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By Janet Banks and Diane Coutu
As the economy softens, corporate downsizing appears almost inevitable. Don’t panic yet, through. While layoff decions might seem beyond your control, there’s plenty you can do to make sure you retain your job.
In this article, Banks, a former HR executive at Chase Manhattan and FleetBoston Financial, and Coutu, an HBR senior editor and former affiliate scholar at the Boston Psychoanalytic Society and Institute, describe how to improve your chances of survival. It’s mostly a matter of coolheaded planning they observe. When cuts loom, the first thing to do is act like a survivor. Be confident and cheerful. Research shows that congeniality trumps competence when push cornes to shove. Look to the future by focusing on customers, for without them, no one will have work. Survivors also tend to be versatile, tight budgets demand managers who can wear several hats, so startdemonstrating what other capabilities you can offer. If
you’re, say, a managers who once worked as a teacher, take on a training role.
Remember to be a good corporate citizen: Participation matters now more than ever. It isn’t the time to behave as if work is beneath you or to argue for a new title. When one executive’s departement was folded under the management of a less-experienced colleague, she swallowed her pride and wholeheart-edly supported the hierarchy. Her superiors noticed her commitment and eventually rewarded her with a prestigious appointment.
It’s also important to offer leaders hope and realistic solutions. Energize your colleagues around change, like the VP of learning at a firm undergoing major staff reductions did. He organized a humorous in-house radio show that revived spirits and helped management communicate with employees-and ended up with a promotion.
Source : Harvard Business Review
Tuesday, February 10, 2009
Three Keys To Staying Ethical In The Age Of Madoff
By Umaimah Mendhro and Abhinav Sinha
Lessons from executives who kept themselves clean in Pakistan and India, where corruption is the rule.
What separates a Rod Blagojevich from a Patrick Fitzgerald? A Bernard Madoff from a Warren Buffett? What makes such people, at either extreme, so different from any of us? Everything--and not too much.
As citizens of Pakistan and India who are students at Harvard Business School, we spent a considerable amount of time over the past several months interviewing and drawing lessons from 12 leaders in Pakistan and seven in India who are carrying the torch of ethical business behavior. Come factory shutdowns, forced resignations or life threats, they've been standing up against corruption in environments where corruption is the rule.
Conventional wisdom and our own preconceptions hold that a mix of many complex, research-worthy characteristics and influences separates the highly moral from the corrupt. What we found suggested, to the contrary, that it all comes down to three simple things: honesty in use of language; insistence on proper behavior, even ahead of proper values; and a refusal to allow for gray areas.
The highly moral leaders we interviewed, whose colleagues think of them as somewhat crazy and unreasonable, have created personal identities, personal brands of sorts, for always standing up for the right thing. We call them "ethical mavericks." They are moral absolutists. To them, wrong is not defined by context, bribery not by the amount of money involved, and corruption not by how seemingly innocuous an act may be.
One of them, the founder and chief executive officer of a family-owned private business in Pakistan, had to face a formidable client who would not sign a contract until he was "paid a commission." Unwilling to give in, this CEO ended up losing more than 95% of his business and running up losses in the millions of dollars over two years.
He didn't fire a single employee, though. Nor did he try to evaluate the price his organization would have to pay for not being corrupt. And in time, he not only turned his company around but used its down period to train all his top managers to enter a new, and now highly profitable, line of business.
These ethical mavericks all use language to achieve clarity. When we asked the CEO of one of the largest retail businesses in Pakistan why no one before him had raised a red flag about the questionable practices carried out by his company, he said it was because no one thought to call what they observed "unethical" or "wrong"; they just called it "aggressive selling." In other words, corruption remained unquestioned not because people were malicious or greedy or poor but because corrupt behavior came wrapped in smooth, palatable jargon.
The CEO of a major software company in India not only clearly identified corruption at an individual level but also ensured that he communicated it to his entire organization. He not only stood up against corruption at different times during the evolution of the company but also let his employees know the costs the company had borne because of the stands it had taken. All of his employees are shown interactive videos about real, individual experiences.
The ethical mavericks also let their life experiences reinforce their values. Experiences happen, they say, and they confront you with choices about what you want to stand, and be known, for. "A victory against corruption is the best boost for an individual to pursue the right path," said the CEO of a large agribusiness concern in India.
