Tuesday, January 8, 2008

Thought leadership - Leading your business to innovate and succeed

Here's to the crazy ones, the misfits, the rebels, the troublemakers, the round pegs in the square holes... the ones who see things differently -- they're not fond of rules... You can quote them, disagree with them, glorify or vilify them, but the only thing you can't do is ignore them because they change things... they push the human race forward, and while some may see them as the crazy ones, we see genius, because the ones who are crazy enough to think that they can change the world, are the ones who do.
Steve Jobs, Founder of Apple Computers Inc.

Thought Leadership

Traditionally leaders define and set course for change to happen. Generally if you go high enough the decisions boil down to one person, the leader. We know leaders have certain characteristics courage, commitment, vision and so forth, but as the business world grows more mature, there is an added focus on ‘thought leadership’. Leaders today need to be futuristic, forward moving, courageous and focus on innovation.

Today our workforce is more specialized, better equipped and more trained than ever before. Twenty years ago an employee may have just been hired to complete their ‘to do’ list and be done. Today professional services firms, consumer goods companies, banks, and any other sector you can name pays their people to do one very private function ... to think!

Leaders must not form a team of blind sighted followers but an intelligent, evolving team of leaders, who have the freedom to think beyond now. After all, we all are leaders ….we have at least one person to lead….our self.

While leaders define the direction, those who follow also define the leader. The quality of people a leader is able to retain within their team has a direct impact on the quality of output produced. This is not just true for businesses, it is also true in governments, political campaigns and life in general.

Hell, there are no rules here-- we're trying to accomplish something. – Thomas Edison.

This is the age of innovation, now that management has officially been named as one of the sciences, innovation too is fast moving from an abstract art to a defined science. Innovation and leadership go hand in hand. Without futuristic, forward thinking tone from the top, it’s hard for any business to innovate. Breaking free from their past often plagues’ otherwise usually successful businesses. In a flat world, keeping outside forces from influencing research and development is becoming increasingly difficult and detrimental to growth.
More often than not, we still somehow try to fit everything we see in a box. Categorize it for the sake of remembering it, assigning it a label in our mind But what about the ideas and thoughts which haven’t been labeled yet?
As services and products, and deliverables in general get more customized, there are very few rules which can not be challenged. There is very little room for that comfort statement that ‘it’s always been done this way’, that notion today, it’s unacceptable.

Any thing that matters gets measured. So innovation too should be measured and is being measured at businesses worldwide. Jorma Ollila, non-executive chairman of both Nokia and Shell, argues that it is a mistake to measure innovation by the number of patents issued by a company or the extent to which new technologies are introduced. He suggests that most the most fertile area of innovation today can be found in management. One reason for that maybe that creating an idea is the easy part, the transformation to a real ‘thing’ is tough. As Thomas Edison put it, genius is 1% inspiration and 99% perspiration.

Google claims that its constantly reinventing itself and googler’s proudly say that ‘Google is an innovation engine, not just another search engine!’ the company grants its engineers with permission to spend 20% of their paid time on pet projects unrelated to their daily job.

Open innovation has been talked about for decades. Professor Henry Chesborough, a business professor at the University of California laid out the very foundation of open innovation in his books ‘Open Business Models’ and ‘Open Innovation’. He argued that companies need to be open to change, no matter where it comes from. Large scale R&D labs may not be the answer for all innovation, companies need to think faster, and get all the help they can to get the answer right …very early on.

P&G is a good example of a traditional company which for decades guarded its research and development activities carried out in CIA style secrecy, all the innovation came from within. No more. P&G now welcomes ideas from the outside and works on a profit sharing model for innovation, encouraging participation. In less than a decade P&G has increased the proportion of new-product ideas originating from outside of the firm from less than a fifth to around half, its bosses indicate that it has also grown at a 6% annual rate every year from 2001-2006., tripling annual profits to $8.6 billion.

While all this is encouraging, argues Harold Sirkins in his book ‘Pay Back’ that firms are jumping on the innovation bandwagon and are in-turn creating a bottle neck of ideas. He suggests that its critical for companies to recognize and separate the ideas which may work from those which would not, very early on. Businesses will have to become efficient, and faster in recognizing the idea which is worth working on. The race has already begun.

