Posts from — October 2008

Wall Street Online (through Yahoo!) is reporting that the stock market has had a major affect on the main compensation method in many industries: incentives. Unless the market increases substantially, with the DJI running back up towards 12 000 or 13 000, the options that were granted for the last five years are not worth what they were optioned at, according to the article.

Sure, major CEOs are being hit with some shorts that went bad on them, having to liquidate a lot of their multimillion-dollar compensation packages to pay off calls.

Lower-level employees are also being hit. The software industry pays a great deal in various incentives rather than straight pay, which is actually kind of lousy in many companies. Their incentives over the last five years have become boat anchors, often worth less than they were “purchased” at.

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The New York Times has a business article on networking in your job hunt. It’s a pretty decent article. I’m no networking maven but I regularly get things from folks in my network. There’s nothing stunning in the article’s advice, but it is worth looking at because you can forget this in your discouragement.

Some of it’s best advice is “do not set yourself up to fail.” I’ll come back to that point in this week’s newsletter article but the points the article covers are good ones: don’t overreach your network, don’t think you are going to start cold-calling when you have never done it, etc.

Of course, going bankrupt in a the West’s recessionary economy — today’s uptick notwithstanding — is a powerful motivator.

Here’s two other pieces of advice that I’ve actually seen work:
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We’ve already looked at the American stock market activity from 1928-1942, bookending the collapse and America’s entry into the war at Pearl Harbor in Dec. 1941. Today I’ll look at Europe and the rise of despots, which is currently happening again.

I am speculating on what is likely to happen. That means that I am doing no more than making a guess. These guesses will focus on what you might need to do for your career. I’m not an expert in some of the topics I am discussing. Correct me where I have facts wrong.

What else happened during that time? There were wars and rumours of wars. New powers increased their scope by further wars. Machiavellian politicians rose in several nations and consolidated power. The nations who did well were militaristic and expansionistic.

Why did wars increase even though there was less money around? Partly because the offshore balancers chose not to get involved. But also because the decline of the markets shifted the balance of power. When a nation experiences an economic collapse, it is less able to field an army. This thinking may have led the Japanese to believe that they could force a settlement on the Americans.

Machiavellian personalities rise up because they are always there, waiting for opportunity. Although they make up about 5% of the population, they seem to make up around 15% or more of power positions. It may be that having a Machiavellian personality is a prerequisite for success in political situations.

Machiavellians rose up during the 1920s and 1930s in almost every form of government. This includes within democracies. Many were elected, with the populace fully knowledgeable of their predispositions. People elect dictators. That seems weird to many of us in the west these days, but it’s true. Machiavellians remove the elements that will balance their power because they say that it is necessary to protect the good people or restore prosperity.
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Reuters, the global english news service, reports on this months Ig Nobel Prize awards:

the medicine prize was awarded to a team at Duke University in North Carolina who showed that high-priced placebos work better than cheap fake medicine.

It sounds stupid but it is worth remembering in this time of crisis when con-men will be selling lots of placebos: the more expensive ones are more likely to work. Since the economic collapse is currently about confidence, placebos are as likely to work as anything else.
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FastCompany.com has posted an article on how the current crisis might affect you career (seen on Yahoo! Finance). It’s a mostly useless article except for the Mitchell Feldman’s comment in the third paragraph: “the real answer is that all employees are vulnerable right now.”

Which is about like saying that they have no idea.
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I have sat on my remarks about the current financial crisis for several weeks now. I’m taking this week to address it as it pertains to your career.

I’m not an expert in some of the topics I will discuss. You need to correct me where I have facts wrong. Also, I will be speculating on what is likely to happen. That means that I am doing no more than making a guess. These guesses will focus on what you might need to do for your career.

Several of you have already contacted me. Because you have no debt and no depreciating assets, you are in a better condition than others who are held captive by their current financial position. Who knew that the years of underemployment that has prevented you from enjoying “the good life” would turn out to be useful?

Gov. Palin visiting US Airmen in Germany, July 2007

I talk a lot about judgment and one can get a good idea of someone’s current capacity (how big of a job that they can do) from an interview where they “do work”. Elliott Jaques and Kathryn Cason describe this in Human Capability. But it can’t be just any interview topic: you need to get the person talking about a topic that they have spent time thinking and learning about.

I started thinking about this when I watched the recent interview that Katie Couric, an American television news anchor, did with the US vice presidential candidate Sarah Palin, governor of the state of Alaska. (CBS has the Couric/Palin interview available online [Part 1 & Part 2].) Couric is asking probing questions to get to Gov. Palin’s opinions on economic issues. Gov. Palin seems quite flustered and doesn’t really include details.

The interview was widely held as a poor one on the part of Gov. Palin, even by Republican editorialists. (Democratic editorialists were unlikely to view the interview as a success regardless.) But you can’t use this interview to gauge Palin’s capacity for work because it did not engage her on issues that she work on in the past.
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