Here are the three lessons we came away with after interviewing our ethical mavericks:
--Call corruption corruption. One of the most important things a leader can impart to his or her organization is an honest and explicit use of language. Corruption comes with many names, new and old. Ferret out the corrupt behaviors concealed in talk of complex derivatives, tax savings and import surcharges. Watch out when people discuss innovation, strategic business practices and competitive advantage. Use your power of language. You've been practicing it since you were two.
--Enforce behavior that creates new values. Behavior results from values, yes. But values can result from behavior too. Use experiences to enforce behavior that creates strong values. We met a young government official in Pakistan who had to spend time shadowing his manager and supporting him in weeding out corrupt employees. He credits his now deeply held opposition to corruption to that one experience.
And, most important:
--Give up on the security of wavering. There are no gray areas when it comes to corruption. Moral absolutism may sound like an archaic and austere concept, but it's a quality all these ethical mavericks share, and it's exactly what is needed to establish a clear, strong, unwavering voice for doing the right thing, especially when the costs are high.
In these difficult times, we can all benefit from more clarity in our language, a hearty dose of accountability in our actions and a handful of unwavering, stable guideposts. The world needs more credible, confident, nonconformist leaders who are worth following.
Source : Forbes.com
Lessons from executives who kept themselves clean in Pakistan and India, where corruption is the rule.
What separates a Rod Blagojevich from a Patrick Fitzgerald? A Bernard Madoff from a Warren Buffett? What makes such people, at either extreme, so different from any of us? Everything--and not too much.
As citizens of Pakistan and India who are students at Harvard Business School, we spent a considerable amount of time over the past several months interviewing and drawing lessons from 12 leaders in Pakistan and seven in India who are carrying the torch of ethical business behavior. Come factory shutdowns, forced resignations or life threats, they've been standing up against corruption in environments where corruption is the rule.
Conventional wisdom and our own preconceptions hold that a mix of many complex, research-worthy characteristics and influences separates the highly moral from the corrupt. What we found suggested, to the contrary, that it all comes down to three simple things: honesty in use of language; insistence on proper behavior, even ahead of proper values; and a refusal to allow for gray areas.
The highly moral leaders we interviewed, whose colleagues think of them as somewhat crazy and unreasonable, have created personal identities, personal brands of sorts, for always standing up for the right thing. We call them "ethical mavericks." They are moral absolutists. To them, wrong is not defined by context, bribery not by the amount of money involved, and corruption not by how seemingly innocuous an act may be.
One of them, the founder and chief executive officer of a family-owned private business in Pakistan, had to face a formidable client who would not sign a contract until he was "paid a commission." Unwilling to give in, this CEO ended up losing more than 95% of his business and running up losses in the millions of dollars over two years.
He didn't fire a single employee, though. Nor did he try to evaluate the price his organization would have to pay for not being corrupt. And in time, he not only turned his company around but used its down period to train all his top managers to enter a new, and now highly profitable, line of business.
These ethical mavericks all use language to achieve clarity. When we asked the CEO of one of the largest retail businesses in Pakistan why no one before him had raised a red flag about the questionable practices carried out by his company, he said it was because no one thought to call what they observed "unethical" or "wrong"; they just called it "aggressive selling." In other words, corruption remained unquestioned not because people were malicious or greedy or poor but because corrupt behavior came wrapped in smooth, palatable jargon.
The CEO of a major software company in India not only clearly identified corruption at an individual level but also ensured that he communicated it to his entire organization. He not only stood up against corruption at different times during the evolution of the company but also let his employees know the costs the company had borne because of the stands it had taken. All of his employees are shown interactive videos about real, individual experiences.
The ethical mavericks also let their life experiences reinforce their values. Experiences happen, they say, and they confront you with choices about what you want to stand, and be known, for. "A victory against corruption is the best boost for an individual to pursue the right path," said the CEO of a large agribusiness concern in India.
Here are the three lessons we came away with after interviewing our ethical mavericks:
--Call corruption corruption. One of the most important things a leader can impart to his or her organization is an honest and explicit use of language. Corruption comes with many names, new and old. Ferret out the corrupt behaviors concealed in talk of complex derivatives, tax savings and import surcharges. Watch out when people discuss innovation, strategic business practices and competitive advantage. Use your power of language. You've been practicing it since you were two.
--Enforce behavior that creates new values. Behavior results from values, yes. But values can result from behavior too. Use experiences to enforce behavior that creates strong values. We met a young government official in Pakistan who had to spend time shadowing his manager and supporting him in weeding out corrupt employees. He credits his now deeply held opposition to corruption to that one experience.
