Job Seekers Went Mobile, and Left Small Employers Standing Still

Where do you think most job seekers begin their search for a new job? Most recruiters will tell you that candidates start by searching on the big job boards like Monster, Dice and CareerBuilder.

And those recruiters will be wrong.

Ten times more job seekers start their job search on Google than anywhere else.  (Update: I have not been able to verify this statistic elsewhere, and it clearly uses global information, not just the United States.)

Where do small employers post their jobs? When I ask HR managers where they post their open jobs, they usually rattle off a list of job boards. But they almost never mention Indeed. Yet three recent studies found Indeed to be the number one external source of hire for employers in the US.  (Not coincidentally, all three surveys were from companies that provide Applicant Tracking Systems that integrate seamlessly with Indeed: iCims, SilkRoad and Newton Software.)

How did that happen?

It’s simple, comScore research shows that two out of three searches of any kind originate on Google. And Google job searches often lead job seekers to Indeed. See for yourself. Type your own title and location into the Google search bar and see what comes up. The first few jobs you will see are probably posted on Indeed. Consequently, Indeed has three times more unique visitors per month than CareerBuilder (80 million vs 24 million). (UPDATE: In January Indeed had 100 million visitors)

But the bigger threat to small employers long term is not Google upending the job boards, it’s mobile and social.

According to comScore, more than one out of every three minutes spent online is now spent “beyond the PC” on smart phones and tablets. Already 30% of Indeed’s total candidate visits are mobile. They encourage it. Both Indeed and CareerBuilder have mobile apps that let candidates apply to jobs from their phones with minimal effort … as long as the employer enabled the mobile-apply functionality. But very few small employers make their job ads and career sites mobile friendly … because many small employers don’t have a career site.

In a 2012 study by potentialpark, 77% of recent college grads expect to see a company career site and 94% go on to say that in addition to the career site, employers should present themselves on at least one social or professional platform. 61% expect employers to have a Facebook career page, and more than half expect a company page on LinkedIn. And if you disappoint them, they will be vocal about their job search experiences. 92 percent say they discuss their job search experience with others, both in-person and through social media.

So let’s sum this up. Only 4% of job seekers start their job search with a specific company in mind. So if your ads are not in the right place to be seen, you won’t be considered. And if somehow candidates do see your ad, 34% will not apply if your application process is too much of a hassle. And if they do apply, and don’t enjoy the experience, they just might leave a bad review about your company on Glassdoor or Indeed, scaring off everyone else who might consider working for you. (I called this trend, “The Amazonification of Recruiting” in a post on The HR Examiner.)

Employers, this is your wake up call. In the past 3 years, almost everything you took for granted about job advertising has changed.

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(To see more research on recruiting, visit my online library of articles.)

DISCLOSURE: This is not an endorsement of any vendor. I am not paid by anyone mentioned in this post. I am however, a client of Careerbuilder, iCims and Indeed.

How To Interview An Innovator

Clients often engage us to help them find an innovator for a strategically significant project. They need people who have taken something entirely new and gotten it off the ground, which is all too rare.

So that means we need to help them find a way to interview innovators and distinguish the poseurs and pretenders from the Real Deal Innovators. The world is full of one-hit wonders who, like Forest Gump, happened to be present once at a successful time in history. Their false confidence and hubris will stand in the way of your innovation as surely as their inflated salary requirements will impoverish your new initiative.

As it turns out, it’s not that hard to separate the pretenders from the doers. I consider you the Real Deal if:

• You spend more time innovating and putting your ideas into practice than almost anyone in your peer group (which accelerates your expertise far beyond everyone in your field).  You have earned the respect of a few industry  insiders, but you are probably not famous or widely known. (This is widely misunderstood. Being famous is a reverse predictor … it takes time and effort to build fame. Time that could be better spent on innovation.)
• Unlike the famous people who speak at all the cool conferences, you have the tyranny of daily results driving your innovation. You measure yourself against hard metrics. You don’t come up with ideas and then spend time giving speeches about it. Trying to look smart. Leading to the inevitable decline of your actual skills as you progressively lose touch with reality and spend more time with sycophants.
• And you probably don’t work in a place where your ideas have to be approved by a committee. You don’t spend all day in meetings. And you certainly don’t spend all day reporting on your results instead of producing them

No, when you are the Real Deal, you spend the vast majority of your time in the trenches. You know that most ideas don’t survive contact with reality. But parts of them do. So you try things, fail, learn, refine, and improve. Constantly experimenting, and constantly challenged by the imperative of producing results. Genius physicist Neils Bohr said “An expert is a person who has made all the mistakes that can be made in a very narrow field.”

