Is your career a liability in disguise?

By Neil Patrick

This week, the shocking revelations about Volkswagen's emission testing fraud and the consequent collapse of its share price prompted me to think about balance sheets. Not corporate ones, but career ones.

We all have a career balance sheet. Do you really know the condition of yours?

Initial estimates suggest that Volkswagen could be liable for around $18bn of fines from its emission test cheating. Investor sentiment has tanked and around $30bn was wiped off its share price value within two days of the scandal becoming public knowledge.

In an instant, Volkswagen's balance sheet has been trashed. The reputation of perhaps one of the most trusted brands in the world lies in tatters. Yet I'd argue that Volkswagen could have seen this coming, they were just not paying enough attention to things that accountants never measure or show on a balance sheet. Things like culture, values and reputation.

I know that many people glaze over when accountancy language is used, but stick with me. This post isn’t about accountancy. It’s about something much more important to most of us. Our careers.

Most of us think about our jobs and finances from a profit and loss perspective. In other words, if our income exceeds our outgoings, we feel like we are doing well. And vice versa.

We rarely think about the balance sheets of our careers. That is, our career assets and liabilities.

But for 21st century career survival, a balance sheet perspective is now vital.

So what has changed?

In short everything. What the VW story illustrates is how even the most successful organisations can group think their way into catastrophe. The financial collapse of 2008 was the same situation. The dot-com bust of 1997-2000 was too.

These collapses were all based on fundamentally flawed balance sheets. Put another way, the assets were overvalued and the liabilities were undervalued.

Individuals are no different. But employers rarely consider their employees to be true assets. The hard truth is they are viewed as a cost from which employers seek to extract the most value they can. And I am sure I am not the only one who frowns with suspicion every time I hear a CEO say ‘Our employees are our most valuable asset’.

So employers typically adopt a profit and loss perspective when they think about their people. Investments in their people assets are rarely made for the long-term benefit of the individual, they are made with a view to the short term ROI for the organisation. In other words the things which impact their profit and loss not their balance sheet.

This was more or less fine in the 20th century, when we could reasonably expect to have a long and rewarding career with perhaps just two or three employers over the course of a 40 year career. But as average job tenure continues to fall, as skills become redundant ever faster and as individuals leverage increasingly tight incomes through borrowing, the nature of critical career assets has fundamentally changed.

What is a career balance sheet?

Of course it is statement of your career assets minus your liabilities. And the remaining balance is what I call career equity.

We cannot assign strict monetary valuations to these things, so accountants will doubtless lose interest at this point. But we can weigh up the balance between our assets and liabilities. And make a fair judgement about whether they are rising or falling.

These assets and liabilities are quite different to what most people imagine

Because they think about us from a profit and loss viewpoint, our employers encourage us to do the same. This can be fatal. See where the group think risk is?

Conventional thinking dictates we think of our career assets as things like skills, qualifications, experience, salary level. But they also include our creativity, our ability to adapt, our leadership skills, our communication skills, our professional network, our reputation, the amount of goodwill our network has towards us.

There’s a ton of stuff which is immensely valuable to us individually but which our employers will view at best as of secondary importance to us getting our jobs done well.

Conventional ideas about liabilities would cite things like poor employer references, short job tenure, periods of unemployment, haphazard career moves. In the 21st century, career liabilities include student debt, health problems, limited professional networks, obsolete skills, immobility, limited digital know how.

Employers do not measure or manage these things for us

They don’t. Because they see little immediate value to themselves in them. The paradox is that getting an outstanding appraisal, being promoted, earning big bonuses actually encourages an illusionary perception that we are doing well. We might be if we take a purely profit and loss view. But if we take a balance sheet view we almost certainly are not. If all our time and energies are directed at pushing things up on our career P&L, then we are doing very little to directly invest in our career balance sheet. And that’s the bit that matters to us most. A weak balance sheet or one which measures the wrong things makes us vulnerable.

