Obama Administration

The Eldercare Cliff. It’s Coming. Are You Ready?

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(This post originally appeared in Forbes.com)

When I went to the polls, an issue that was barely mentioned during the campaign partially guided my vote. I favored the candidates nationally and locally whom I thought would begin to address the looming eldercare/adult caregiving cliff. Why?

Yes, jobs are very important, but increasingly people will struggle to keep a job as the demand to provide unpaid care for aging relatives (e.g. parents, aunts, uncles, friends, adult siblings) grows exponentially. Ultimately, this demand will far exceed the current level of supports in the community and the public funds available to pay for those minimal supports.

More and more individuals and employers will find they need to fill the gap financially and physically, and the worst is yet to come. But we aren’t talking about it. At least not yet; however, that’s going to have change.

What does eldercare/adult caregiving look like in action?

A couple of months ago, AARP in partnership with the Ad Council launched a three-year public service campaign to raise awareness of the tens of millions of unpaid family caregivers in the U.S. today.

When I first saw the powerful PSA, “Silent Scream” on television, it was so accurate in how it portrayed of the complicated emotions related to caring for another adult that it took my breath away. (My only wish it that they’d shown someone trying to rush out the door to work while figuring how to keep their mother safe when the caregiver doesn’t show up).

If you haven’t seen it, check it out here. It is worth three minutes.

What is the current state of eldercare/adult caregiving in the U.S.?

There are approximately 314 million people in the U.S. today. According to AARP, of that number, roughly 42 million were unpaid caregivers that provided $450 billion worth of unpaid care to adult relatives and friends in 2009. This is care that we, collectively, would have had to pay for otherwise.

In 2011, the Bureau of Labor Statistics reported that over a three-month period, 39.8 million people over the age of 15 said they provided care to someone over 65 years old because of “a condition related to aging. Of that 39.8 million:

  • • One-third cared for two or more older people
  • • 23% also cared for a minor child.
  • • 85% of caregivers and elders did not live together
  • • 56% of caregivers were women (44% men)

In other words, today about 13% of the U.S. population provides some type of unpaid family caregiving.

What is the projected future of eldercare/adult caregiving in the U.S.? (Click here for more)

Labor Day Issue: Healthcare Reform is Really About Changing Nature of Work

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(Legal challenges to healthcare reform continue and it’s now an election issue.  I watch from my book-writing cave wondering why no one is talking about the real issue…work has radically changed over the past two decades making the job-healthcare link unsustainable.  So in honor of Labor Day, here’s the post in March, 2010 I wrote during the healthcare reform process.  What do you think the answer is 18 months later?)

Last week on the eve of the Health Care Reform Summit, I wondered if the changing nature of work, the real driver underlying the need to reform our current employer-sponsored health care system, would be mentioned.  I even created a brief survey asking you to place your bets, on “How will the ‘changing nature of work’ as key health care reform driver show up in tomorrow’s summit?”  The responses were split:

  • 50% said, “It will not be mentioned at all,” and
  • 50% said, “It will be mentioned, but tangentially.”

No one picked the other option which was, “It will be front and center.”

So, who was right?  Well, after reading the complete transcript from the day provided by Kaiser Health News (via Dr. David Ballard at the American Psychological Association), both groups were correct to a degree.  The increasing flexibility in the way we work as the powerful reason “why” we need to reform our health care system did come up, but very briefly and very tangentially.

Specifically, there were SIX references that linked nature of work and coverage.  Only six, out of a six-plus hour summit.  To be fair, there was a great deal of discussion about the need for exchanges where individuals and small businesses could purchase insurance, and the requirement to extend coverage of dependent children under their parents’ policies up to 25 years old.

But there was little explanation as to “why” there were so many millions of people either on their own, working in a small business, or without insurance in their early 20’s.  Answer: the change in work which involves more flexibility in type of employment beyond the traditional 1950’s “right out of school, work full-time for a big company for life” model.

Here are the six most specific references (I am not identifying the speaker or the political affiliation, if you are interested please review the transcript):….(Click here for more)

It’s Official–U.S. Department of Labor Advocates Work Life “Fit”

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There have been many noteworthy milestones during my decade-long  Work+Life “Fit” ® campaign.  But one of the highlights happened last Thursday when U.S. Secretary of Labor Hilda Solis used the term “work+life fit” a number of times in her keynote address at the Department of Labor Women’s Bureau Conference in California.  Here’s an example:

“Employers need to know that there are tools out there…It’s a balance, having that competitive edge and work-life fit.”    Yup, (emphasis mine).