It’s bloody hard to be on the bleeding edge of innovation. Creating the future is always uncomfortable and from day to day it usually feels like failing … until you look back from time to time and see how far you’ve come. (I am collecting a series of the most useful articles on this topic here: http://www.scoop.it/t/driving-innovation. Scott Berkun’s classic book The Myths of Innovation is also a must-read for innovators.)

So how do you interview an innovator?

• Listen for the daily grind of it.
• Listen for the experimentation, the risk, the failure and the grit and resilience to try again.
• Run from people who describe it as a big success with no moments of uncertainty.
• And then ask yourself, “Am I really ready to put up with a Real Deal Innovator?”

The Daily Grind of Innovation

We’re constantly developing recruiting approaches that get better results and keep costs down for our clients. Someone I respect in the executive search business looked at one of our latest process innovations and proclaimed, “Once again you are about 100 years ahead of us.”

But, as science fiction writer William Gibson observed, “The future is already here–it’s just not evenly distributed.” Like you, we’re just trying to keep up with the pace of change swirling around us. So as we leap ahead in some areas, we find ourselves falling behind in others.

This week I happened to look at the well-oiled machine that is our job posting process. We find most of our candidates through direct recruiting, but we still advertise on job boards …  just to be sure. Years ago, we optimized the daylights out of our job postings. On CareerBuilder for example, we still get three times more applicants to our job postings than the average (yeah, they have reports for that).

But when we looked this week, disturbingly, we noticed that a significant number of ads on CareerBuilder have become more visually attractive than ours (as employer branding has become more commonplace). We could no longer count on our ads to be interesting because they are well written. The context of our ads changed. In a visual world, a text ad looks dull when you place it next to other ads with pretty graphics. This is not an immediate problem (it barely registers in our statistics yet) but inevitably we will see a decline in our ad effectiveness. (Naturally I spent an hour on the phone with CareerBuilder to find a solution).

Innovation is a daily grind.

Ten years ago, a big recruiting innovation would create a competitive advantage for years. But now, with a faster pace of change, we find the need to revisit almost every aspect of our search process every 12 to 18 months. Our Operations Manager put it this way,  ”Keeping our processes current is more like polishing the silver than painting the house.”

 

Reinventing the Executive Search Firm (Part Three: Being Digitally Approachable)

Many years ago, you could judge an organization by the professionalism of their sales force and the quality of their marketing documents (“Hey nice suit, and gosh that’s an impressive brochure!”)

Now, nobody wants a sales call and nobody reads brochures. Buyers do their research, gather recommendations from people they trust, check out the organization online and make their purchase decisions before they ever pick up the phone. (This is true for both candidates and employers).

Google is the new business card … and brochure … and sales force. Your reputation is now your digital reputation–whatever shows on the first page or two of the search results.

An engaging website with great content is expected by everyone. Authentic, online testimonials are expected by most people. A healthy social media community is important to the social media savvy people. A quick Google search should reveal a blog or a book or an interview that reflects well upon you and conveys how you view the world. Oh, and it doesn’t hurt to have something else impressive pop up on page one of the Google results, perhaps an an award or something… 

And what about online reviews? With an empowered consumer, advertising  is giving way to online reviews. Yelp drives significant candidate flow to some staffing firms (and away from others).

Which brings me to executive search.

Why are so many executive search firms still operating with a bare-bones online presence? I can tell you from experience that it takes years to develop enough content to support a robust online community, and whoever gets started earliest often gathers the most attention.

In every sector of the economy, almost every organization is working diligently to make their marketing and communications efforts more social media friendly.

But when you look around, most executive search firms are still woefully behind the curve. Firms that are not gaining experience in social media and firms that have not invested in becoming “digitially approachable” will find themselves falling further and further behind.

