Career Management Monday, October 06, 2008

By Scot Herrick | Cube Rules Commentary

Oct 06

As I am writing this, the DOW is down over 500 points from Friday. Asian markets were down and so was Europe. Europe was down because the Union could not come up with an overall agreement on how to bail out banks like what happened here in the US. Like we know what we’re doing! But, to get to the gravity of the downfall, last week the American stock market lost as much as what usually happens in a bad bear year – -9.38% on the S&P 500, -7.34% on the Dow, -10.81% on the NASDAQ, and -12.12% on the small stock Russell 2000.

And that doesn’t count the $900 billion the Fed just dropped into the market to improve liquidity. At some point, they will need to start printing money.

The point of all of this is not to drive fear into the heart of the Cubicle Warrior. But, not paying attention to reality is a critical mistake and leads to total surprise when companies shut down or there are layoffs. Since we are not “governing by Dow,” we need to look at what the market is telling us because it limits the choices executives who run companies have when it comes to your career.

Regardless of where the market ends today, there are some good generalizations to be made, with specifics to what you can do at the end:

  • Simply having a bailout plan doesn’t mean the plan will work. People spent the weekend looking at the plan and see just as much, if not more, risk in the economy as they saw two weeks ago.
  • The rest of the world looked at the plan – and then looked at what their country was doing to solve the liquidity crisis and weren’t thrilled. Then they wondered if their country could come up with the equivalent amount of money the US did in relation to their economy. And failed.
  • The bailout will take time to determine if it is a success or failure. There are a lot of companies that don’t have a lot of time.
  • Virtually all the analysts I have been reading are saying there will be (many) more bank failures over the next year. This is because all the resets in interest rates on those lousy mortgages have not happened yet. Plus, housing pricing is nowhere near ending its free fall.

So what do we need to take away from all of this for our careers right now?

  • Our job and career choices will be limited. Because companies are reluctant to hire, being able to move from one company to another is tough and even between departments will be difficult.
  • Watch for changes in your company’s environment. Projects cancelled more than normal? Budgets cut back? Hiring freeze started? Training and travel cancelled? Senior executives leaving and not replaced? Sales not hitting projections or plan? All of these are signs that the company environment is tougher than it was before.
  • Risks to changing jobs are different. Where the risk in good times is low, now you need to evaluate a change with a bigger microscope. Not only do you need to judge the job in relation to your career, but you need to evaluate the risk of the company and the management. Jumping to a great new position when the new company is high risk needs to be calculated in your decision.
  • You need independent analysis of your company’s fortunes. What management tells you is important. You can trust that – but verify. Tracking your company stock, outside analyst reports, and news reports on your company is needed to ensure what the management is telling you are making sense to shareholders. If it doesn’t match, you need to ask the questions and listen to the answers. Management does not help itself by covering up what is going on with employees because employees are the ones interacting with the customer. If management isn’t acting like an adult, you should have some bells going off.

Now, there are some huge opportunities out there for people who have been prepared to meet downturns, kept their job skills current, and are great performers. So not is all doom and gloom. But to ignore the reality of the mess we’re in is not prudent to preserving and growing your career. Watch for the signs of change in your company and be ready to act.