Tuesday, December 4, 2007

Save your business - The time to act is now

A friend of mine works for a large computer hardware manufacturer in Pittsburgh, Pennsylvania. He is tasked with overseeing the regional sales and is responsible for a team of high performing young sales associates. He called me the other day, exasperated, ‘Do you know what happened today?’ without waiting for me to ask the ‘what!?’ question. He shot through, ‘Cindy, quit! She was my highest grossing salesperson, she just got a raise and was even up for promotion’ he said. When I asked my friend why Cindy had left, he said that the company had denied her a flexible work arrangement, even though she had made plan (met her sales target) consistently over the past two years. ‘I argued as much as I could with the Directors’, he said ‘but they simply won’t budge with the rules are rules speech, we can’t allow people to leave a 3:00 PM 3 times a week and work from home, it just won’t work here, they had said’ he explained. ‘So today she resigned, just like that! I have lost 4 of my top people this year, 3 of them were women’, he continued ‘if we continue like this, I assure you, we will be in the red and stay there too’.

This was not the first time I had heard a story like this. Over the years, many of my clients have shared similar experiences about loosing their ‘key people’ often women, and sadly for ‘fixable’ situations. I noted that this trend is not industry specific as well. Large private equity firms in Manhattan’s financial district, health sciences companies in Pennsylvania, aerospace manufacturers in California, and insurance powerhouses in Connecticut are some of the first hand accounts of this much larger ‘think small, get smaller’ management dilemma which I heard first-hand, often from mid to top tier management.

I had known the questions, but most of the answers came from within the industry as well, much of the information included below is thanks to Cathy Benko’s work in her book ‘Mass Career Customization’.

Cathy Benko is the National Managing Director of the Initiative for the Retention and Advancement of Women. She joined Deloitte Consulting as a consultant in 1989. She is currently the lead Deloitte Consulting client service partner for Sun Microsystems.

For today's visionary business leaders, Cathy Benko's ground breaking research in her book 'Mass Career Customization' is a must read. I thought it would be useful to share the details of her research with you, if in case you were wondering what should be the next steps for you to save and grow your business. In 1950, 63 percent of U.S households had a husband in the workforce and a wife who was not. Fast forward to 2006, now only 17 percent of U.S households have a husband in the workforce and a wife who is not. Imagine that! 83 percent of U.S households are now considered 'non traditional' work arrangements. Based on recent and projected birthrates, including anticipated rates of immigration, the U.S economy is projected to grow only 4 percent between 2010 and 2020 and a meager 3 percent between 2020 to 2030, compared with 12 percent in this decade.

These statistics equate to an anemic annual growth rate of 0.3 percent, compared to more than 1 percent today. So, women have come a long way since the 1950's, and hopefully businesses soon will too. If you are wondering that women are the only ones driving this change, consider this. Recent studies involving men of generation X and Y suggest that men have had enough. More men are whining now, they complain that their highly demanding careers are not so fruitful after all; they want a life for themselves outside of work too. Success in workplace is not always reflected in their personal lives and they are increasingly dissatisfied and unwilling to make substantial sacrifices on the home front and rightly so.

Employee turnover is about 15 percent in many industries and about 30 percent in the consulting industry. These turnovers are a huge over head for the employers, because such staggering costs are diluting the employer’s bottom line.

Over the past twenty five years women have composed more than 50 percent of college graduates in United States. Of course there are age old beliefs of women being inapt for science disciplines, but numbers suggest otherwise. In 2006, 16.1 percent of degrees awarded to women were in the science disciplines, compared to 15.7 percent of science and engineering degrees awarded to men. Today, more than 60 percent of all U.S college graduates are women.