You can read Part Two of this series here.

Reinventing the Executive Search Firm (Part Two: Contacting Candidates)

Many years ago, the most effective way to introduce yourself to a busy professional was to call their office.

Now, phone calls are an interruption and voicemail is a black hole. Many people consider it rude to simply call someone without making some sort of introduction first. Good manners now dictate that communciation is asynchronous–the recipient gets to choose when and where they would like to be contacted. I’m finding that even welcome calls, like employers who want to engage my services, usually start first with an email. 

Many years ago, an effective way to recruit good people was to call good people and ask who they knew.

Now, all those calls go to voicemail (see “black hole” above). The most effective way to find good people is to identify the online communities where they gather, to carefully identify potential candidates from their “digital footprints” and online profiles, and then to share an authentic, compelling message with rich detail via email or social media.

Candidates can’t be kept in the dark about details, or talked into anything, they simply want to be trusted with the facts and then invited to share the opportunity with whomoever they wish, and when and how they see fit. In this way, friends share opportunities with friends, and good recruiting messages are socialized organically, without expensive cold-calling or advertising.

Pushy sales reps and voicemail cannot do what good messaging, email and social media can.

Many years ago, it would take time and a trip to the library to research an organization. So the search firm would know a great deal more about a job opportunity than the candidate would. The recruiter would always have an information advantage.

Now, candidates can tap into their social media connections to find people in their network familar with an employer, and anyone with an internet connection can be reasonably well-informed within a few hours.

Which brings me to the executive search business model.

Executive search firms need to stop hiring cold-calling sales professionals, and stop paying them steep commissions in an attempt to talk people into jobs. This business model is increasingly out of step with the times.

In the modern world, search firms must be able to:

• Craft an authentic, compelling message that’s interesting enough to be shared.
• Find the right people to contact, and get the message out in a respectful and efficient manner.
• Trust the candidate to decide what is in their own best interest.

In our comparison tests, we’ve found that interesting messages, properly socialized,  significantly outperform cold-calling.

The executive search industy will inevitably adapt to the forces reshaping every other industry, and we welcome the change.

Read Part One of this series here.

Reinventing the Executive Search Firm (Part One: Location)

Many years ago, outplacement firms had lovely offices where laid-off executives could go to conduct their search. They could use an office to make phone calls, and they had administrative support.

Now, the vast majority of outplacement is done virtually. The job seeker rarely needs to visit the outplacment office. Costs plunged as outplacement firms shed their exepensive real estate and overhead costs. Outplacement services are still in high demand, but costs dropped as the delivery mechanism changed.

Many years ago, if you wanted to buy something, you went to a store. 

Now, Amazon delivers merchandise to your home the same day you order it, and many people are predicting “the end of retail as you know it.” Retailers with expensive overhead costs struggle to compete with Amazon’s pricing. Consumers are still buying plenty of merchandise, but costs dropped as the delivery mechanism changed.

Many years ago, sales reps were the best source of information about products and services. You could actually learn something from them.

Now, by the time most customers are ready to buy, they have already done their research, and often know more than the sales rep. People no longer trust what they are told, they trust what they have learned on their own. Customers still buy, but are no longer willing to ”be sold.” Maintaining a sales force is expensive, and many firms are learning how to attract customers without heavy sales and advertising expenses.

Which brings me to executive search.

Candidates don’t want to go to the offices of an executive search firm, and they don’t expect to learn much from talking to the sales rep (recruiter). They would prefer to be more in control of how they gather information.

Employers still want great candidates, but are reluctant to pay 33% of annual salary if less expensive options were just as effective.  

For both candidates and employers, the personal service from a search firm is still helpful, but the delivery mechanism must change.

What we have done:

Staffing Advisors has conducted over 300 searches without a salesforce, with nobody on commission and without using expensive offce space, and here’s what we’ve found:

Candidates and employers, when given a choice, want our recruiters to schedule virtual interivews rather than take the time and expense of meeting every candidate  face to face. Our retention statistics have proven that properly executed virtual interivews bring just as much rigor (and far less bias) to the hiring process. They also allow us to cast a much wider net for nontraditional candidates.  