And, most important:
--Give up on the security of wavering. There are no gray areas when it comes to corruption. Moral absolutism may sound like an archaic and austere concept, but it's a quality all these ethical mavericks share, and it's exactly what is needed to establish a clear, strong, unwavering voice for doing the right thing, especially when the costs are high.
In these difficult times, we can all benefit from more clarity in our language, a hearty dose of accountability in our actions and a handful of unwavering, stable guideposts. The world needs more credible, confident, nonconformist leaders who are worth following.
Source : Forbes.com
U.S. offers $2 trillion bank plan but stocks slump
By Glenn Somerville
WASHINGTON (Reuters) - U.S. Treasury chief Timothy Geithner on Tuesday unveiled a new bank rescue plan that would put $2 trillion to work mopping up bad assets and restoring credit, but stock markets plunged on fears it would not work.
Global markets had intensely awaited Geithner's ideas for a plan mixing private and public funding to stabilize a financial system tottering under the weight of bad mortgages, but were disappointed over the scant detail he provided.
The Dow Jones industrial average closed down more than 380 points or 4.6 percent in its biggest one-day percentage drop since December 1, while prices for U.S. government bonds climbed as investors sought safety. The KBW index of bank stocks fell almost 14 percent.
Geithner said lack of public confidence in prior rescue efforts had made it all the more difficult to stop "a dangerous dynamic" in which a lack of credit undercuts the economy and leads to more weakness among banks, worsening the recession.
"This is very complicated to get it right," he said in an interview on Bloomberg Television. "We are going to try to get it right before we give the details so that we don't add further to uncertainty in these markets."
In a speech, on television and in Capitol Hill testimony, Geithner made his case for how the Obama administration plans to handle the roughly $350 billion left in a $700 billion financial bailout fund approved by Congress in October.
He studiously avoided saying whether the administration might have to ask Congress for more money to fix the banks, restore credit and counter recession, but did not rule it out.
"We're going to consult with the Congress carefully to try to make sure the world understands that the resources necessary to solve this will be available over time," Geithner told CNBC, adding:
"The important thing is that ... we send a basic signal, working with the Congress, that we will do what's necessary to fix this."
Market participants, however, were frustrated. "Investors want clarity, simplicity and resolution. This plan is seen as convoluted, obfuscating and clouded," said James Ellman, president of Seacliff Capital in San Francisco.
LEVERAGING PRIVATE MONEY
A centerpiece of the renamed "Financial Stability Plan" is a proposal to set up a public-private investment fund, in partnership with the Federal Deposit Insurance Corp, a bank watchdog, and the Federal Reserve, the U.S. central bank.
Seeded with public money, it would leverage up to $500 billion -- and possibly as much as $1 trillion -- so that toxic assets can be purged from a weakened banking system.
Geithner told an invited audience at the U.S. Treasury that $50 billion in federal rescue funds will be used to try to stem home foreclosures and soften the crushing impact of the deep housing crisis now afflicting the entire economy.
The plan would also expand a Fed program aimed at expanding credit card, student, auto and small business lending.
The program includes an expansion of the Fed's Term Asset-backed Securities Loan Facility (TALF), which is aimed at expanding lending for credit cards, student and auto loans.
The lending facility is to expand from its current $200-billion limit, thanks to a jump in Treasury funding to $100 billion from $20 billion, which will provide a platform to enable up to $1 trillion of new consumer lending.
The Fed lending facility will also be able to include commercial mortgage-backed securities as well as mortgage-backed securities packaged by private financial institutions.
The Treasury is tussling with the worst problems in decades, stemming from careless lending that helped fuel a housing crisis that has now dragged the U.S. economy and much of the rest of the world into deep recession.
Geithner warned it will take time to resolve the crisis but his proposals to do so failed to reassure market participants.
"Investors want clarity, simplicity, and resolution. This plan is seen as convoluted, obfuscating, and clouded," said James Ellman, President of Seacliff Capital in San Francisco.
Geithner acknowledged deep skepticism has developed over the fairness and efficiency of a $700-billion bank bailout program approved by Congress in October. About half of that money has been committed, including $250 billion in the form of direct capital injections for troubled banks.
He said leaders of some financial institutions that have received money had squandered the good faith that is needed to make the bank rescue effective.
"The spectacle of huge amounts of taxpayer money being provided to the same institutions that helped cause the crisis, with limited transparency and oversight, added to public distrust," Geithner said.
President Barack Obama said on Monday that cleaning up banks' balance sheets was a priority and didn't rule out the possibility that it will take more money than the $700 billion Congress already has approved to complete the job.