So it’s quite possible to have a booming career P&L and a weakening balance sheet. And a weak balance sheet can be fatal whether it’s an investment, a corporation or our career. And because the performance measures and rewards that employers typically use encourage more of the same behaviours, we can find ourselves sleepwalking into career balance sheet erosion or even career bankruptcy.

As long as employers persist with a short term P&L perspective on employee value, employees run the risk of their career balance sheets being weakened.

Just remember this. It’s almost guaranteed that your employer doesn’t see you as an asset (despite their nice words to the contrary). They see you as a cost.

Provided your value to them exceeds your cost, generally, they will be happy and reward you. But those rewards mostly appear on your P&L, not your balance sheet.

If you really want to grow your career balance sheet instead of your P&L, it’s time to think very differently and that's probably not in the way your employer wants.

Have you got the key skills for the information age?

By Neil Patrick

I’ve  been writing a great deal recently about the destruction of jobs by what is variously called, the third industrial revolution, knowledge economy or new machine age. This situation creates a whole new set of challenges for everyone who wants to earn a living in these tough times.

Most of us know it is happening. What's thin on the ground is information about what we can do about it.

We need new solutions and we need to take personal ownership of our own countermeasures.

This isn’t just my opinion. Multiple and diverse organisations are reporting the same thing:

Manpower states that despite the recession, 31% of employers struggle to find qualified workers because of “a talent mismatch between workers’ qualifications and the specific skill sets and combinations of skills employers want.”

The American Management Corporation says that employers want workers who can think critically, solve problems creatively, innovate, collaborate, and communicate.

The National Association of Manufacturers reports, “Today’s skill shortages are extremely broad and deep, cutting across industry sectors and impacting more than 80% of companies surveyed. This human capital performance gap threatens our nation’s ability to compete . . . [and] is emerging as our nation’s most critical business issue."

The National Academies claim that “The danger exists that Americans may not know enough about science, technology, or mathematics to contribute significantly to, or fully benefit from, the knowledge-based economy that is already taking shape around us.”

The New York Times reports that low-skilled workers are being laid off and "turned away at the factory door and increasingly joining the swelling ranks of the long-term unemployed . . .” This issue results from a disparity between the skills that workers have and those that employers need.

So what can we do about it?

If the last time you sat in a classroom was at university or an employer’s course, the chances are high that your learning skills have significantly reduced. Of course we all acquire job specific skills at work, but what we don’t generally continue to develop in our jobs are the learning skills that are now critical for 21st century career survival.

If we accept that the pace of change in the world is accelerating, then it is logical to conclude that our ability to adapt to change must also be increasingly critical. And the key enabling mechanism for coping with change is learning.

What are the key learning skills for the 21st century workplace?

21st century skills are a set of abilities that everyone needs to develop in order to succeed in the information age. The Partnership for 21st Century Skills has identified three key learning skill areas.

I call them the three Cs of thinking; critical thinking, creative thinking and collaborative thinking:

Critical Thinking

Critical thinking is the ability to think clearly and rationally. It includes the ability to engage in reflective and independent thinking. Someone with critical thinking skills is able to do the following :

 

• understand the logical connections between ideas 
• identify, construct and evaluate arguments 
• detect inconsistencies and common mistakes in reasoning 
• solve problems systematically 
• identify the relevance and importance of ideas 
• reflect on the justification of one’s own beliefs and values 

After we leave education and start to exist in the world of our jobs, our critical thinking skills may easily become rusty. Other factors start to influence and direct our thought processes. The competitive environments we often experience encourage competitive reactions – the exact opposite of one of the other Cs – collaboration.

So good critical thinking skills not only break the force field of groupthink, they also encourage collaboration.



Creative Thinking

This is the process by which individuals come up with new ideas or new approaches to business. New ideas could result in new products, procedures or policies. They could also result in a new process that cuts costs or improves quality - for example, a bagless vacuum cleaner.

Fresh ideas give businesses a competitive advantage and help make their goods or services stand out in the market place.