Inevitably, the traditional search firm business model will give way to forces that are reshaping outsourcing, retail and every other industry. We welcome the changes.

Don’t Believe Everything You Think

In turbulent times like these, it’s critical to hire people who have a growth mindset.   But growth is not always so easy.  Before we can learn something new, we must often “unlearn” what we think we know.   That makes unlearning a business imperative. 

To adapt to rapid change, we must learn how to view things from new perspectives, and find ways to regularly challenge our out-dated assumptions.  

“The illiterate of the twenty-first century will not be those who cannot read and write, but those who cannot learn, unlearn and relearn.” Alvin Toffler

In a brilliant paper on unlearning, professor William Starbuck notes that senior managers, technical experts and organizations are all very resistant to evidence that contradicts their beliefs. 

“Top managers’ perceptual errors and self-deceptions are especially potent because senior managers can block actions proposed by their subordinates. Yet, senior managers are also especially prone to perceive events erroneously and to overlook bad news. Although their high statuses often persuade them that they have more expertise than other people, their expertise tends to be out-of-date. They have strong vested interests, and they know they will catch the blame if current policies and actions prove wrong.”

Counteracting the accumulated weight of senior managers, experts and organizational inertia is no easy task, but because the essential requirement for unlearning is doubt, any stimulus that creates doubt can be helpful.  In your own thinking, you may find that adopting these 8 mental practices will be particularly helpful:

• “It isn’t good enough.”  Dissatisfaction is the most common reason to doubt current methods, but often it is the slowest to bring change.
• “It’s only an experiment.”   When people see themselves as experimenting, they find it easier to test their assumptions, and listen to feedback – they have less interest in trying to look successful, after all not all experiments are supposed to turn out perfectly.
• “Surprises should be question marks.”  Both disruptions and pleasant surprises can reveal weakness in current thinking and stimulate improvements … but only if you use the opportunity.
• “Assume all dissents and warnings have some validity.”  Organizational hierarchy sends good news up the chain of command, but often blocks bad news from rising.   The paper outlines 4 sensible ways to address warnings.
• “Collaborators who disagree are both right.”  Rather than declaring one viewpoint right, and the other wrong, reconciling apparent contradictions between conflicting viewpoints often reveals that they are not contradictions at all, leading to new insights.
• “What does a stranger think?”  New people view problems from a different perspective than insiders.  Don’t just assume they are naive.
• “Work backwards.”  Cause and affect may not be so simple.  If you think A affects B, train yourself to look for evidence where B provides feedback that affects A. 
• “The converse of every proposition is equally valid.”    If you want to break free of your assumptions, try reversing your arguments.  For example: Do superiors impose authority?  Or do subordinates grant it?

Admittedly, I am ”often wrong, but never in doubt.”   But that said, I can attest to the profound impact of incorporating just a few of these practices into how we run Staffing Advisors.  

Can you imagine what would happen if  your organization adopted all of them?

Thank You for the Inspiration

2009 was a tough year to be running a company, yet there were so many blessings, and so much to be grateful for.  

Naturally, I’m grateful to my internal team here at Staffing Advisors who took the recession in stride and kept thinking of new ways to do more with less.  This was a year of radical innovation for us – we made substantial improvements in almost every area of the company – every single job changed, and some jobs changed dramatically.  Our talented people rolled with the changes, dealt with the uncertainty, quickly learned new skills, and implemented new processes without missing a beat.  Thanks to them, we’re racing into January running at full throttle - busier, more capable, and far more efficient than ever before. 

But what we did pales in comparison to what some of our clients did.   Our clients are literally changing the world, and we’re humbled and honored to do what we can to support them.

As we close out 2009,  I’m particularly grateful to all the courageous people who bravely moved forward on bold new initiatives, strong hiring managers who pulled the trigger on big hiring decisions in the face of uncertainty, decisive executives who revamped their entire executive teams and made unbelievably hard decisions in order to better serve their customers and and keep their organizations strong.  

Seth Godin recently wrote: “You don’t find customers for your products. You find products for your customers.”   And that’s exactly what fuels our innovation, what excites us about our work and what makes our work satisfying – helping you succeed with your bold initiatives. 