Women are also out performing men in college, graduating with better grades and more honors. Women now represent over 50 percent of those receiving master’s degrees. With respect to professional degrees, women now compose half of all law students, close to half of medical students and over 40 percent of MBA’s. Women are projected to account for 51 percent of the increase in total labor force growth between, 2004 and 2014.
So, I’d imagine that it would be better for all businesses to adapt to this changing workforce as quickly as possible. Businesses must take a second look at their work force; ask them what they need to be happy. The results maybe surprising as most of the commitment survey’s indicate that its often not just money, it’s the conditions under which people work which makes them love or hate their jobs, the precise distinction between keeping or changing their employer.

If businesses want higher retention rates, lower turnovers, lower overheads and continued growth, they need to keep their people happy. Work out arrangements and take time to plan programs which help their people and the business succeed together. Businesses everywhere need to learn to collaborate with their employees faster, for without their core employees business would have fewer customers and fewer means to stay in business. Remember, no one wants to leave a good job unless it becomes increasingly incompatible with the life they want to live.

Thursday, November 29, 2007

Listen Up!

The 50% rule

As a young broadcaster some 10 years ago, I attended a broadcast communications training workshop in Islamabad. Two and half days later, I recall walking out of the federal capitol training center with some life changing advice. I had learned the 50 % rule. The instructors had come and gone, but one of them had said something invaluable, ‘listen’, he said, ‘you have two ears and one mouth, so you should be listening at least 50% more than you speak’.

As I started of as a boyish radio D.J doing morning radio shows on FM-101, one of the first advice I got was from my father. ‘You speak too much, you know, and now you are also getting paid for it! just remember, if you want to be successful, you need to know when to stop speaking, listen more and speak less, else you will run out of things to say quickly and no one will listen to you’. I remembered that.

Gone are the days of radio. I moved on and out of the world of air waves at least temporarily, even the National Broadcaster’s Excellence Award of 2000 didn’t stop me. But what I took with me were the lessons that changed things and my view of them thereon. I have developed my personal set of rules, for life in general and for communications in particular. No, this is not another one of those ‘father knows best’ sermon, nor is it the greatest key to success, what it is, is however a compilation of lessons learned thus far, a sort of a running ‘cheat sheet’ if you will. After all, nothing is interesting, if you are not interested.

How many times have you been misunderstood, or not understood at all, today, this week, this year? Do you feel that communicating is not one of your biggest strengths? Think again, we all start off the same when we are born, we communicate when we are hungry, when we need to be changed, when we want attention, and also when we want to be left alone to go to sleep, and don’t forget the first thing a baby does after being born….a loud cry to let the world know of the grand arrival! we humans are born communicators.

Even socially, the ‘close’ and ‘open’ signs on stores, the turn signals in your car, the telephone, the chain email, all are tell tell signs of our zealous efforts to communicate freely and effectively. So then, why is it so strange that most of the issues and challenges we face at work home and otherwise are related to communication?

It takes two – atleast two

Inadvertently most of us forget the basic principal of communicating, it’s a two way process. Remember hearing the ‘public service’ announcements? Or the ranting speeches of an opposition leader or the pompous, ‘me myself and I’ speeches of sitting head’s of State? Often, these are just statements of personal opinions, not necessarily a dialogue between the speaker and the audience.
Do you think, anything is achieved by simply blurting out what’s on our minds?
The mannerisms and ethics of communicating is just as important as have a message to communicate.

Completion Indicators – Take turns to speak

The first computer modems were called the ‘half duplex’ communicators; these early modems could just receive or transmit data at a time, but not both simultaneously. In order to work better, the modem’s used ‘completion indicators’ when the transmission was complete, a signal would be sent by the receiver to the sender to indicate completion or receipt of data, only then the next ‘communication session’ would start. This pattern of communication was based of the ideal situation in the human communications, that is, to take turns to speak.

During a conversation, or a negotiation, progress can only be made if both sides are given an equal opportunity to speak their mind.
Humans have been using language and accompanying norms to communicate for thousands of years. However, we still see that often, we override this norm to interrupt, prematurely abort and overtake conversations. I have seen this in meetings, in social gatherings and more so in conference calls and phone conversations. The physical absence of the two sides, face to face, reduces the reluctance to override a conversation.
So if you want to effectively understand and communicate well, you need to listen to the other person. Hold on to your thought, take notes if it helps your memory, but do not cut off someone in the middle of the conversation.

