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Weathering the Stormy Economy
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Insights and guidance for executives from IT industry expert Susan Cramm
Are you sidetracked by a new recession-stoked surprise each week or are you heads down and focused on getting your next project out the door? Your answer may depend on where in the organization you work and the culture of your company. Executive coach and IT industry expert Susan Cramm gives her insight into the common pains felt by executives in the current economy and what successful companies are doing to weather it. Q: What is the general perception of the health of the economy among the executives you work with? A: I’m seeing two perspectives. Senior executives are pretty somber, while operations-level managers are more upbeat. Many executives have no previous experience with systemic change in the economy and are being very careful about the decisions they make. Farther down the food chain, people are just focused on the work. I’ve spoken with several operations-level managers who can’t stop talking about the exciting things they have to do over the next 12-18 months. In healthy company cultures, people are working together cross-functionally. In company cultures without a history of ups and downs, the resilience of the organization is being tested and outcomes aren’t all positive. People can become blame-based due to fear. Many young companies that haven’t been tested before are showing some dark underbellies — whether the issue be managing layoffs, expenses, or loss of customers. A healthy approach is to say “wait a minute, none of us is expected to have all the answers.” Rather than try to force the current situation through typical decision-making and management structures, healthy companies are approaching the situation in an all-hands-on-deck fashion. Q: What action do you believe is most needed by executives to manage effectively through this economic crisis? Fostering a sense of purpose within the organization is very important. When you have leadership responsibility, you aren’t allowed to hide in the corner. If you need to go home and be scared, irritated or angry, that’s fine. But at the office, you’re being paid to help and lead your people. You do this by putting events into context and by giving them a sense of purpose — fundamental leadership stuff. Secondly, have a sense of humanity. Be empathetic, show your character, listen to people’s hopes, dreams, and fears and help them deal with what’s going on in a human, transparent way. Q: Is the media painting an accurate picture in terms of unemployment? A: To a certain extent I think it is skewed. I read an article recently where they peeled back the onion on who is really unemployed. For people with an undergraduate degree, the rate is only 4.5%. For people with no college or high school diploma or who have been working in manufacturing, the rate is higher. The article went further to say that this second group is losing jobs for two reasons: the decline in demand for certain hard goods and services and the fact that their jobs are going global. This tells me that there’s a longer-term trend for the loss of those jobs. What’s interesting to consider is that many of these people didn’t have much discretionary income before. They are not the ones who are driving the economy and creating the situation we’re in. So the fact that they’re unemployed now doesn’t change much. It’s the “employed-but-scared” who are the reason we’re down as much as we are from a consumer spending standpoint. Everyone is cutting back, but many of those cutting back still have a job. The downside for the group with higher unemployment is that when the economy rebalances, they may not participate because their jobs have left. We may be looking at a permanent group of unemployed people that we need to figure out how to help. In terms of the media, everyone is going for eyeballs. And with the publishing industry struggling as it is, that means that headlines can start to look like tabloids. Provocative titles secure eyeballs. So it’s important to understand the details behind those statistics and claims since they tend to influence our behavior. Q: Your blog says that nothing has really changed for the average IT professional. Can you elaborate? A: Microsoft’s CIO, Tony Scott, has said that IT has been in a recession for awhile and I agree. IT had its heyday with the run-up in spending prior to the year 2000. Once that blew up, IT was stuck with legacy costs, because for every dollar invested in a new IT capability, you have to keep on spending to keep it current. Since 2000, that spending has been in decline, so IT has been focused on cost transparency, process discipline, outsourcing, and capital expenditure governance for some time now. We’ve created a core competency of being able to lay people off but we
may have eliminated some of our conscience in the process. There used to be guilt on the part of the perpetrator. That's gone now. On the flip side, we may be overly accustomed to cost-cutting and fiscal discipline. One mid-level leader I worked with had his 360 evaluation with excellent feedback from direct reports, business partners and his boss. Everyone loved this guy. Then, he lost one third of his department in a layoff. I commented how extraordinarily tough that must have been for him. He just shrugged his shoulders and said “that’s the way it is.” We’ve created a core competency of being able to lay people off but we may have eliminated some of our conscience in the process. There used to be guilt on the part of the perpetrator. That's gone now. Q: Are executives changing the way they live and work in these economic times? A: There is a great body of research on neuroscience asking the question whether people really change. We spend the majority of our waking life in a basically unconscious state where we are operating based on what we have learned in the past. For us to actually change our behavior, we have to shift into a new part of the brain, right above our pain centers, and it hurts and makes us tired to be there for very long. So when I see the articles out there about this recession causing deep change and forcing us back to the basics and a richer, deeper, life, I’m skeptical. I suppose that if this situation lasts as long as the depression there might be enough time to rewire our basal ganglia and fundamentally shift how we view consumption, quality of life and such. Otherwise this may just be a transitory blip on the screen. Unless something is sustained over a long period of time, it is not going to change behavior. That said, I do believe leaders can make change happen if they are intentional about it and strategically make decisions to carry new behaviors into the future. Q: What’s your next area of focus? A: I’m writing a book entitled “The 8 Things We Hate About IT” (subtitled: How to move beyond frustration and form a new partnership with IT) which will be released in the first quarter of next year. The target audience is operational-level business leaders who want to understand how to lead with technology. According to a survey we’re doing, many business leaders feel incompetent with leading with technology. Their counterparts in IT are doing everything they can to close that gap but are running out of tricks. There is a gap. And since it’s impossible to move the business forward without IT, we need to close that gap. The book will cover the core leadership principles of how to leverage IT as an asset, not simply an organizational structure. About Susan CrammSusan Cramm is the founder and president of Valuedance and a recognized industry expert on information technology leadership and coaching. She is the former CFO and executive vice president at Chevy’s Mexican Restaurants. Prior to Chevy’s, Cramm worked with the Taco Bell Corporation and held the positions of CIO and vice president of the Information Technology Group and Senior Director for Financial and Strategic Planning. | |||
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