This particular forum highlighted the unique flexibility needs of low wage workers to manage their work and life.  Her use of the term is exciting because, as I’ve noted before, “fit” makes a big, meaningful difference.  The language allows us escape the innovation-killing “10 Tyrannies of Work/Life Balance,” which are:

  • Balance is always discussed in the negative-what you “don’t” have.
  • Balance keeps you focused on the problem, not the solution.
  • Balance assumes we’re all the same.
  • Balance infers that there is a “right” answer.
  • Balance leads us to judge others (and ourselves), often unfairly.
  • Balance results in unproductive guilt.
  • Balance suggests that the goal is an impossible 50-50 split between work and the other parts of your life.
  • Balance leaves no room for periods where there’s more work and less life, and vice versa.
  • Balance ignores the fact that work and life are constantly changing, and
  • Balance will never be taken seriously by corporate leaders, who only hear “work less” when you say “balance.

And embrace new possibilities because with “work+life fit” we:

  • Focus what we could have.
  • See solutions.
  • Know we’re all different.
  • Realize there’s no right answer.
  • Stop judging yourself and others, harshly.
  • Lose the guilt.
  • Embrace and plan for the ebb and flow of work and life, and
  • Increase the likelihood that corporate leaders will support the need to flexibly manage work and life better and smarter.

This is particularly important when addressing the flexibility needs of low wage workers.  Their work+life fit realities, and therefore, the solutions that will work for them and their employers are different from salaried or exempt employees.  The report that outlines those specific solutions, “Flexible Workplace Solutions for Low-Wage Hourly Workers” by Workplace Flexibility 2010 and the Institute for Workplace Innovation, will be released in March, 2011.

So welcome to the “work+life fit” club, Secretary Solis!  It’s nice to have you onboard.  After I finish this post, I’ll put a copy of my book, “Work+Life: Finding the Fit That’s Right for You (Riverhead/Penguin Group)” in the mail so you can see that indeed the tools do exist and have existed for years.  The book, which was published in 2004, outlines the steps that individuals need follow in order to meet their employers halfway and use flexibility to find a fit that’s a win-win for everyone.

Now, if we could just get the President and First Lady Michelle Obama to join in…Imagine!

Related post of highlights from Pasadena DOL conference: “Gaining a Competitive Edge in the Global Economy–Using Flexibility with Hourly Workers in Healthcare” from Corporate Voices.

For more on work+life “fit” and strategic flexibility, I invite you to also visit my FastCompany, as well as join me on Twitter @caliyost.

(Fast Company) Change the Game: Add Aging to the Parent-Centric Work+Life Debate

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The other day, as I read Sharon Meers’ (author of Getting to 50/50) clear and compelling article in The Washington Post, “How Joe Biden Can Help Working Parents,” I had two conflicting reactions:

  1. First was, “Go Sharon!” because she did a great job laying out the powerful data that support why we all benefit from helping parents manage their work and life. And she honestly addressed the common roadblocks that get in the way. But then …
  2. I thought “Are we still having this same conversation 15 years later?!” You see, I could dig back through my files and probably find a similar article making many of the same arguments from 1990.

I’m becoming more and more convinced that the power of parenthood alone to catalyze a radical change in the way business, individuals and government approach work and life is limited.

No matter how many smart people, like Meers or Vice President Biden, join in the conversation, no matter how many pieces of research objectively state the need and benefits, we just can’t seem to move the needle.

We need a game changer. We need something that breaks us out of the rut we’ve been stuck in for 20 years and takes the debate to the next level. We need an issue that drives home the reality that finding new and better work+life strategies is not optional, or a “nice thing to do in good times.”

We need … to include the aging population. Why? It’s one of the greatest challenges both those who are aging and their caregivers (and, in turn, employers) are going to face in terms of the sheer number of people affected. Turns out, I’m not the only one who feels this way. Last week in The New York Times, David Brooks ranked “the aging population” first in the list of “deep fundamental problems” we are facing as a county.