"We don't know yet whether we're going to need additional money or how much additional money we'll need until we see how successful we are at restoring a level of confidence in the marketplace," Obama told a news conference.
(Additional reporting by David Lawder and Mark Felsenthal; Editing by James Dalgleish)
WASHINGTON (Reuters) - U.S. Treasury chief Timothy Geithner on Tuesday unveiled a new bank rescue plan that would put $2 trillion to work mopping up bad assets and restoring credit, but stock markets plunged on fears it would not work.
Global markets had intensely awaited Geithner's ideas for a plan mixing private and public funding to stabilize a financial system tottering under the weight of bad mortgages, but were disappointed over the scant detail he provided.
The Dow Jones industrial average closed down more than 380 points or 4.6 percent in its biggest one-day percentage drop since December 1, while prices for U.S. government bonds climbed as investors sought safety. The KBW index of bank stocks fell almost 14 percent.
Geithner said lack of public confidence in prior rescue efforts had made it all the more difficult to stop "a dangerous dynamic" in which a lack of credit undercuts the economy and leads to more weakness among banks, worsening the recession.
"This is very complicated to get it right," he said in an interview on Bloomberg Television. "We are going to try to get it right before we give the details so that we don't add further to uncertainty in these markets."
In a speech, on television and in Capitol Hill testimony, Geithner made his case for how the Obama administration plans to handle the roughly $350 billion left in a $700 billion financial bailout fund approved by Congress in October.
He studiously avoided saying whether the administration might have to ask Congress for more money to fix the banks, restore credit and counter recession, but did not rule it out.
"We're going to consult with the Congress carefully to try to make sure the world understands that the resources necessary to solve this will be available over time," Geithner told CNBC, adding:
"The important thing is that ... we send a basic signal, working with the Congress, that we will do what's necessary to fix this."
Market participants, however, were frustrated. "Investors want clarity, simplicity and resolution. This plan is seen as convoluted, obfuscating and clouded," said James Ellman, president of Seacliff Capital in San Francisco.
LEVERAGING PRIVATE MONEY
A centerpiece of the renamed "Financial Stability Plan" is a proposal to set up a public-private investment fund, in partnership with the Federal Deposit Insurance Corp, a bank watchdog, and the Federal Reserve, the U.S. central bank.
Seeded with public money, it would leverage up to $500 billion -- and possibly as much as $1 trillion -- so that toxic assets can be purged from a weakened banking system.
Geithner told an invited audience at the U.S. Treasury that $50 billion in federal rescue funds will be used to try to stem home foreclosures and soften the crushing impact of the deep housing crisis now afflicting the entire economy.
The plan would also expand a Fed program aimed at expanding credit card, student, auto and small business lending.
The program includes an expansion of the Fed's Term Asset-backed Securities Loan Facility (TALF), which is aimed at expanding lending for credit cards, student and auto loans.
The lending facility is to expand from its current $200-billion limit, thanks to a jump in Treasury funding to $100 billion from $20 billion, which will provide a platform to enable up to $1 trillion of new consumer lending.
The Fed lending facility will also be able to include commercial mortgage-backed securities as well as mortgage-backed securities packaged by private financial institutions.
The Treasury is tussling with the worst problems in decades, stemming from careless lending that helped fuel a housing crisis that has now dragged the U.S. economy and much of the rest of the world into deep recession.
Geithner warned it will take time to resolve the crisis but his proposals to do so failed to reassure market participants.
"Investors want clarity, simplicity, and resolution. This plan is seen as convoluted, obfuscating, and clouded," said James Ellman, President of Seacliff Capital in San Francisco.
Geithner acknowledged deep skepticism has developed over the fairness and efficiency of a $700-billion bank bailout program approved by Congress in October. About half of that money has been committed, including $250 billion in the form of direct capital injections for troubled banks.
He said leaders of some financial institutions that have received money had squandered the good faith that is needed to make the bank rescue effective.
"The spectacle of huge amounts of taxpayer money being provided to the same institutions that helped cause the crisis, with limited transparency and oversight, added to public distrust," Geithner said.
President Barack Obama said on Monday that cleaning up banks' balance sheets was a priority and didn't rule out the possibility that it will take more money than the $700 billion Congress already has approved to complete the job.
"We don't know yet whether we're going to need additional money or how much additional money we'll need until we see how successful we are at restoring a level of confidence in the marketplace," Obama told a news conference.
(Additional reporting by David Lawder and Mark Felsenthal; Editing by James Dalgleish)
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