The difference between hearing and listening

So what exactly is hearing, according to the modern English dictionary, hearing is to ‘perceive by the ear’ while listening on the other hand is ‘to give and to pay attention to’. While one is a physical involuntary function of the ear, the other is a mental, cognitive, and voluntary function. You listen only if you choose to, else you can hear all you want and make no room for it in your mind.
So, why do we choose to listen? Perhaps we listen to learn, to find out more or to explore what we don’t know yet.

(The following is an excerpt from a cognitive psychology journal, and therefore really boring, read only if you are not convinced that there is a difference between hearing and listening, otherwise move to the next topic)

Dichotic listening procedure – borrowed from cognitive psychology
This is a procedure often used to investigate selective attention in the auditory system. In dichotic listening, two different auditory stimuli (usually speech) are presented to the participant simultaneously, one to each ear, normally using a set of headphones. Participants are asked to attend to one or (in a divided-attention experiment) both of the messages. They may later be asked about the content of either message.
In a selective attention experiment, the participant may be asked to repeat aloud the content of the attended message, a task known as shadowing. It was noted by a renowned psychologist in the 1950’s, that people recall even the shadowed message poorly, suggesting that most of the processing necessary to shadow the attended message occurs in working memory and is not preserved in the long-term store. Performance on the unattended message is, of course, much worse. Participants are generally able to report almost nothing about the content of the unattended message. In fact, a change from English to German in the unattended channel usually goes unnoticed. However, participants are able to report that the unattended message is speech rather than non-verbal content.
Pay attention to the silent cues
Often how things are said, are just as important as the content itself. Deloitte has training for Auditors, where they bring in former FBI agents to discuss questioning methods. The FBI agents explain that they often have two agents interviewing one person, there is one who takes notes and the other just observes the body language of the respondents. How people respond to questions is often more important than what they are saying.

Don’t take things at face value alone, people find it difficult to say no, but how they say things are often a pretty clear indicator of what they mean. Don’t wait for someone to come out right.

Summarize and confirm
Learn from the King, Burger King! Or for that matter, any fast food drive through window attendant, once you have placed an order for a medium chicken sandwich, with fries and soda. The attendant is keen to repeat your order, and verify if that was in fact what you had wanted. Too often, in our conversations, we forget to verify if we were walking away with the right idea. Our mind auto summarizes what we think was the message. If you don’t confirm what you believe was the intent of the discussion, too much room is left to ambiguity, try and avoid that.

Sunday, November 25, 2007

Becoming the real you: Top five considerations

The part I enjoy most about my job is the opportunity to interact with a diverse group of very interesting people. During one of these interactions I ran into a young, recent college graduate, he was a smartly dressed intelligent fellow. He looked like he was ‘in charge’ and resonated a certain sense of responsibility. I asked him what exactly he did at this very large organization, a leading financial services firm on Wall Street, ‘I’m a partner (co-owner) here’, he said with a smile ‘I’m just not yet promoted!’

A few years have passed since then, and surely enough, that person is well on his way to becoming a partner that is simply because, he thinks and acts like one.

Countless books have been written on self assurance, on how to develop ones self into a leader, a thinker, a winner and more importantly a collaborator, but time and again we come across mostly the ‘its not my job’ people rather than the ‘this needs to get done’ people.

In the last decade, we have steadily moved away from the notion of ‘life time employment’, to ‘life time employability’. The latter is more need driven, requiring upgrading of skills frequently, adapting and assimilating. While this behavior is generally fruitful and rewards are more generous, the consequences of not adapting fast enough are down right horrific.

Since more of us now need each other, more than we did a decade ago, you would think the professional dynamics, the manner in which people do their jobs, would have also followed suit, right? Think again.

One reason for that is because our schooling system is designed for producing workforce for hierarchical, bottom heavy pyramid like organizations. However the modern businesses and their very survival often depends on shrinking this gap between the divisions, bringing them closer, sharing information faster and acting on it before anyone else does. Now, more than ever is a need for the right collaborators, who anticipate and evaluate the problems, assess and deliver solutions faster and cheaper.