As the parent of two beautiful children and as someone who can recite the bottom line benefits of work+life strategies in her sleep, am I frustrated that the argument for supporting parents hasn’t been enough to make more meaningful change happen? Yes, very.

But I’m also a realist who knows that at the end of the day change happens when people understand the “WIFM” or what’s-in-it-for-me. Adding the challenges of an aging population to the argument expands the base of people who “get it” and who are, therefore, invested in seeking solutions.

Here are some of the reasons I believe the work+life debate will finally get teeth if we add the challenges of aging. I’d love to hear your thoughts as well: (Click here for more)

Fast Company: Why I’m (Starting) to Trust the Government’s Work+Life Bully Pulpit

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Periodically, I contextualize my opinions with “Maybe it’s my background as a banker and an MBA but…” because as much as I’m open-minded to and appreciate different perspectives, I’m still a businessperson at heart.  It’s important for me to acknowledge that fact, because it’s from this perspective that I’ve historically maintained a wary, arm’s length relationship with public policy solutions to work+life challenges.

My wariness stems from the 15 years I’ve worked with real companies, managers and employees developing and implementing work+life strategies.  I’ve learned that flexibility in how, when and where work is done and life is managed is the flagship solution that everyone needs.  It’s part of and enabled by a package of other direct supports such as paid time off, leaves, dependent care, etc .  This experience has shown me, time and again, that the best work+life strategies have the following characteristics:

  • They are NOT one-size-fits-all. They are tailored to the unique realities of the business and the people who work there.  Those (sometimes tough) business realities must be acknowledged for the solutions proposed to have credibility and staying power.
  • They are process, not policy-based which makes them flexible enough to adapt and evolve with the changing realities of the business and the people who work there.
  • They are built on a strong employee-employer partnership, not from the top-down. The employer/manager creates the space within which innovative work+life solutions are crafted as part of the day-to-day operating model.  And employees are prepared and know what they need to do to meet the company halfway.
  • They achieve both business and personal work+life fit objectives. The employer understands how to apply the same flexibility that helps individual employees manage their work+life fit to achieve other business objectives such as resource cost management (eg. labor, real estate, technology, and health care), global client service, sustainability, disaster preparedness, working better and smarter, etc.

For quite some time, these characteristics of success struck me as antithetical to mandate-based approach of public policy. Therefore, I tended not to look to the public sector for the leadership to promote and advance truly effective work+life strategies.  That is until the Obama candidacy and then presidency.

Listening to the administration’s statements and watching its actions, I began to think maybe the public sector could provide that extra “oomph” of support to move the work+life agenda forward.  They seemed interested in building upon the success within the private sector, while creating a legislative environment that reflects the reality of a 21st Century global economy.

To date, my new found faith has been consistently rewarded…(Click here for more)

Fast Company: Post-White House Forum: Where Does Flexibility Go From Here…

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There’s no doubt in my mind that the universe has a sense of humor.  A couple of months ago, I solemnly swore that I would 100% disconnect from work when we went on vacation during my children’s Spring Break.  No email (if at all possible), no twitter, no blogging—nothing but focused time with my family.

Then, as if to test the limits of my resolve, The White House Forum on Workplace Flexibility was scheduled smack dab in the middle of my vacation last week!   Let’s just say that last Wednesday, it was all I could do not to sneak a glimpse at the live feed on The White House website.  But I resisted and am now catching up on all that transpired at this remarkable event.

I’ve read the Council of Economic Advisers “Work-Life Balance and the Economics of Workplace Flexibility” report as well as a number of blog posts about the forum written by participants, many of whom are colleagues I greatly admire.  Here are links to some of my favorites:

My takeaways are as follows…

Thank you to the First Family and The White House for an important symbolic boost for flexibility. I agree with Wharton’s Stew Friedman when he says this is a, “Symbolic moment that signified, at last, a new era in which we are really talking and thinking differently about work and the relationship with the rest of our lives.”  Symbolism is a powerful driver of any broad change initiative.  And it spoke volumes to have the leader of the free world stand up, with his professional wife, in The White House and say, “this is important.”

Job well done, my esteemed work+life industry colleagues.  Job well done. Unless you’ve been in the work+life field from more than a decade, and had an opportunity to meet and talk with some of the pioneers who started this movement from scratch, you might not appreciate what a full circle moment this event was for many of the participants in the Forum.  Trust me, none of them would have imagined that someday they would be at The White House.  But everyday, day-in-and-day-out they forged ahead.  Let me take this opportunity to applaud them all and to acknowledge how very much they all deserve this victory.

