Recently, both the Dow and the unemployment rate almost simultaneously broke historical milestones, one good (Dow 10,000) and one bad (unemployment 10%). The lock step ascent of these two metrics has continued since the beginning of the year:

How long can this reciprocal advance go on before it unleashes an “un”virtuous cycle of fear, decreased consumption, arrested innovation, less revenue, more cuts, more fear? A genie that, once set free, will be very hard to put back in the bottle.

Are We Falling Back on Out-dated Short-Term Strategies that Could Undermine the Fragile Recovery?

We are in the middle of the worst employment crisis in decades. Some economist are predicting that jobs won’t recover until 2013 and could climb as high as 12%-13%, and even 15%. I agree with former Secretary of Labor, Robert Reich, that “in the end, this is a self-defeating strategy.”

Early in the crisis, I started advocating a more flexible approach to cost-cutting that, wherever possible, minimizes the level of job cuts by finding alternative ways to manage labor and operating costs. A year later, a number of companies have incorporated many forms of flexibility in how, when and where work is done into their downsizing strategy.

Now they face new challenges in the gray post-recession/ pre-recovery zone. For the past three weeks, I’ve blogged about these new issues and how they can be addressed (here, here and here), but this time it’s different. There isn’t the same sense of urgency I felt at the height of the crisis around the subject of finding ways to keep as many people employed as possible.  This is unfortunate, because we are at a key point in the recovery where falling back on old, short-term ways of operating could undermine the fragile economic progress we’ve made.

But short-term thinking is deeply entrenched and rewarded by our system, so it’s not surprising that with the “crisis” over we’re falling back into old patterns. These patterns are reinforced by gatekeepers (e.g. leaders, analysts and investors) who favor quantitative metrics over qualitative “softer” levers like leadership, vision, employee engagement, discretionary effort, and innovation. Why? Drawing upon my years of experience as an analyst and as a graduate of a top MBA program, quantifiable outcomes are more easily understood, mastered and rewarded. The qualitative is tougher, and quite frankly, not well-understood or valued. Where’s the visible, predictable result? Where do “leadership” and “engagement” show up on the balance sheet or in the cash flow calculation?

It Began in Business School…

I was surprised to encounter this quant-primary focus first hand business school. After seven years of financial analysis as a banker, I went to business school to learn about the people-side of business. I naively assumed others shared my enthusiasm for the “harder” and “softer” aspects of management. I was thrilled when an Organizational Development/Leadership class was mixed in with the first year requirements of Finance, Marketing, and Cost Accounting. Let’s just say a number of my fellow classmates didn’t share my passion.

While I sat at the edge of my seat soaking in concepts of motivation, reward, and change management, others used the time to catch up on their work from other classes, read the newspaper, and good-naturedly rib me. They weren’t being disrespectful. They just didn’t think it was important. They were there to be brand managers, strategy consultants, stock analysts and investment bankers, and “HR will take care of the people stuff.”

I would politely push back, “Who do you think is going to help you execute your brand’s strategy, produce your stock analysis and close your deals? People. You have to understand how to lead and motivate them.” Response—smiles, shrugged shoulders, and a change of subject.

In fact, at one point during a case study about how to deal with striking workers, one of my classmates said at the beginning of the negotiation process, “We’re done negotiating. It’s a waste of time. Either go back to work or you’re fired.” I countered, “Okay, but how are you going to staff and train the replacement workers quickly enough to produce quality products to meet customer demand? What are you going to do to restore the lost goodwill and inspire the surviving employees to innovate, be creative, go the extra mile and dedicate themselves to making your company succeed?” Response—blank stare.

I don’t blame my classmates for their results-oriented, short-term focus. Employers weren’t looking for competencies in leadership, team development, employee engagement, vision creation, and motivation strategies. They wanted evidence of concrete results — the mastery of the Black-Scholes model, the development of a creative marketing plan, or the identification of an untapped market niche. The “soft stuff” wasn’t a part of the equation, most likely because, again, it’s too hard to measure and it takes too long to quantify.

The Aspen Institute Takes the Lead in the Shift to Long-Term Value Creation (Click here for more)

Last week we heard from Scott Jones, a senior executive who is grappling with how to respond to an uneven recovery in his business. A year ago in the heat of the economic downturn, Jones’ company used organization wide salary cuts and furloughs to reduce operating and labor costs in order to minimize layoffs.  Now as the recession sputters, and the recovery struggles to begin, the company faces hard choices.