So before we race into 2010 I just wanted to pause a moment to thank you for all your inspiration. 

Why Do Change Agents Often Fail?

As the recovery begins to take shape, CEOs are increasingly optimistic and forward thinking.  As new initiatives are unleashed, it’s very tempting to want to bring in someone who will “shake things up” or be a catalyst for change.  It’s also very risky.  Studies show that up to 70% of change initiatives fail. 

So why does change take so long to unfold and why do so many change agents fail?  Because as researcher Jeremy Dean writes in Psyblog,  it’s hard to influence a group as a new person.   In fact, a recent research study showed that change agents “commonly face increased negativity and outright rejection” from groups they are attempting to change, no matter how diplomatically they introduce their ideas.   The research shows that jumping in and trying to make a splash with new ideas is a very poor strategy.

“Groups are hostile to criticism from newcomers and are likely to resist, dismiss or ignore it”  … until the newcomer first proves their loyalty to the group.

 Jeremy outlines the 10 Rules That Govern Groups.  Among the rules are these:

•  Group norms are very powerful, changing behavior in unexpected ways, and breeding conformity.
• People who do not “learn the ropes” are ostracized.
• Leaders gain trust by first conforming to group norms, and then introducing change that others would willingly follow.

That sounds pretty slow to me.  But if that approach is too slow, and jumping in with new ideas is even less effective, then what is a clever change agent to do?

If you are trying to change group behavior, research on the Neuroscience of Leadership suggests than instead of simply transmitting your own ideas to your employees, a far more effective approach is to focus team members on the desired results and then getting the team to focus on their own insights how to achieve the goals.  As author David Rock and Research Psychiatrist Jeffrey Schwartz recently wrote:

“Attention continually reshapes the patterns of the brain … People who practice a specialty every day literally think differently, through different sets of connections, than do people who don’t practice the specialty. In business, professionals in different functions — finance, operations, legal, research and development, marketing, design, and human resources — have physiological differences that prevent them from seeing the world the same way.”

That’s right.  Research shows that concentrating attention on a mental experience, over time, literally creates physical changes in brain structure. 

Therefore, an effective leader will concentrate attention using a solution-focused approach, introducing questions to help teams focus on identifying and creating new behaviors.  Over time, the continual focus on new ways of thinking will create an environment where people have their own insights, and with a bit of positive reinforcement, these insights will change not only how people think short term, but will also create lasting changes in their perceptions. 

Literally rewiring the brains of your team.  Powerful stuff – that’s clearly a power to be used for good or for evil.

Never Doubt Your Ability to Change the World

I am inspired by people who take on the impossible. It’s why we love to serve entrepreneurs and nonprofit leaders.   I’d like to tell you about one of our clients today.

Anthropologist Margaret Mead once said:

“Never doubt that a small group of thoughtful, committed citizens can change the world.  Indeed, it is the only thing that ever has.”

In 1983, a report called “A Nation at Risk” warned about the “rising tide of mediocrity” in American education.  Yet there remains a huge achievement gap between the US and other countries.   It’s not only a moral outrage, it’s economically disastrous.  A recent McKinsey study just calculated the cost of that failure.  The lost productivity costs the American economy trillions of dollars every year.  Trillions of dollars in GDP is an incomprehensibly large amount of wasted human potential.. and a bigger moral outrage.

In 1998 a group of thoughtful, committed citizens decided to do something about public education.  And they weren’t going to tinker around the edges, or start with something easy.  They were going to solve the toughest, hardest, most unfair part of it – they wanted public education to work for everyone. Everyone.

So they opened the nation’s first urban, public, college preparatory boarding school.  Their innovative model combined a rigorous academic program with a nurturing boarding program that teaches life skills while providing a safe and secure environment for the students.  The SEED schools provide disadvantaged, at-risk students a pathway to success in college and beyond.  They do not select their students – it’s open to everyone. 

So how did that audacious experiment in public education work out?

This week President Obama came to the SEED School of Washington to sign the National Service Act.    You can read more on the White House blog, but in his remarks, the President said:  “This school is a true success story, a place where for four of the last five years, every graduate from the SEED School was admitted to college. Every graduate.”

So, like I said, never doubt your ability to change the world.

