Friday, April 20, 2001

Job Security

The nature of job security has changed forever, yet again.

In my parent's generation, job security was simple. Once you won a job with a company, you stayed there for 40 years, and retired with a generous pension. If you were lucky, you got a company car and other perks that went well with a tranquil suburban lifestyle.

A decade ago, that changed, with the advent of rengineering and downsizing. As any reader of this column knows, I'm definitely not against downsizing. If fact, I think it's a good thing. However, it did fundamentally change the nature of job security.

For the past five years, job security has consisted of a) working for a successful company, and b) having a reasonable grasp of technology and change. If you picked wisely, and worked for a Cisco Systems, you might even become a millionaire simply for sticking around. Even if you didn't become a stock option millionaire, those magic instruments still help out the promise of paying for that BMW Z3, or that house downpayment. Employees of admired companies felt safe, even as the dot-coms crashed and burned. After all, people would always need more computers, more software, more routers, or more good advice.

In the past three months, that's all changed again. Now no company is safe. Even the mightiest companies of the information revolution, the Ciscos, Dells, and Suns have been forced into layoffs. Siebel beats earnings estimates and announces a 10% cut.

The new job security calls for new rules.

Rule #1: Control Your Own Destiny
You can only feel secure if your fate is in your hands. Find a job where you contribute directly to your firm's success, and its ability to employ you. Make sure that you contribute directly to profits. This doesn't just apply to sales people; everyone, from admin assistants to software engineers to graphic designers need to get as much control over a revenue stream as possible.

Rule #2: Make Yourself More Useful Than Your Co-workers
As the old saying goes, you don't need to outrun the bear, you just need to outrun the other guy that the bear is chasing. Make yourself more useful than your co-workers, and the ax will fall on their necks, not yours. This means getting your job done quickly and efficiently, then asking for even more work. Beware, though, don't fall into the trap of accepting work from your co-workers. Only take assignments from people who are in a direct chain-of-command above you.

Rule #3: Plan On Getting Fired
Act as though you expect to get fired. Hustle. Build up your human capital. Network. All of these activities will make you more useful than your co-workers and help you control your own destiny.

Besides, if you do get canned, you'll have a good head start.

Wednesday, April 18, 2001

Staying On Target

Maintaining your focus is a constant challenge in today's world. I've found that a few simple shortcuts can eliminate the clutter and keep me on track.

The advent of the Internet has raised procrastination to new heights. When you wanted entertainment in the old days, you had to walk to a water cooler to gossip about your peers' sexual inadequacies. In the current era of instant messaging, streaming media, and, of course, dancing hamsters, endless procrastination is only a keystroke away.

Even more insidious is the procrastination that masquerades as productivity. The five times daily pilgrimage to The slow perusal of F*ed Company--just for the news, of course.

Plus, with fewer people doing more things in an environment in constant flux, it's tough to remember what to do, or to stay productive.

I've struggled with this for years, from the personal planner days to the Palm V era, and none of it helps.

Ultimately, the solution that I found is very low-tech, very simple, but very effective.

Every Friday afternoon, when the rush of the week has subsided, I take half an hour to compose a checklist of what I need to accomplish the following week. It's a simple Word document, with room for checking off the tasks. If I need to work with anyone else, I put their names down.

Here's a sample of this week's list:

__ Launch Commission Junction distributor program
__ Create user demo for the Lead Engine web site
__ Draft Got.Net co-location contract

Once the checklist is complete, I email it to everyone that I work with, and post a printed copy outside my office where everyone can see it. As I complete the tasks, I check them off with my trusty black pen. If something else comes up, I add it in--again, in pen.

Now I know exactly what I need to do, and whenever I feel the itch to sneak over to, I just glance at my checklist and move on to the next unchecked item. The 1-week time horizon is just enough to give me some long-term thinking without requiring constant revisions.

It may seem like a small thing, but it's the anchor that I cling too in the maelstrom of business today.

Tuesday, April 17, 2001

A Profitable Decline

Anybody can succeed during periods of wild growth; you really earn your spurs managing through declines.