How does he reset the organization’s flexible downsizing strategy to reflect post-recession, pre-recovery realities? What’s the best approach when the recovery isn’t strong enough to return to “business as usual,” but the support for a shared sacrifice seems to be waning?

To answer these questions, I went to two of the best change and innovation experts I know, Joanne Spigner and Donna Miller, who also happen to be my WLF consulting partners.  Here are our tips for managers to begin charting next steps:

#1: Go back and assess where you are.  Know where you stand in the business.

What do you really know about the business?  How do people really feel about the specific adjustments in salary and/or schedule that were implemented?  Is the shared sacrifice being questioned by a majority in all businesses, or is it coming from pockets of loud voices?  Get the facts on paper.  You do this by:

• Not owning and solving the issue yourself.  Expand the circle of discovery.  Bring other leaders and high potentials across the organization along for the ride.  Compare notes and problem solve together.
• Going wide and deep—Interview all business leaders, talk to a random sample of front line managers and employees, and conduct a survey.

#2: Once you have the facts on paper, reset the organization’s flexible response to match today’s realities. (Click here for more)

As follow-up to last week’s post, “One Year Later: Next Stage of Flexible Downsizing Post-Recession, Pre-Recovery,” I interviewed Scott Jones*, a senior executive at a national architecture, engineering and construction company (he asked not be identified since many of the issues we discussed are not yet public knowledge within his organization).

In the worst part of the crisis, Jones’ organization took a flexible approach to downsizing that reduced costs and minimized layoffs.  But a year later, the recovery across the firm’s businesses is uneven. And the pressure is building to restore salary and schedule concessions willingly made at the beginning of the downturn.  Here’s the story of how one company is navigating the next phase of its flexible response to the recession.

CY: Welcome. Talk more about your company’s flexible response to managing labor and operating costs since the downturn began.

SJ: When the recession began to really affect our business about a year ago, we started by cutting the pay of all of our principals.  When that wasn’t enough, we made pay cuts in specific offices and business units that were struggling the most.  Then, about eight months ago we reduced pay by an average of 5-10% firm-wide.  In slower units, the pay cuts were deeper than 10% and we instituted some temporary layoffs (or furloughs) of varying lengths, but generally more than 30 days.

When we started the process of making the cuts, we really weren’t sure how long the need for sacrifice was going to last.  But there was a real sense that we are all in this together.  Even the people within offices and business units that continued to be busy were willing to cover those that weren’t as active in order to limit our need to lay people off.

CY: What are you hearing and seeing now? (Click here for more)

A year ago, the economic downturn was in full gear.   As layoffs gained momentum, I loudly promoted a more flexible approach to downsizing as an alternative to knee jerk job cuts.  If executed correctly and strategically, compressed workweeks, telecommuting, reduced schedules, furloughs and sabbaticals improve productivity and reduce costs in numerous areas (e.g labor costs, real estate overheads, operating costs), therefore, limiting or avoiding layoffs.  Additionally, this very same flexibility simultaneously achieves other business objectives, such as disaster preparedness in response to the H1N1 virus, or expanded global client coverage to generate new business.

Over the past 12 months many people have said, “Thank you.  You made me think of other options and as a result we were more creative and flexible in how we managed through the crisis.”   But about three months ago, I noticed a shift.

With glimmers of a recovery finally on the horizon, flexible downsizing entered a new post-crisis, pre-recovery phase.  In this gray zone, a flexible approach to managing productivity and costs in all areas remains critical but involves a new set of choices:

• What about businesses that did use flexible downsizing strategies, but a year later, aren’t starting to recover and may never recover?  Are more layoffs necessary?  If yes, how do you make those cuts without undoing the benefits realized from having taken a more flexible approach in the heat of the downturn?
• How do you compensate and retain top performers who were willing to sacrifice in the thick of the crisis, but now see a recovery and want to be rewarded at pre-recession levels, even if the business hasn’t recovered and the money isn’t there?

Before we address the “how to” in this next phase, let’s take stock of where we actually are a year later: (Click here for more)

It’s been a big two weeks for the term work+life “fit,” a more flexible and expansive way to think and talk about work and life.  For over ten years, in my consulting, speeches, blogging, and book, Work+Life: Finding the Fit That’s Right for You (Riverhead, 2004), I’ve diligently explained the concept of “fit” to all who would listen.  So, imagine the sense of validation and excitement when recently:

• Families and Work Institute released The State of Health in the American Workforce report and used “work-life fit” to describe one of the primary factors that impact employee health and wellness, and ultimately, employee engagement, turnover and job satisfaction, and
• The Sloan Work and Family Research Network interviewed Phyllis Moen, one of the field’s revered academic researchers, who stated that “fit” is the way we need to think about what she calls “life course fit.”