We can and probably should discuss how things can be done differently, and how they are being done differently in some organizations, but today, I wanted to digress to a slightly different topic, one more immediately relevant to you. So, my dear reader lets explore how can you differentiate and better position yourself in today’s market.

When it comes to finding a better fit for your career, the wisdom often lies in asking the right questions. What is it that you offer in your roll today, and how can you build up on what you have now to get to a better tomorrow, quicker. For beginners, consider the following thoughts, remember these are just guidelines, feel free to improvise,

I) Organize your thoughts and communicate them too

You may have a heart of gold, but so does a hard boiled egg. If you can not present and execute your ‘greatest idea ever’ it will always remain just….another idea.

Communicating your thoughts, which is making others understand what you have in mind is as important as having a great point to make. As Patch Adams had once said, email is becoming work, as oppose to the original idea of an email being an ‘indication of work’. When you start structuring your email, keep in mind that it is a somewhat permanent record of your thoughts. Once your email is out of your outbox, you have very little control over it, so think it through and write as effectively as possible. Keep your audience and potential audience in mind, and don’t forget to spell check, nothing is a bigger turn off than a badly written email.

II) Make room for yourself by being a collaborator

Instead of waiting for an opportunity to come knocking at your door, try reaching out within and outside your organization for potential opportunities. Don’t be afraid to suggest improvements, especially in meeting and in team settings, too many of us get tangled in to the obscure world of ‘can not be done’ rather than exploring what ‘can and must be done’. No one person operates in a silo any more, you need people and lots of them to get things done. The better you are at coordinating between different groups, the better you can leverage yourself. Think how you can add value to any ordinary function, do things faster and better. How is this for an incentive? In the new world, the collaborators will be paid higher, and promoted faster than anyone else!

III) Find a mentor, and build the right alliances

Identify one or more mentor within and outside your organization. Find people with whom you can connect. Think about the big bucks your higher ups are making, often there is a good reason for their hefty compensations, as they are valued more. Consider this a free learning lesson, you get free access to their wisdom and power, if you can just build a connection with them. Often just the will to excel is enough to get you started.

IV) Ignore the advice from the guy in the next cubicle

Also important is to ignore any ill advice you may get from people at your level, remember if they were any smarter than you, they would be strides ahead of you. Often people are shy about making a contact or a connection within the workplace, with the fear of being picked on by their colleagues. If you want to lead, you need to step forward.

V) Be honest and courageous by being your own best friend

Being honest is the single most common and important trait in all great leaders, interestingly; honesty and courage go hand in hand. Effective leaders get rid of the fears early on. You need to have the stomach to make tough decisions and take somewhat measured risks. Honesty and the courage to do the right thing goes a long way.

No one is more sincere to you than yourself. Think about what you want to do, and ways on how to get there. Decide if you want to build a career or just have a job, there is a major difference between the two mind sets. The first being ‘destination driven’, and the latter being ‘destiny driven’. If you think that ‘luck’, makes every thing happen for you, consider staying at home for the remainder of the week and see how luck brings in your next pay check. Alternatively, if you believe in making way for yourself, you will find a way to make it happen.

Friday, November 2, 2007

It pays to be found: Get the job of your dreams to find you!

Things have changed significantly in the way people look for jobs, and how jobs are now looking for people. You know the drill, you need to have a profile online on one of the job sites, and if you are into a specific profession (chances suggest you more than likely are) you go on the job boards which cater to that industry, look up jobs and start applying! That should be enough right? …..wrong!!

Let me explain why.

‘I’m back on the market’, exclaimed a friend, referring to her renewed job search which initiated mainly from fears of expected layoffs at her present employer. I asked what her job hunting strategy was and she mentioned she had been mainly looking online at the job boards. However, she said, she never heard back from almost anywhere she applied. ‘I mostly get these automated thank you responses…..those which say that your resume has been submitted and will be reviewed, and I never hear back again!’.
She mentioned that it was mainly the recruiters who found her on the job boards, or in their databases which landed her with interviews.