We can make use of several different thinking techniques to improve our creativity:

• Lateral thinking or thinking outside the box. An example of this would be breaking down the steps taken to serve coffee in a café and asking 'why' at each step to see if a better process can be created. 
• Deliberate creativity uses thinking techniques to spark off new ideas. For example, putting on different thinking hats to tackle problems from different angles. 'White-hat' thinking looks at facts and 'black-hat' thinking looks at drawbacks. 
• Blue-sky thinking involves a group of people looking at an opportunity with fresh eyes. As many ideas as possible are generated in an ideas generation session where no ideas are rejected as silly. 

Collaborative thinking

There are generally accepted to be seven rules for all collaboration:

Look for common ground: find shared values, consider shared personal experiences, pay attention to and give feedback, be yourself and expect the same of others, be willing to accept differences in perception and opinions

Learn about others: consider their perspectives and needs, appeal to the highest motives, let others express themselves freely

Critique results, not people: do not waste time on personal hostility, make other people feel good, avoid criticism and put downs

Give and get respect: show respect for others' opinions, be considerate and friendly, put yourself in the other person's shoes, be responsive to emotions, speak with confidence but remain tactful

Proceed slowly: present one idea at a time, check for understanding and acceptance of each idea before moving on to the next. Speak in an organized and logical sequence.

Be explicit and clear: share your ideas and feelings, pay attention to nonverbal communication, speak clearly and make eye contact, select words that have meaning for your listeners

Remember the five "Cs" of communication: clarity, completeness, conciseness, concreteness, and correctness

It's not a co-incidence that the social web or internet 2.0 also functions with these principles at its core.



New Skills for New Jobs

These skills have always been important for personal development, but they are now absolutely critical in our information-based economy. When most workers held jobs in industry, the key skills were knowing a trade, following directions, getting along with others, working hard, and being professional - efficient, prompt, honest, and fair.

To hold information-age jobs though, people also need to think deeply about issues, solve problems creatively, work in teams, communicate clearly in many media, learn ever-changing technologies, and deal with a flood of information. The rapid changes in our world require us to be flexible, to take the initiative and lead when necessary, and to produce something new and useful.

But these thinking skills aren’t just relevant to our careers and jobs. They play a part in making the world a better and more just place for all of us. I think there’s a good argument that the absence of these thought processes within the management of the banking world was the biggest single factor in the financial collapse of 2008. If we ever needed an example of the terrible consequences of endemic groupthink, we need look no further.

So next time you are considering what skills you could acquire to enhance your career prospects, think outside the box and think about what you can do to improve your thinking skills. Not just for yourself but the world as well.

Nine toxic behaviours that we must all keep at bay

By Neil Patrick

Many self-help books and coaches talk about the dangers of toxic people. We should distance ourselves from them they say. Better still remove them from our lives. I'm not so sure about this.

Sometimes that’s easier said than done. Just how would you go about removing a person from your life I wonder? Like your boss, or a colleague or a family member? Short of committing illegal acts, it all seems a bit tricky to me.

There's a much more realistic alternative option I think. We all have some of these toxins within ourselves. And it’s a much more practical proposition to change ourselves than attempting to change or remove those around us.

So not only should we be alert to toxic character traits in others, we should also try to purify our own system.

I am not here to preach or claim I am above criticism. I can count at least two or three traces of these toxins within myself. I don’t quite need a Betty Ford Clinic-style detox I hope, but relentless alertness to them and removing them is a sure way to purify ourselves I think.

And just as toxins in others make them destructive and debilitating to be around, toxins within ourselves don’t just erode our own strengths, they drive a wedge between ourselves and those we want to have productive and happy relationships with.

Here're my top nine poisons and how to detox from them.

1. Control

Controlling people think they know everything and the best way to do anything. They’ll never give anyone else a chance to contradict them, express a conflicting idea or influence their opinions. Learn to value and listen to the opinions of others. Don’t try to find fault in their views, but seek to find ways to improve their ideas.