With these two research powerhouses joining the effort to shift the way we think and talk about work and life toward “fit,” we may be approaching a critical tipping point.  To explain why this is so important, here are some key milestones, or “ah-has,” from my work with business leaders, managers and individuals that led me to understand the power behind this change in language and mindset:

Ah-Ha #1:  Business leaders can get behind work+life “fit,” whereas they glaze over when they hear “balance.” I found that whenever I explained the broad impacts of strategic work+life flexibility to a business leader, his or her eyes would physically glaze over at employee work-life balance.  Finally out of frustration, I began to ask what caused this reaction.  A few brave souls confessed, “All I hear when you say balance, is work less.  And we can’t afford to have everyone work less.”

While I knew I wasn’t saying, “Everyone will work less,” that’s what they were hearing.  So I began to consider different ways to articulate the impact of flexibility on employee work+life reality.   How could I explain that in some cases, yes, it’s about working less, but mostly it means working differently, more flexibly, smarter and better?

After numerous failed attempts, one day I heard myself say in a meeting, “It’s about helping everyone in this organization–including you—manage their unique work+life fit.  And doing it in a way that meets the needs of the individual and the business.”  Jackpot!  Instead of visibly shutting down, the business leader got it.  Not only did he get it, but he began to share what his work+life fit looked like.  And he acknowledged that indeed his work and personal realities were unique and very different from many people in his organization.  He began to see why greater flexibility in work and careers was a strategic imperative.

With the shift to “fit,” the innovation and problem-solving continue.  The conversation doesn’t shutdown.    Leaders can better understand that one of the goals of strategic work+life flexibility is for all of the different work+life “fit” realities to coexist in their organization as effectively and productively as possible in good times and bad…including their own.

Ah-Ha #2:  To most people, balance” was a deficit model, or that-thing-no-one-has.  This made it almost impossible to find solutions. Here’s a perfect illustration.  At the beginning of a speech, I asked those who had work-life balance to raise their hands.  Approximately 10% of the group held their hands up. Then I said, “Keep your hand up if you’ve maintained that balance for an extended period of time.”  About 1% of the hands remained in the air.  By the end of the speech after I’d introduced the work+life fit process, I asked “How many of you now think it’s feasible to find a better work+life fit?”  Almost every hand in the room went up.  Shifting to “fit” unearths the possibilities.

Ah-Ha #3:  If there’s no right answer then there’s no judgment, only the “fit” that meets the needs of the individual and the business.  The result is more flexible innovation that works for all parties. One of the roadblocks I consistently ran into was people thinking there was a “right way” to manage their work and life. That there was a specific answer or “balance.”  Not only did this rigid, all-or-nothing thinking limit possibilities, but it resulted in unhelpful, often harsh, judgment of themselves and others (a la, the mommy wars.)

With “fit” there is less judgment and more creative problem solving because there is no right way to do it.  Everyone’s individual work+life fit changes daily along with personal and business circumstances.  It also resets at key milestones like finding a partner, having a child, caring for a sick parent, starting a business, getting laid off, accepting a promotion and/or retiring.  I have never heard the same work+life fit reality twice.  The focus becomes how do we flexibly adjust work, life and business to find a “fit” that is mutually-beneficial to the individual and the employer.   Not who’s right, and who’s wrong.  But what works.

Those are just a few of countless “ah-has” I’ve experienced over the years that reaffirm the need to shift our language and mindset.  We need to account for the flexible, ever-changing “fit” between work and life, especially in the new work+life flex normal.  Yes, a decade later, the work+life “fit” tipping point may have arrived.    Thanks to FWI and Phyllis Moen for adding their influential voices and unique perspectives of “fit.”  What about you?

Striking out on your own, either voluntarily or involuntarily, is becoming a more common experience along an increasingly flexible career path.  And, it turns out entrepreneurship is especially appealing for members of Generation Y.   In her terrific new book, Upstarts – How Gen Y Entrepreneurs Are Rocking the World of Business and 8 Ways You Can Profit from Their Success (McGraw/Hill), Donna Fenn says we all need to pay attention,

“They were born between 1977 and 1997, and you can call them what you like; I call them entrepreneur generation.  There are approximately 77 million of them, and their sheer numbers, combined with the rate at which they’re starting businesses, will make them a force to be reckoned with…these “Upstarts” are destined to have a profound effect on the economy and specifically on the small-business landscape.”