Now, where do we go from here with flexibility? No doubt the White House Forum on Workplace Flexibility was a mountain top moment that deserves one more, “Hooray!” and a little victory dance.  But everyone will agree that there’s still a great deal of work to do before flexibility in how, when and where work is done and life is managed is an integral part of every business’ operating model, and every employee’s day-to-day reality. Here are some next steps that I’d like to see: (Click here for more)

(@fastcompany) Taking Bets: Will Real Reason for Health Care Reform–Uncoupling Work and Coverage–Come Up at Tomorrow’s Summit? (Poll)

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Leading up to tomorrow’s Health Care Summit, I’ve been trying to follow each political party’s public positioning as to why their approach is preferable.

You hear a lot about the current health care reality:

  • 40+ million people uninsured, and growing.
  • Unaffordable premiums.
  • Inability to get coverage for pre-existing conditions.

You’re also presented with two very different solutions, one is more government regulated and the other driven more by the private market.  But, what you don’t hear is “why?”  Why do we need to undertake this massive, structural reordering of a system that’s worked and continues to work for many for decades?

The reason is simple and powerful:  We must uncouple work and health care coverage, because the nature of “work” has radically changed over the last decade. And, since the recession began two years ago, the shift in what it means to “work” has accelerated even more rapidly.  And it’s never going back to the way it was.

That fact needs to be much more front and center in the debate than it has been.  Basically, it’s missing.   For example, in this morning’s New York Times there’s a two page spread of articles discussing tomorrow’s Health Care Summit.  Guess how many times the changing nature of work is explicitly mentioned as one of the key drivers behind the need for reform?  Zero.

It’s not the 1950’s. You don’t get a job with General Motors at 18 years old, keep it for 40 years, and retire with a pension and company provided health care benefits.  But, listening to the politicians from both parties I seriously wonder if they get it.  Do they understand that in today’s economic reality an individual will have any combination of full-time, part-time, contract-based, entrepreneurial employment over the course of a career?  In only one of those four scenarios is there a chance for employer-sponsored health care.  One.  And increasingly having a full-time job doesn’t guarantee  coverage.

Imagine how different the conversation might be…if President Obama kicked off tomorrow’s summit by saying, “We remember a day when we could rely on our job to provide most of us with good, fair coverage for a lifetime.  That day has passed.  We live in a new global economic reality in which most of us will find ourselves, either voluntarily or involuntarily, in a position where affordable employer-sponsored care is not an option.   We must adapt our system to this new existence.”  With that fact as the back drop, it’s much harder to defend the status quo of an antiquated system.

Over the past couple of months, my readers have commented thoughtfully on the need to reform health care primarily due to the changing nature of work: (Click here for more–read comments, and take poll!)

White House May Not Be “Family Friendly,” But It Is Work+Life Fit Aware

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You could read the recent New York Times article,“’Family Friendly’ White House Is Less So for Aides,” one of two ways.  As a commentary on the disconnect between what the Obamas say about managing work and life in the White House and what is actually happening.  Or, and perhaps more accurately, as an innovative case study on the possibilities and limits of flexibly managing your work+life fit in a high-pressure organization.  Here’s what I think the article has to tell all of us:

Our language needs to catch up with our present-day work+life reality if we are to avoid misunderstandings. Part of the problem with the Obama Administration’s efforts is the language they are using.  “Family friendly,” and “balance” are outdated terms that aren’t used by most work life experts because we’ve learned that they don’t accurately describe reality.  Think about it, what exactly does “family-friendly” mean?  Does it mean mothers, or all parents?  Does it include people with eldercare responsibilities?  And what about people who consider their pets to be members of their family?  And what exactly does “friendly” look like?  What looks friendly to me might look very unfriendly to you.

It is much clearer to talk about a flexible work environment that allows people to manage their work and life in a way that meets their needs as well as the needs of the business.  Notice I didn’t say “balance.”  There is no balance, especially not in a global, 24/7 organization like the White House that’s dealing with a major recession and two wars.   So instead of saying the White House is “family-friendly,” President and Mrs. Obama could say, “we support giving people the flexibility they need to manage their important jobs with their responsibilities at home in the context of what it means to work in the White House.”