The more I thought about it, the more sense it made, but just to be sure, I called up a friend who works for a major finance and recruiting firm. ‘We get a lot of junk mail’ he said. ‘It’s tough to go through thousands of resume’s and search for a particular skill, years ago we bought a software to include candidate’s skill sets, experience and other information, but what the software does not tell us is whether the applicant is still looking for a job!’. ‘So’, he continued ‘we’d rather go online or on campus, see who is really looking for a job actively and reach out to those candidates’.

We have had these job boards for a little over a decade now. Jobsite giants like Monster and Hotjobs have millions of profiles, often more than one for the same person. People often don’t update their profiles after finding the job, or access the job boards. These users are classified as ‘inactive’ in the system, based on the last log-in date. It is obvious that the inactive records are piling up.

Recruiters know that, so when they go looking for that perfect candidate, they want to make sure that the person in still active. How do they determine that? Often by looking at the last login and or profile update date. It’s important to be noticed to get an interview, but more importantly the recruiters need to know that you exist! So if you are looking for a job, or just feeling the market, go and update your profile, you will be surprised on how many new hits your resume will get.

You don’t even have to change much in your profile, while updating your work experience, certifications and skills makes sense, even if you just click on the update link with no changes, you will still show up as an ‘active’ user.

Years ago, while in graduate school, we once had a guest speaker come in for a talk. He was a partner at Accenture, ‘the irrefutable secret to finding a job is the number of new connections you make on a daily basis’, he said ‘you need to let the whole world know that you are looking, sooner or later your dream job will find you!’

Good luck with your search. May the best job find you.

Thursday, November 1, 2007

Professional Networking....more than a one night stand!

I remember attending a career fair at Carnegie Mellon University towards the beginning of this decade। There were hundreds of smartly dressed, intelligent looking graduated students, trying to strike a conversation with prospective employers. It was obvious that they were eager to get noticed and to make lasting first impressions. They engaged in conversations with a lover's zeal. More than anything, they wanted to almost immediately land a job with the company of their dreams.

Those however were tough times, Enron had just collapsed, the stock market was yearning for investor confidence and newspapers were filled with news of bankruptcies and layoff's. A vast majority of the recruiters at the fair were not there to hire. They were simply there to maintain their relationship with the University, or because they had paid in advance for their booths! it was depressing to be there.

Many of my peers gathered the career fair loot: a couple of oddly sized t-shirts, alligator clips, and few business cards, but no interviews। However I heard a recurring theme, almost all the recruiters had asked the students to email them their resumes। I was puzzled, how will the recruiters remember the students they had spoken with and had interest in compared to the others? Or will they just include their resumes in the often overlooked HR database for 'future reference'?

Fast forward 6 years। I'm not a recruiter by any stretch of imagination, however among other things I am now required to help recruit for one of those 'most desired companies' and voluntarily I advise graduate students on career advancement at a leading University. I often speak with students on their strategy for success and almost always networking is pretty high on their list.

Dictionary।com defines the term 'networking' as, 'a supportive system of sharing information and services among individuals and groups having a common interest।' Common wisdom dictates that networking helps to enhance, among other things, prospects of finding better career opportunities. Tools such as 'Linkedin' help prospective employers and employees connect. However how the networking phenomenon is generally perceived is no less than a nightmare.

Generally speaking, networking is often confused with the number of entries in your address book, or people you know, or may know off। In reality, networking is really all about developing dependable relationships with a group, or groups of individuals with whom you interact, in regular intervals.

It is of little surprise that the term networking is fast being replaced by 'professional relationship development' or simply, relationships. To over simplify, any relationship has at least two steps; step one is to develop a relationship, and step two is to nurture, which of course happens overtime. Like anywhere else, professional friends are developed by winning trust and by emerging as a dependable partner. Additionally, people are more likely to remember you, if you pay attention to what they have to say. As Cicero, once put it 'Friendship make prosperity more shining and lessens adversity by dividing and sharing it.'