What is The Value of a College Degree?

When I meet with a client to discuss a new search, I ask a million questions.  “What does success in this job look like a year from today?”  “How will you measure it?”  “What are the toughest challenges the new person will face on the job?”  “What will they need to be really good at, to drive results?”  And on and on.  My goal is to get an “action hero” movie playing in my head, starring … the person we need to go recruit.   But somewhere toward the end of the conversation I also look for strikeout factors – things the client would never consider in a candidate. 

And often clients rule out people who have not earned a 4 year college degree.  

In fact, this table of unemployment rates, shows the huge disparity in unemployment rates between high school grads and college grads.  And the recession is just widening the gap.

At the risk of appearing to be an idiot, I often ask clients why they want a degree.  The answers can be really fascinating.  Because a degree is usually a proxy for something else – like “polish” or great communication skills or the ability to follow-through on a difficult task over several years.   Yet we all know college grads who lack all those attributes, and many people without a degree who have all those attributes in spades.  So personally, I’d rather go look for those attributes specifically, and skip the whole “degree as proxy for something else” conversation. 

But it’s not as simple as that.

While some people don’t learn from any experience, I think a 4 year degree can provide a unique learning experience that is critical to success in many “knowledge worker” jobs.  A 4 year degree often exposes you to people who did not grow up in your hometown. People who do not share your values.  People who may challenge your thinking in areas you never really thought about before.  A good curriculum would ideally expose you to courses in a variety of disciplines you never had to think about before.  Ideally you get out of your comfort zone and begin to think about a wide range of issues - and learn to examine problems from a variety of perspectives. 

In college you have a unique opportunity to not just acquire knowledge, but to learn new ways of thinking -  and this is directly relevant to thriving in today’s turbulent environment.  Business guru Jim Collins says turbulence is the new normal - today’s business challenges will test your assumptions, challenge your thinking and demand innovative solutions. And few things can prepare you for that like a good college education.

I’m not saying college is for everyone, and I recognize that for many people it is simply financially unattainable.  But what I am saying is this:  while some people don’t learn from any experience, nobody can learn from an experience they never had.

So how are you learning how to thrive in turbulence?

Inspiration for Innovation

Alongside the steady drumbeat of bad news, there has also been renaissance of articles to inspire the leaders of small organizations.  Here are a few of the most relevant:   

Peter Bregman says small companies have a huge advantage in this economy.  Not just a competitive advantage, but an advantage in being able to fully engage their employees and build trust with their customers.

“We simply don’t trust companies anymore. We trust people. And in big companies, it’s hard to even find a person to trust as we scream “operator” into our telephones only to get transferred to another menu whose options have changed.”

 John Baldoni says you can Frame This Crisis to Your Advantage.

“Crises provoke disruption. Savvy executives can use them to their advantage to effect change within the organization. The challenge is to frame the crisis as an opportunity, not simply for the executive but for the organization as a whole. In fact, with the organization in flux now is the time for those in the middle, or even on the front lines, to rise up and prove their mettle. . . . Stasis is the enemy of progress. Since crises upset the status quo, there can be opportunities to develop newer and more resilient organizations. There is another benefit to crises as well — working toward change takes employees’ minds off the uncertain future.”

In another article, John Baldoni argued that GM CEO Rick Wagoner failed to lead in 3 key ways.  He did not shake up the go-along-get-along-status quo culture, he did not demand tough solutions, and he did not act with urgency.

Rosabeth Moss Kanter argues Why Rick Wagoner Had to Go.   He was an incrementalist, when GM need transformational leadership to survive.

“Even when executives who presided over a period of decline admit mistakes, it is nearly impossible for them to stir up the organizational energy needed for a turnaround. Those failed leaders symbolize the weight of past losses. People tend to interpret their actions as self-justifying, chosen to rewrite past history. After all, if the old CEO had wrong ideas in the past, why should people believe he or she has the right idea now? For GM’s Wagoner, as the problems got worse, the loss figures got bigger, and little else appeared to change, his credibility slipped into the negative zone too.”

With all this talk of innovation, how do you know if your leadership team is ready to innovate?