Growth makes everything easy. Promotions, raises, bonuses, even fancy new buildings and corporate masseuses make it a cinch to keep your employees happy and play the benevolent capitalist. The problem is, growth can't last forever.

No company can grow for 20% a year forever. It's simple mathematics. If the world's economic output is growing at 2% per year, a company that grows faster than that will eventually account for 110% of world GDP.

Back in 1999 and 2000, there were a number of companies whose stock market valuations seemed to assume just that: total world domination.

However, every growth story must come to an end, and most of them suffer hiccups along the way.

Take Cisco Systems. Cisco is the ultimate growth stock. It has a near-monopoly on the routers that form the backbone of Internet infrastructure (at last count, still doubling every 6 months). It has one of the world's most admired CEOs, and has created thousands of millionaires among its employees. It may very well be the single greatest venture investment in history.

And yet, just this week, Cisco learned that even the greatest growth story can come to an end.

As a result of a 30% drop in revenue, Cisco will report its first quarterly loss ever, and the outlook for the future is extremely cloudy.

What Cisco management needs to do now, is to manage a profitable decline.

Contrary to popular belief, you don't have to grow to be profitable. Some companies have been extremely effective at making money in declining industries. Computer Associates has made a living as an IT bottom-feeder, vaccuuming up legacy companies and serving their shrinking but profitable customer base.

It's not easy. You have to cut expenses to the bone. After all, you can't control revenues, but you can always control expenses. Simply refuse to spend money, and count on your team's creativity to do more with less.

You have to be ruthlessly efficient, and squeeze every last dollar out of your sales. That means watching sales costs like a hawk, and pounding your receivables on a daily basis. You should also stretch out your own payables as much as your creditors allow.

But if you can manage a profitable decline, you'll be able to make money in any environment. And, if your business begins to grow again, you'll be in an even better position to grow profitably.

Monday, April 16, 2001

The End of Stickiness

I spent last week on vacation in Amsterdam, completely cut off from the Internet. No Web, no email, nothing. First time I've done that since my honeymoon in 1998.

While I missed my usual dose of information, I couldn't help but be struck by the parallels between e-business and some of the practices that I observed in Amsterdam.

For example, in Amsterdam, restaurants and cafes take forever to take your order, bring your food, and collect your check. For some people, this might seem like a pleasant case of old world charm, letting you linger over mealtime conversation. For this busy American tourist, however, it was horrible.

The worst episode happened at The Pancake Bakery. For those who have never been to Amsterdam, the Dutch are huge pancake fans. Cafes all over the city serve pancakes that look like giant crepes, topped with every conceivable substance, from smoked salmon to chocolate (though thankfully not at once). They're quite delicious, though I'll never understand how the Dutch avoid being the fattest people on the planet. Maybe it's all the smoking.

Anyway, my wife and I stopped at the Pancake Bakery for lunch (a Norwegian pancake with smoked salmon and creme fraiche and a Dutch pancake with ice cream, cherries, liquor, and whipped cream), which was quite excellent. While we were eating, however, a massive crowd had built up, thanks to the popularity of the restaurant. There were at least 20 people waiting, and they spilled out into the street, despite near-freezing temperatures.

When we finished our meal, I went up to pay and was told to return to my seat, that they would come with the bill shortly. I thought, "Oh, how nice," and sat back down to wait. And wait. And wait.

After 30 minutes, they still hadn't brought the bill! Now mind you, this is with 20 potential paying customers waiting in the freezing cold.

Finally, I had to force my way back to the cash register and insist on paying! Needless to say, I stiffed them on the tip.

Nonetheless, this bizarre behavior isn't restricted to our European friends.

Think of all the times you've heard "stickiness" hailed as a panacea for web sites. Well, the problem is, having stickiness without actual sales is like having customers hanging around your restaurant without actually collecting checks.

The goal of a business is to make money. Yes, it's important to have all your tables full, and to keep your customers happy, but at the end of the day, what matters is what's in the cash register.