of the crash of 1907—has been quite productive for the nation in the longer term. This includes the formation of the Securities and Exchange Commission, in 1934; the Investment Company Act, in 1940; the beginning of the end of fixed commission rates in 1970; and the Sarbanes–Oxley Act, in the early 2000s.

So that’s where we were before the current meltdown. How did the problems occur?

Continue Reading “How we got here”

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Interesting Conversation Starter at HarvardBiz on how to
sell yourself when you job may be at risk. In this climate, everyone’s
job is. Here are the main points:

Send an e-mail to your boss praising a young employee’s work on a recent project. You’ll look like a team player – and a thoughtful manager – while drawing attention to your group’s success. It’s a nice thing to do for your direct report, too.

Ask your boss for feedback on your priorities (rather than your performance). Make a list of your key projects and goals for the next six months, and walk through the list together. Message to boss: I’m both thoughtful and action-oriented.

Find a teaching moment. Gossiping with your peers about the subprime mess doesn’t demonstrate leadership. Taking the initiative to get all the recent college hires in your department into a conference room and explain what “subprime” means does.

Get in early. Don’t work longer hours, just earlier ones. Senior people tend to be early birds – and they’ll notice if you’re there. Remember, you don’t know who’s making decisions about the names on that dreaded list.

I would add a few more manager-specific of my own:

• Take on a high-impact back-burner initiative and see it through– Maybe there is something that would help your company capture lost revenue, but with the press of daily events has been relegated to the back burner.  If you can find a way to get one of these items done it, will raise your profile and show you are adding value.

• Do not report, act –t is one thing to keep your boss in the loop of what’s going on in your team, it is another to report what you have done to “push the peanut further” before asking for your boss’s help or input.

• Communicate, communicate, and communicate some more– This is not the time to keep any news to yourself. Be up-front as early as possible if you have bad news (e.g., an angry client complaint, or an impending missed-deadline). Avoid giving your boss unwelcome surprises when it’s too late to fix them! This one should go without saying, but in scary times as these, it can be tempting to hold onto bad news as long as possible in hopes you can smooth it over. In most of these cases, bad news can morph into catastrophic news.

• Back up your team – This goes along with the article’s first point, but takes it a little further. Always sell your team’s accomplishments, but do not shift the blame back to them when things go wrong. Taking ownership of your team’s performance is a “for better or worse” deal.You can also delegate (but not “dump”) one of those back-burner items to someone on your team so they have a chance to shine as well.

• Be prepared for your one-on-ones with your boss — Another no-brainer, but it’s easy to think you have a handle on everything that’s going on and then forget to mention the big accomplishment or, worse, the early notification of bad news when the conversation starts flowing. Write your talking points down and, better-yet share them with your boss before your meeting.

Does anyone have any others?

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Fortune has a piece outlining 8 experts’ predictions about the future of the economy.  Most of these folks predicted our current predicaments.  As per usual, Nouriel Roubini brings the scary:

I hope he’s wrong, but I don’t know. The others are not much better.

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