A leader can set the tone, but he or she can’t give us the answer because our realities are completely different. Kudos to the Obamas for setting the cultural tone related to work+life issues.  They freely talk about how they try to manage their work+life fit, which makes it okay for us all to discuss.  They encourage the use of laptops to support flexibility (only for parents so far, however, I would advise expanding to everyone as soon as possible), and they walk the talk in a way that works for them.  Unlike other aides and staff members, President Obama works from home when he is in the country which does allow him greater, spontaneous access to his family.

While others are still trying to figure out their fit, they report a number of “small wins” such as accompanying a daughter on a field trip, or seeing soccer games.  If I could give them all expert advice, it would be to keep focusing on those small, flexible, day-to-day victories.  They make a huge difference.

Some are making adjustments to accommodate realities of their high-powered jobs that can’t be changed.  In-laws and spouses are taking on more.  Additional support is being hired.  Babysitters are bringing babies to work for a visit.  It might not sound appealing to everyone, but all that matters is it works for them.

Admittedly, there are those that still have a way to go in terms of finding their White House work+life fit.  Nighttime school visits and sightseeing aren’t going to work long-term.  But, it’s only been seven months, so testing the waters is to be expected; however…

This is a big job with long hours and sometimes it isn’t going to work for everyone. As the article noted, these are “prestigious posts that offer a chance to make an impact and unparalleled access to the President at time of recession and war.”   And the work is never, ever going to be done.

These are smart people.  They knew what they were getting into. The United States Government is a global, always on, always changing entity that’s currently guiding a country under great stress. Not surprisingly, a couple of staff members have already decided that it wasn’t going to work and have resigned.  Maybe they have a child or parent with an unexpected special need.  Maybe their partner got a new job.  Or, maybe it just wasn’t what they wanted after all.  They tried and realized it wasn’t for them, which shouldn’t be an indictment of the entire effort.

While it might not be everyone’s definition of “family-friendly,” there’s no doubt that this White House is much more work+life fit aware and supportive than previous administrations.  Is it perfect?  No.  Will they need to keep innovating?  Of course.  A year ago, would we have seen so many male senior administration officials talking openly about their work+life fit challenges?  I don’t think so.  That’s progress to celebrate.

The Administration is trying to create a culture that gives everyone as much flexibility as possible to manage their fit.  But in the end, they all still work for the White House.  And for some, that’s a fit that’s just not going to work.

What do you think?  Do you feel the White House work-life efforts are hypocritical, or do you see them as helping us all make the flexible management of our individual work+life fit part of the day-to-day operating model?

Grey’s Anatomy’s Dr. Bailey Pulls into the “Slower Lane,” (and I missed Michelle Obama)

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One of the keys to actively managing your work+life fit is flexibly redefining success.  Think of your work+life fit as a highway.  Too many of us see only the fast lane or a stop at the side of the road.  But the truth is there are three options—a fast lane, stop at the side of the road, and a “slower” lane.  The countless work+life fit possibilities involve moving back and forth across all lanes over the course of a flexible career between the fast lane and the slower lane, and sometimes pulling off the road for awhile.  We all know about the fast track, and about taking a break.  But we don’t hear much about what it means to move into the slower lane.  What does it look like?  How do you do it?

Notice I didn’t say “slow” lane, because no self-respecting high-achiever ever wants to admit to being in the slow lane.  But the slower lane…perhaps.   In theory, it may not sound bad at all, until you look back over into the fast lane.  What’s happening?  Someone is passing you by.  That can be very difficult.  But sometimes we have no choice.

The all or nothing, all work or no work, fast lane/stop at the side of the road mentality doesn’t reflect today’s work+life fit reality especially in this economy.  As we found in the 2009 Work+Life Fit Reality Check, a majority said they are less likely to leave the workforce to care for children or aging parents, and a majority now plan to do some type of paid work in retirement.  Taken together, we have to honestly examine what a shift into the “slower” lane involves, since it will mean something different for each of us.

Grey’s Anatomy’s Dr. Miranda Bailey Painfully Redefines Success…

The season finale of Grey’s Anatomy unexpectedly granted my wish for more examples of shifts into the slower lane.  Chief Resident, Dr. Miranda Bailey made the painful move out of the fast lane by turning down a prestigious fellowship for the less demanding position of general surgeon.  This well written and acted episode accurately depicted the conflicting considerations and emotions behind her decision.