The Leadership Acid Test

By now, every sentient CEO knows this is the time for bold action, for innovation, for challenging old assumptions and demonstrating leadership.  While many CEOs relish that challenge, few small businesses actually have the kind of management team that can really support innovation. 

Innovation simply demands a very different kind of leadership than the ”caretaker” leaders found in many smaller organizations. So how do you know if your team is up to the challenge?   Don’t listen to what they say – everybody is talking the innovation game now.   As my old boss, Steve Ettridge used to say… “turn off the sound and look at the picture.”

Here is my leadership acid test:  Is your management team taking bold, innovative action in the face of the economic downturn?  Are they measuring performance, holding each other accountable, and humbly adjusting course as they find (and tell you about) mistakes?

Or are they blaming circumstances, battling internally, and jockeying for position?  Look at your grapevine, are rumors increasing?   Are people knocking on your door to ask about their careers?  Do you feel like you are choking on increased gossip, fear, blame and paralysis?

Let’s be honest, nobody knows exactly what to do right now.  Nobody has perfect information.  But by now, most organizations are mobilized and taking action.   Some will succeed, many will fail.  

I see organizations sorting themselves into two tribes.  The first tribe is the cohesive, well managed innovators.  They are cutting fat carefully, and directing time and money into the future initiatives with the most promise.

The second tribe is the circular firing squad.  Slashing the good right along with the bad, at war internally, and they will probably not survive the downturn to emerge as a viable entity.

Here are the signs of a cohesive, innovative leadership team:

• Your team regularly challenges your thinking, makes you a bit uncomfortable, tests your assumptions and suggests new ways of looking at old problems. When you share a new idea, it is greeted with enthusiasm and “Hey, that could work if…”  instead of “That will never work, I don’t have time, or I don’t have a budget for that” or worse, people SAY they will take action, but do not.
• Your management team has specific, measurable, metrics to monitor their results and each individual on their team knows exactly what is expected of them.  People “own” their mistakes and failures and team help each other but also hold each other accountable for results.  Information is shared, everyone knows what is going on – even bad news is shared openly.
• You see an increased cohesion in the team – pulling together, and setting aside petty grievances, celebrating small victories.
• You are frequently surprised to hear of their decisions and results – they did not talk about doing it, they just quietly set about doing it.

And here are the symptoms of a circular-firing-squad leadership team:

• Your managers do not have firsthand knowledge of the issues your customers are experiencing. 
• Your managers come up with ”ideas” but rarely prioritize and take committed action on the few things that really matter.  Everyone is an expert in what won’t work, but nobody sticks their neck out for an idea that might work.  Meetings are unproductive talk-fests.
• Your managers are surprised by fairly predictable external events and worse, did not have a contingency plan for dealing with those surprises.  (Hope is not a strategy)   Communication is often poor and decisions made hastily.  Externally their actions look erratic, irrational and unfair. 
• Your managers do not have a firm grasp of the metrics that predict future performance.   They do not have “trigger points” identified to take action.  (“If sales fall below X we need to layoff 3 people”)
• Problems land on your desk without any hard analysis or suggested action plans.  People whine about problems without taking ownership for getting results despite the obstacles.  You feel like you need to make too many decisions “below your pay grade.”
• Most telling – you feel like you cannot trust their judgment.

If you have the circular-firing-sqaud team, you need to admit that you hired most of these people, and you let their performance deteriorate into what you have right now.  Now all you have is false promises, delay, failure, excuses, blame, and really poor information to make critical decisions. 

Instead of having a team who can innovate their way out of the downturn, all you can do is pray for the end - you cannnot outperform the market – in fact you will probably be viewed as a meal ticket by your better organized competitors.

Why Innovation Matters

Do more with less – recessionary words to live by.  Of course, that’s nothing new for small and midsize organizations.  When times are good, costs tend to creep up a bit, in lean times you cut back a bit.   So what is the smart money doing right now?  The really smart organizations are cutting costs through innovation, and not simply cutting costs.  And while those phrases may sound similar, they are the difference between lightning and lightning bug. 