2. Arrogance

Confidence and arrogance are totally different things. Confidence inspires; arrogance intimidates. Arrogant people always think they know best and feel superior to others. Remember to celebrate and show more enthusiasm for the success of others than your own.

3. Victims

Negatively charged people see themselves as perpetual victims. Victims look at their own situations and mistakes and seek to find others to blame, from their boss to their staff or their customers. Take ownership of your own life and change to adapt to the world around you. Don’t expect the world to change to suit you.

4. Envy

Those infected with jealousy don’t feel pleasure when good things happen to you. They can't appreciate it when others achieve success or move forward; they feel that if anything good is going to happen, they deserve it more than you. The success of those around you should be just as important to you as it is to them. Help others succeed as a matter of course. Sure, not everyone will reciprocate, but which is better a whole heap of goodwill, or a whole heap of indifference?

5. Lies

Liars are impossible to rely on. You can never know what to believe. You can't trust their promises or their statements. They will lie to you about others, and they will lie to others about you. Likewise we should tell the truth, always. Even if it’s bad news, sharing it now, is better than hoping it will disappear and be forgotten. It won’t.

6. Negativity

Some people are always suspicious of everything and everybody. Negativity destroys relationships, and spending time with negative people makes you feel the world is a much worse place than it actually is. My mantra is this: trust everyone and disappointment is a risk. Trust no-one and disappointment is guaranteed.

7. Possessiveness

Consumer culture relentlessly nags us to want more, achieve more and possess more. Sure, desire and ambition can be good things. But it turns toxic when people want everything for themselves and when possession, rather than doing or being, becomes the focus of their life. Aspire to success not as a way to have more for yourself, but as a way to be able to give more back to others.

8. Judgmentalism

Making a judgment and being judgmental are not the same thing at all. Judgments are objective and based on discernment, while being judgmental is just about criticism. Judgmental people are poor listeners and communicators and always too quick to jump to conclusions. Seek to understand before you seek to judge. Then consider how something can be made better.

9. Gossip

Gossips see themselves as being interesting because they share fascinating information about other people. And the more sensational this is the better. They do it because they secretly believe that their own lives are less interesting or deserve more privacy than those of others. They make little distinction between speculation and fact. We all talk about others – that’s natural. But if we bad-mouth someone, we can fully expect that those who hear this criticism will suspect that we will do the same to them.

So personally, I’m not about to remove anyone from my life. I’d much rather try and make others’ lives better by forever striving to become a better person myself. It'll keep me out of jail at least.

Any thoughts on what I should add to round this up to make a top 10?

How to assess the risk and rewards of joining a start-up

By Neil Patrick

In my career, I have been a member of three start-up teams. Two were highly successful. One was not. How can you tell which is which before you join?

Last week I had an interesting meeting. I had a coffee with a new Linkedin friend. It was one of those getting to know you type of conversations.

It turned out that he’d been a casualty of a failed business start-up. He’d invested a lot of his time, energy, skills and money into a business which the management team had convinced themselves would make them all millionaires.

But due to a variety of reasons outside his control, the business foundered. He ended up with no job. Nothing. Not even a redundancy cheque.

His story got me thinking about how we decide to join a start-up. I’ve done it three times in my own career. And I learned something different each time.

Often we don’t take the necessary steps to actively control our careers. We just react to the opportunities as they come along and they flow over us in a somewhat unplanned fashion. And if we are not totally happy in our present role, the prospects of a start-up can be highly attractive. You’ll get out of an organisation you don’t like very much and have the opportunity to shape a new one that’s much more to your liking.

But when we leave a ‘safe’ job for a shiny new start-up, many people do it because it offers the prospect of a big pay-off in the future.

That’s a problem; we get dazzled by the prospect of that big payoff, rather than being focused on what has to be achieved hit the jackpot.

And realistically what are the prospects of surviving a start-up, let alone making the big time? That’s the really important thing you must understand before you jump ship. 