For those of you who are not Grey’s Anatomy fans, here’s Dr. Bailey’s backstory:  Season after season, Dr. Bailey continued her determined ascent up the ladder.  She overcame professional setbacks, even if that meant periodically showing up at the hospital with her young son, William, in tow.  Although her marriage to her husband Tucker struggled, it had seemed to be back on track.

As Chief Resident, she had to choose an area of specialization.  While she liked general surgery, midway through the season it seemed she’d found her true passion as a pediatric surgeon.  She began to pursue a prestigious fellowship for two additional years of training, which would keep her in the fast lane.

But when Dr. Bailey receives the news she’d won the fellowship, she goes to the hospital’s Chief of Staff, Dr. Richard Webber. She asks him if there is still an opening for her as a general surgeon.  He says there is but admits he’s confused.  He’d supported her for the fellowship because he thought it was what she wanted, and with that she confesses, “It is, but Tucker said if I took the fellowship our marriage was over.  I need the consistency of a general surgeon’s schedule to be home at night as much as possible.”  She goes on to say that she’s decided to leave her husband anyway because that’s no way to have a marriage, and she catches her breath as she concludes, “I am now a single mother, and need to be home for my son…”

And then there’s the reaction of Dr. Arizona Robbins, the doctor who sponsored her, “You don’t turn down a fellowship like this!” Her response symbolizes the toughest part of pulling into the slower lane–the outside voices telling you what you “should,” “ought,” and “can’t” do.

So how does being a general surgeon put you in the slower lane?”  For Dr. Bailey, turning down that fellowship meant she had to redefine success.  She settled for a position she enjoys and will give her the work+life fit she needs right now, but it isn’t her passion and doesn’t have the same prestige.   To her mind and perhaps in the minds of her colleagues, Miranda Bailey is in the slower lane.

How I missed seeing Michelle Obama speak….

Actively managing your work+life fit and consciously redefining success doesn’t just happen at major life reset points, like a divorce or potential promotion.  It’s something we do on a daily basis, and it never gets easier…even for me.

The last three weeks my schedule has included more than the usual amount of travel (thus, the light blogging).  When I committed to the opportunities that took me to Boston, Chicago and then Lexington, Kentucky I knew there would be very little room for any last minute additions to my work+life fit—personal or professional.  Then I got an invitation to attend the Corporate Voices for Working Families conference in Washington DC.

The conference sounded wonderful, and I knew many of my favorite work+life industry colleagues would be there.  But looking at my calendar I saw that if I attended the conference I would have to fly from Chicago to Washington and be away for the last two days of my older daughter’s statewide standardized tests.  Because these tests partially influence her placement in Junior High School next year, she was more nervous than usual.  So I declined the conference invitation in order to be home.

I was disappointed, but happy with my decision, until the first day of the conference when I received an email from one of the attendees telling me about Michelle Obama’s fabulous speech! Michelle Obama?! Yes, Michelle Obama delivered an unannounced speech at the conference that I had consciously chosen not to attend!  (Click here to read the post by Ellen Galinsky of Families and Work Institute about her meeting with the First Lady).

I spent the rest of the day reading articles and blog posts about her speech.   I found myself thinking of what it must have been like for my “fast lane” colleagues who attended the conference to hear her speak about a subject many of us have spent more than 15 years studying and promoting.   Had I missed a once in a lifetime opportunity?  What had I done?  But all of my doubts were erased when I put my daughter to bed that night and she said, “Mom thanks for being here.  It made me feel better in my tests.”  I’d said no to the conference, pulled into the slower lane, missed Michelle Obama, and made the right decision.

Maybe I’ll see Michelle Obama another time, and maybe Dr. Miranda Bailey will get that fellowship in a couple of years.  But we both actively managed our work+life fit and redefined success in a way that worked best for us, for our jobs and our personal realities at a given point in time.  There’s no right answer.  Today, we pulled into the “slower” lane, as we defined it.  The next time the decision may be to put our blinker on and pull back into the fast lane again.  It’s not all or nothing…as hard as that may be sometimes.

How many lanes are in your work+life fit highway?  Have you even pulled into the slower lane as you define it, either by choice or circumstance?  What did that look like and what did it involve?