I work with a lot of entrepreneurs, so you might notice that I reference innovation frequently in my posts.  So what are some innovative ways to cut costs?   For one, I’m seeing a renewed interest in outsourced services as companies work to turn fixed costs into variable costs.   Where it once made sense to hire an IT manager to support your growing staff, it might make more sense now to outsource IT support to an external vendor.  Where you once might hire an HR Manager, today you consider outsourcing HR instead.  Companies everywhere are reexamining old assumptions, revisiting old ways of doing things – open to new ideas.  They are innovating.

Business to Business (B2B) purchasers “want it fast, right, cheap and easy” (which is on the path toward the mantra of our age – “perfect, free and now”).  Innovation expert Stephen Shapiro calls this the Innovation Bell Curve.  Value Brands with good quality are displacing mid-market brands. 

In recessions, lower cost competitors often earn greater profits.  Wal-mart grows, but luxury brands are hurting – even discounter Target is taking a hit as consumers pull back on unnecessary spending.    McDonalds is doing just fine as people trade down from more expensive restaurants.  Wal-mart and McDonalds are not slashing costs and staff to survive, they are already designed to make a profit at a lower price point.

To speak from my own experience, Staffing Advisors is an innovative low cost alternative to traditional search firms – the Southwest Airlines of Staffing – we are built to make a profit at about a third the cost of a traditional search firm.  Consequently we are very busy right now, as busy as we were last year.   Similar to Southwest, our competitive advantage is “fast, right, cheap and easy.”   Even in a downturn there is still an enormous need for third party recruiters  – staffing is a multibillion dollar industry.

By innovating – literally inventing a new way to deliver search services – we have been able to keep costs low, serving clients who want an alternative to using a full-fee agency (and today that’s almost everyone) but more importantly, we are also able to serve companies who would never consider using a full-fee search firm – a massive and untapped market for search services.    In fact, more than half of our clients have never used a full-fee search firm, even in good times.

Our more expensive competitors  – because they did not innovate  - cannot compete in our markets and cannot cut their prices to our levels and still survive – their process is simply not designed to work that way.  

So yeah, innovation matters.  As Steve Shapiro says:  

“Exercise grows muscle while burning fat.  Innovation is exercise for business.  It helps grow the organization while also enabling cost efficiencies.”

So tell me, what are you doing in your job and in your organization to innovate your way out of this recession?

Small and Midsize Employers Lead Innovation, and the Recovery

The secret of great entrepreneurs is “Smarts Guts and Luck” according to a recent article by venture capitalist Tony Tjan.  As he puts it, his “central philosophy” is that “human capital trumps everything else . . .  it is all about the people, and we would take a B business plan with an A team over an A plan with a B team any day.”

In a recent survey by Intuit, 9 of 10 small business owners see opportunities for their business despite the recession.   In the “Future of Small Business Report” the authors note that “With no large corporate fortress separating them from the marketplace . . . small businesses rely on an almost instinctive muscle memory approach toward innovation to survive and thrive.”  As business guru Peter Drucker puts it:

“Innovation is the specific tool of entrepreneurs, the means by which they exploit change as an opportunity for a different business or a different service.” 

The Boston Globe ran an article entitled “Innovation may fuel economic recovery.”   They quoted George Colony, the CEO of Forrester Research as saying “It’s obvious that the new economy – whatever we’re going to emerge into – is going to be built by the innovation that will emerge during this recession.” 

In a recent survey, the Boston Consulting Group ranked the US second among large large countries for manufacturing innovation (and 8th overall). 

Unfortunately I find that most small businesses are chronically underserved when it comes to recruiting people who can drive innovation and results.   For this reason, I’ve written extensively on the need for search firms to innovate.   In a post on “The Outlook for Recruiting” on  ERE, Raghave Singh reached a similar conclusion.

 ”…much of the growth in jobs is expected to occur in small and medium-size businesses that have no need or cannot support full-time recruiters. An increase in needs for sourcing, as opposed to full-service recruiting, will occur as employers seek to minimize costs.”

While I agree with many of Mr. Singh’s points, I disagree that growing enterprises will have to settle for less than “full service” recruiting.  I’m convinced that search firms will either learn how to meet client needs at a price they can afford, or they will cease to exist.   

One thing is certain about innovation -  after the recovery, the world will look different.   So what are you doing right now to make it different?