In a recent interview, I asked Fenn to talk about some of the ways Gen Y entrepreneurs were transforming the future of work, life and career… for all of us:

CY: Welcome, Donna Fenn!  One of the reasons I love your book is that I want business leaders to expand their understanding of work+life flexibility, or flexibility in how, when and where work is done and life is managed.  Flexibility, in all of its forms, is a strategic lever that has broad application as a way to run your business.  The Gen Y entrepreneurs in your book seem to fundamentally see flexibility as a way of operating.  Here are some examples from the stories in the book:

• Cost Saving: Having all or part of your workforce work remotely to save overhead costs, such as real estate.
• Talent Resourcing: Using a combination of full-time, part-time, and “as needed” employees.
• Productivity/Engagement: Letting people flexibly manage their lives and work as long as they produce.  This boosts morale and productivity.
• Marketing/Brand Development: Devoting a certain number of hours a month to community service to promote their brand and motivate employees.

Do you think these Gen Y entrepreneurs are applying strategic work+life flexibility consciously or intuitively?  What do they “get” that many business leaders over 30 years old struggle to understand?

DF: This generation is going to have enormous impact on the future of work for all of us, as employers of their own business but also as employees.  They are hardwired for this more flexible and innovative way of operating we know is very important.

They want to work with their friends. They want to have relationships at work, and they want to play and have fun.  People might shake their heads, “What a spoiled bunch of kids,” but think about it.  What’s it like when you play games in the middle of the day?  You find out a whole lot about people that you otherwise might not know.  Like who’s trustworthy, or super competitive.   There is value to game playing and it’s a stress reliever at a time when we are working really hard.  To the older generations, there is still this dividing line, “When I am working I’m working.  When I’m playing, I’m playing.”  This generation doesn’t see it that way.

CY: From the book, it is clear that Gen Y entrepreneurs aren’t rigid about where they work. (Click here for more)

It seems my absence from the blogosphere over the past few weeks here and on my Fast Company blog has not gone unnoticed.  I am touched.  To everyone who has inquired into my whereabouts, thank you and let me explain–I was taken down by a tick.  Or rather by the Lyme disease transmitted to me by said tick.

The good news is that I am well on the road to recovery, and even relaunched my Fast Company blog, the “New Work+Life Flex Normal” this week.  But it has been an interesting, frustrating and sometimes scary experience.  Here is what I’ve learned:

1. Take Lyme disease very seriously. I didn’t.  When I was first diagnosed with the standard “bulls eye” rash earlier in the summer, I didn’t finish the four weeks of antibiotics because they upset my stomach, and  “I feel great!”  Bad, bad idea.  They aren’t sure if this was a recurrence of the initial Lyme that wasn’t fully treated or a reinfection, but horror stories I have heard since sharing my diagnosis are alarming (including this one about another tick borne illness in The New York Times).  Thankfully, I was undiagnosed for only about three weeks, but that was long enough.
2. Sometimes, you just have to say you can’t do it…and you survive. For two weeks,  I dragged myself to work thinking I had a virus that would go away eventually. It  wasn’t until I landed in the hospital three weeks ago and was given an initial diagnosis of  Lyme that I finally begrudgingly admitted I needed to take time off.I work for myself.  If I don’t work, I don’t get paid.  Not to mention the fact that I love what I do and it takes a lot to knock me out of the game.  I’m lucky that my husband has a job; therefore, my family will eat and the mortgage will be paid.  Not everyone who works for themselves has that luxury (not to mention everyone else who doesn’t get paid sick days, but that’s another post for another day.)  Still, it’s tough to cancel speeches, reschedule client meetings, pass on a great blog topic and ask your amazing, busy team to take on your work too.  But sometimes you just have to say you can’t do it…and you, or rather I, survived.
3. Thank goodness for antibiotics, Twitter and Facebook–An interesting non sequitur, but all played a role in my recovery.  I’m three weeks into another four week cycle of antibiotics and, as was the case with my earlier diagnosis, I’m feeling better.  Only this go round I’m taking every last little blue pill until all Lyme spirochetes are dead and gone.   Thank you, thank you to the smart people who discovered antibiotics.While I didn’t have the energy to blog, Twitter and Facebook let me stay somewhat connected in between naps.  I didn’t think it was possible, but I appreciate the power of social media even more than I did before.   Thank you, thank you to the smart people who thought of Twitter and Facebook.

And thanks to everyone for their understanding and good wishes.   I’m diving back into the blogsphere full speed and look forward to continuing the vibrant, important process of rethinking life, work, and business in this new work+life flex normal.  And I am forever humbled by the power of a small tick to take me down.