Ready to Respond to Recovery? Another Advantage of Flexible Downsizing

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(Tune in to Public Radio’s The Takeaway on Monday morning 3/9 between 6:00-6:30 am in NYC, I will discuss how to present a flex plan to your emloyer if you think layoffs are coming.)

Right now, with the Dow dipping below 7,000, unemployment at 8.1%, and the news that the economy contracted a breathtaking 6.2% in the last quarter of 2008, it’s hard to imagine a recovery anywhere in sight.  But what happens if the Administration’s record $3.5 trillion budget and stimulus package have their intended impact?  Which organizations will be best positioned to respond to the opportunities when they present themselves—those that undertook massive layoffs, or those that used flexible alternatives to layoffs to reduce labor costs and minimize job cuts?  

This question isn’t rhetorical, and it is worth considering. Just as the rapid downturn took many by surprise, the opportunities of a recovery could present themselves just as unexpectedly.  In my comments in this past weekend’s New York Times article by Hannah Seligson, “An Alternative to Layoffs: The Shorter Workweek,” I pointed out that “if a steel company lays off employees and then suddenly gets money from the stimulus package and everyone is building bridges, they are going to be ill-prepared.”

Look at the mortgage industry.  My father, a former mortgage industry executive, brought this example to my attention a few weeks ago.  Last year when the sub-prime mortgage market began to unravel, the mortgage industry let most of its experienced originators and processors go. At the time it looked like an unavoidable move.  A few months later, mortgage rates were so low that companies were flooded with applications to refinance.  But without the experienced originators and processors, they had to hire third-party vendors, or in some cases miss the opportunity. 

Think about how different that scenario would be had the mortgage companies tried to reduce labor costs by instituting furloughs, or cutting salaries and schedules 25% across-the-board.  They may still have had to cut jobs.  But they would have retained some of the experienced talent the organization needed in order to benefit from the unforeseen change in the market–the key word being “unforeseen.”  The same flexibility that allows a company to reduce labor costs, also prepares them to rapidly gear back up. 

What industries might directly, or indirectly, benefit from the public works projects in the $789 billion stimulus package?  The projects include:

  • California High Speed Rail $45 billion
  • NextGen Air Traffic Control: $15 billion to $22 billion
  • California Drinking Water: Tens of billions of dollars
  • Gulf Ports: $1.04 billion for New Orleans; $1 billion for Gulfport, Miss.
  • Bridge to Canada: $1.8 billion
  • Dulles Airport Train: $5.2 billion
  • Seattle Highway Tunnel: $4.24 billion
  • Hudson Rail Tunnel: $8.75 billion (a personal favorite as it will make my commute to Manhattan from New Jersey much easier!)
  • Chicago Rail Network: $2.5 billion
  • Miami Port Tunnel: $1 billion
  • Second Avenue Subway: $4.35 billion. 

Then there are the “winners”in the Administration’s budget as noted in The Washington Post’s The Federal Eye Blog:

  • The Defense Department: $533.7 billion, a 4% increase over 2009
  • The EPA: 1,300 new water projects, and $475 million to restore the Great Lakes
  • National Infrastructure Bank—“The mission of this entity will be to not only provide direct Federal investment but also to help foster coordination through State, municipal and private co-investment in our Nation’s most challenging infrastructure needs.”

When you consider who might benefit from the investments listed above, the comments of Chris Simpson, a senior vice-president of the manufacturing company, Pella, in the Good Read blog make sense:

“Like many companies, Pella is looking to cut expenses because of the economic downturn. But instead of laying off more workers, the Iowa manufacturer of windows and doors is instituting a four-day workweek for about a third of its 3,900 employees. Chris Simpson, a senior vice-president at the company, acknowledges it’s an unconventional move. But Pella believes the economy could turn around faster than most people expect, and it doesn’t want to be caught short of experienced workers. ‘Our contention is, consumer confidence will rebound,’ says Simpson. ‘If there’s a (government) stimulus package of some kind, we think people are going to respond.’”

We—organizations and the individuals who make them run—operate in an era where rapid change is the rule, not the exception.  Just as many organizations were not flexible enough to respond rapidly to the economy’s downturn, will an equal number be unprepared to flexibly respond to the recovery?  And chances are, it will appear unannounced.