The New Normal has morphed to include consequential elements of a “stable disequilibrium.” Be sure to stay close to the market realities and understand the probable scenarios, says Mohammed El-Erian, CEO of PIMCO, who coined the idea of the New Normal following the Financial Crisis of 2008.
Stable disequilibrium sounds pretty heavy to me, and thinking about the consequences of continuing disequilibrium is an unsettling thought. But there is a new reality in managing investments and businesses.
PIMCO’s CEO warns that to navigate with any success in the current environment, investors need to shift away from conventional views, solutions vente parcours obstacle gonflable and practices; they must deal with outdated assumptions, strategies and benchmarks. Every business leader needs to take this warning seriously.
The New Rules
Amid economic uncertainty and an environment of transformative change, expect to see an acceleration of non-traditional business strategies, career moves, and innovative ecosystems. Success requires speed, collaboration, innovation, engagement, and a business culture that motivates everyone. While six percent of the U.S. workforce was categorized as freelance in 1990, the number is now 20 to 30 percent.
We’ll see less focus on Ivy League degrees, and more attention to personal capabilities and passions, and doing “good.” And despite populist talk about corporate greed and heavily compensated CEOs, there will be a greater appreciation for the leaders and leadership throughout the private sector. Well-defined career ladders and rigid hierarchies are becoming passé. In just a few years, your businesses or products could be dramatically different requiring different mindsets, skills and relationships.
This flexibility and forward thinking were rare 10 years ago. The CEO of a Fortune 10 company told me that he was deeply concerned that his marketing heads were promoting a woman in marketing research into a coveted position in marketing. The decision shattered a long-standing intentional division between two silos – the geeks in research and marketing strategists/business leaders with P&L responsibility. Now with a chance to cross the line, this new leader would be a contender for president of a major operating division, if successful.
It’s a very risky move, he said. But his discomfort was more about the woman’s age than her capability to do the job or her femininity. She was already 37, and in an up-or-out company, how could she compete with men in comparable jobs who were five to seven years her junior? “While it might be an altruistic decision, our management is doing her a disservice.”
Well the research geek adjusted to her new environment and performed extremely well. Of course this should be a silly conversation today. The thinking and rules are different; many of the conventions and biases of “yester-year” are no longer relevant. But too many businesses are still relying on outmoded assumptions, solutions and practices. Their strategies – business, human capital or otherwise – aren’t worth their investment in the graphics used to showcase their grand plans.
Then there’s the issue of doing good. It’s so important that Havas’ CEO David Jones says, “If you don’t have honorable motivations for doing good, at least do it to avoid getting taken down, because at a time when social media has broken down any last walls between brands and corporations and consumers, bad practices have nowhere to hide. So the new rules for marketing, he said, are the same as the rules for social media: transparency, authenticity and speed.”
Today we need and expect a flexible, more open CEO. The old stereotypes and mental models are getting creaky and creepy. The story of David Karp, CEO of Tumblr is one example. Karp never graduated from high school, yet alone Harvard – dropping out “to live his passion, which was all things computers,” says his mother. Now thanks to the Tumblr/Yahoo deal, he’s almost a billionaire. Another refreshing insight: Karp is an introvert, and doesn’t try to hide it. But it’s conventional wisdom that most leaders are extraverts.
Focused, innovative organizations are not built around pep talks and spin. When people are skeptical or disengaged, they often feel powerless. They are probably operating outside the circle where decisions are made; constrained or underutilized because of the rules or culture. Disengaged employees can also be on autopilot, getting the work done – with little insight into why, what’s involved, and afraid to suggest an alternative or to ask, “Is this approach the best way forward?”
Your teams are more likely to “lean into the business” when they feel ownership for decisions, future strategies and plans. Ask yourself if the optics of leadership are helping or hurting morale in your business. We’ve seen skeptical, even dysfunctional, organizations rebound quickly once employees and managers have access to critical information and are able to engage in an honest dialogue with members of the leadership team.
David Jones, David Karp, Havas, Mohammed El-Erian, PIMCO, Tumblr