But to get back to my new connection’s story. I could see several aspects of it which have relevance to almost everyone:

If a start-up offer materializes when we are job hunting, it’s tempting to just grab it.

The events which led up to the eventual meltdown in this story were not the result a great business plan gone wrong, but rather a series of events which created the illusion of an opportunity. He had lost his job recently so was on the hunt for his next paycheck.

Then the opportunity with the start-up came along. My friend had seized it with enthusiasm, but did he do the necessary due diligence? I don’t know, but if he did, it was clearly insufficiently rigorous. I think it just happened to come along when he needed a job and it was the most accessible offer around.

We can get blinded by the temptations of massive payoffs so easily

The excitement of the prospect of a huge pay-off is an extra tempting proposition for most of us. But the job offer isn't the same thing at all. You should view it as the offer of a job which may evaporate faster than any you've had before. And leave you with nothing.

So you must be clear you are comfortable with this reality. Ask yourself questions, like ‘Will this improve my job satisfaction and my skills?’ Will it get me closer to where I really want to be five years from now? I say five years because that’s the typical horizon at which you should anticipate an exit from a start-up.

Start-up plans are always full of faulty assumptions

One thing I have learned is that unless the business plan is based on completely known assumptions from an identical business elsewhere, they will be wrong. Sometimes a little bit wrong, sometimes a million miles from anything even remotely accurate.

And the more innovative i.e. untried the business model is, the less reliable the business plan assumptions will be. So whilst I love start-ups, if you are joining one, my advice would be to make sure that you know how reliable the planning assumptions are.

It’s your future that is in jeopardy if someone else got these even a little bit wrong. One thing is for sure, no business plan survives its first real world contact without alteration.

Without the right people, a start-off is seriously disadvantaged from the off

You must pay close attention to the start-up team. If they have done it before, you can take some confidence that they know what they are doing. If not, you need to really decide whether they can be relied upon to achieve what’s required.

Often start-ups struggle to attract the best talent. They are forced to settle for who they can get. This is simply because since they have no track record, they are obliged to pick from the minority who are willing to take the risk. And unless the leadership team has a stellar record of success, these are rarely the best possible candidates.

If we are not true to ourselves, we can never do our best work

I know, I know. It’s that ‘p’ word again. Passion.

It’s become a cliché. We get asked it at interviews. What’s your passion? And we feel obliged to say something ridiculous, like, ‘My real passion is building SQL databases’. Really? 

Our true passion is what we feel compelled to do. It’s what we’d do even if no-one paid us to do it…ever.

In hindsight, only one of the three start-ups I took on really matched my passion at the time. The other two I took on because they appeared to be the best option available at the time. In hindsight therefore, two were a bad choice for me.

In the case of my friend, I am pretty certain that he wasn’t truly following his passion either.

Joining a start-up isn’t a guaranteed ticket to fabulous riches

There’s a difference to being a founder (and therefore owning a large slice of the equity) and an early joiner, in which case you will possibly be offered stock if you stick around long enough AND if the business flourishes. This isn’t to be sniffed at, but it probably won't get you into the millionaires club either.

Plus you should expect that the next five years of your life will be consumed by the business. Its needs will take precedence over you own. This is fine if it’s a commitment you are willing to make and you believe totally in the company mission and business plan and playing your part fully in ensuring it becomes a reality.

If not, you really shouldn't be there.

So how should you decide whether you should join a start-up?

This depends on you. What do you find most important? If you are looking to strike it really rich, you probably have a better shot at doing so by being a moderately successful co-founder (eg 30% of a £10m exit is £3m). As an early joiner, even with a bigger exit value, your payout will be much less (eg 0.5% of a £25m exit is £125k).

On the other hand, if you are merely looking to accelerate your career, then there’s much to be gained by finding a superstar team and joining it at the earliest possible opportunity. Whatever happens to the business in the coming years, you’ll learn lessons of huge value to your future career.