The nature of relationship and the frequency of contact are just as important as having a relationship itself. Often informal interactions and discussions lead to meaningful opportunities. How people interact in casual settings is a big indication of how they will deliver in business settings. In any social setup, and particularly in the capitalistic society in which we dwell, our gains are directly proportional to the value we offer to others.
Human aspect is at the core of the modern services oriented marketplace। How well do you know your peers, your co-workers, your neighbors? Do you know their interests, and ideas? Do you remember details of their personal life? Do you know their current professional opportunities, challenges and accomplishments and are they comfortable discussing them with you?

So go ahead, send out a couple of emails to long lost friends, clients, colleagues, or pick up the phone and call folks you haven't reached out in a while and tell them you were thinking of them and wanted to connect. It’s never too late to start building a bridge, and you never know where life might take you next.

What am I really worth today?

For most of the American workforce, compensation revision time has come and gone. USA Today reported the average adjustment this year at 3.8%. Whether that’s good or bad, or simply irrelevant depends on certain factors.

why do we get raises anyway?

Pay raises mainly happen for a couple of reasons. One reason is to retain good employees; people who help earn the money. Another reason is to adjust salaries based on inflation rates. Raises are generally slightly higher than the inflation rate for that year, therefore minimizing the adverse effect of inflation on net gains. In 2006, the average inflation rate was at 3.24%

Year -- AVE Inflation
2006 -- 3.24%
2005 -- 3.39%
2004 -- 2.68%
2003 -- 2.27%
2002 -- 1.59%
2001 -- 2.83%
2000 -- 3.38%
1999 -- 2.19%
1998 -- 1.55%
1997 -- 2.34%
1996 -- 2.93%

what is inflation?

Generally speaking, Inflation is measured as the growth of the money supply in an economy, without a commensurate increase in the supply of goods and services. This results in a rise in the general price level, as measured against a standard level of purchasing power. To over simplify, when demand exceeds supply, the prices increase, leading to inflation.

me and my co-worker have identical jobs, how come my-worker got a higher raise than I did?

Before we get into that, let’s first discuss how a business makes money? Generally speaking a business's success depends on its ability to drive down cost and to generate revenue greater than the cost. Efficient businesses reward their employees and especially those who perform better. As markets drive businesses towards more efficient operations, businesses are turning away from the traditional pay raises and more US businesses are turning to 'yield based pay structures'.

The WorldatWork survey found 79% are using performance-based pay, up from 66% in 2001. As employers recognize that they need certain key individuals for their business, they try to ensure that these people are discouraged from leaving for another job therefore these individuals get higher raises.

Top performers are compensated better, the rest however get compensated at a lower level. This trend has a compounding effect over time, and within a matter of just a few years, your peers maybe making significantly lower or higher salaries compared to you.

am I being taken advantage of.....should I be upset?

People often have a hard time accepting the truth about their real worth. We tend to believe we are undervalued or not fully appreciated. Somewhere deep down inside we know that we deserve better. That's a good starting point, however the short term reality unfortunately is that we are only worth as much as the value we offer to others, today.

In today’s marketplace where businesses are being judged by impatient investors, very few could afford the wisdom to see beyond today. This competition makes businesses make very harsh and sometimes unwise choices for investing in only the 'obvious' few. Making safer bets in whom to keep and reward and whom to let go.

This of course can backfire; people like Bill Gates, Ross Perot and Steve Jobs are living testament of corporate short sightedness of their previous employers.

So, the choice is yours, no one knows better then yourself on where you are in your organization, and your team. Are you a star achiever or someone who is barely hanging in there? Cues from management, and your peers can help you figure out these questions. Listen to your customers, whether external or internal and determine the factors which can help you succeed. Next, determine the best course of action for success, whether within that organization or elsewhere. Make a plan and work on achieving it, today.
Different approaches work for different people and situations. If one strategy is not working, devise a better one based on the lessons learned from the last one. All paths leads to success, the question is, which one takes you to your paradise island!

References:Table 1.1http://www.inflationdata.com/inflation/Inflation_Rate/HistoricalInflation.aspx

About Me

Stuff I have to say: The views expressed here are solely my own. My employer, clients, colleagues, neighbors, family, have got nothing to do with this….although I am thankful to them for putting up with me!