At the end of the day, the key is to know what is most important to you, have a clear appraisal of the business plan and team and be completely clear about why you are joining.

Now can I try that again please?

Our retirement plans are ruined…and why this may be good news

By Neil Patrick

We all know the way our careers were supposed to go. Roughly speaking.

We’d get a bunch of qualifications, start work, change employers maybe four or five times, work hard, get promoted and then at around 50 or so have a comfortable cruise towards our retirement at 65. Then we’d be able to relax and enjoy the next 20 or so years.

We’ll that’s all gone now for most of us.

I’m sorry to say that it doesn't make much difference what your employer or financial advisor recommends. If you are a baby boomer in the US, UK and much of the EU, unless you’ve been so successful (or lucky) in your career that you are sitting on a very large pension fund, this version of our life story is a fairy tale.

You probably know this.

In the US, some 82 percent of workers aged 50 and older say it is at least “somewhat likely” they will work for pay in retirement, according to a poll released in October by the Associated Press-NORC Center for Public Affairs Research at the University of Chicago. Almost half of boomers polled now expect to retire later than they previously thought - on average nearly three years later than what they thought at age 40.

And this is just the tip of the iceberg. People have a habit of being unduly optimistic when thinking about their financial position if it’s much beyond the next year or so. It’s a combination of hope and difficulty in facing up to harsh realities.

Some of the other statistics emerging in the US are really horrific.

One in 6 reported having less than $1,000 in retirement savings and 1 in 4 working respondents aren’t saving for retirement outside of Social Security. Some 12 percent of non-retired people reported borrowing from a 401(k) or other retirement plan in the past year. Though 29 percent reported at least $100,000 in savings, some find even that’s not enough.

“All too often, people have a lump-sum illusion. They think, ‘I have $100,000 in my 401(k),’ and they think, ‘I’m rich,’” “said Olivia Mitchell, a retirement specialist who teaches at the University of Pennsylvania.“But it doesn’t add up to much. It certainly is not going to keep them in champagne and truffles.”

Make no mistake this isn’t a blip, or a phase. It’s a demolition of the life expectations of a generation. 

You can go searching for people to blame if you like. There are plenty who must carry at least a portion of the guilt. Personally, I think it’s more important to invest our energies in something more productive and positive.

Like working out what to do about this.

The good news is that humans are much more resilient and adaptable than we sometimes give ourselves credit for.

And when we are confronted with difficulties, we often respond in much more creative ways than we expect.

I have a friend who is 60. Two or three years ago he was on the face of it, doing well in his career in sales. He was the Sales Director for a booming manufacturing business. And much of that success was down to his drive and natural flair at finding clients and keeping them coming back for more. He’d be in his office every morning from about 7am, then from about 10am would be hunting down new clients and working on developing relationships with the current clients.

He was very, very good at his job. And the business was growing largely due to his abilities to win new orders and contracts. But I knew a different side. I knew that he was locked in a war with his boss. There was a huge power and personality fight going on. And this was steadily sapping my friend’s motivation and strength.

His stress levels were through the roof.

In the end he became ill. Very ill. He developed diabetes. He lost weight. He looked like a shadow of the man he used to be.

But he did the most sensible thing he could. He quit his job.

For a while he looked around for other jobs. But at 60, you guessed it, there was no-one interested in hiring him into the sort of job he just left. Especially since he’d quit at it.

Fast forward to today. I had a beer with my friend a couple of weeks ago. He looked strong and fit. He had recovered the twinkle in his eye and the infectious grin that he always used to have. He was happy and healthy again.

He hadn’t been hired into a new job. He’d created his own.

He was always great at DIY. And he loves doing it. He’s simply taken his hobby and turned it into his job. And by doing great work and looking after his customers better than almost any tradesman I ever met, he has far more work stacked up than he can actually do.

He's happier than he’s been for years. He has a job he loves and the customers are queuing up round the block.

Is he worried about his pension and retirement?

I doubt it, I really do.