The Need for Wisdom in a Time of Crisis

January 28th, 2010 by AdvisorCatalyst

The current economic recession has been made more difficult by the fact that the preceding period of prosperity was so long. Most of today’s workers and many of today’s leaders have never known economic hardship, so they’re not sure how to handle today’s economic struggles. Think about it. Today’s 40-year-olds have spent most of their careers watching their investment values go up. When the market crashes, credit freezes, and demand plummets, they don’t know what to do.

Unfortunately, those who have the experience to lead in these times have disappeared into retirement. We need them back! Many of today’s business leaders are desperate for the experience of the very people they replaced.

With every economic disruption, some markets decline (because they’re no longer needed), and some markets rise. At this time, the market for experienced leaders is rising fast.

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Managing Your Own Performance in 2010

January 11th, 2010 by AdvisorCatalyst

The beginning of a new year prompts us to reflect on the past and plan for the future. When that calendar flips from December to January, we feel as if more than just the year is new; everything is new. “This time,” we say, “I’m going to get it right!” It doesn’t matter what it is. Nothing seems impossible when we have a clean slate in front of us.

I would like to encourage you to take your New Year resolutions beyond the typical. Perhaps you have resolved to eat better or exercise more, to spend more time with your family, or to begin taking lessons on an instrument you’ve always wanted to learn. These are worthy goals, and I wish you the best in whatever you have resolved to do! However, how much thought have you devoted to managing your own performance?

Business organizations know the importance of annual reviews. Most hold an Annual Meeting during which they reflect on the previous year’s successes and failures and set a course for the coming year. Such results and future goals are data driven. Why not do the same for yourself?

What are your strengths? Your weaknesses? Your core values? In what type of environment do you perform best? How do you learn the best? How effective are you at making decisions? Don’t answer these questions based on what you think is true. Look at the record of your own performance and interpret the patterns of your own work. You will be surprised at how much you learn about yourself. I have been doing this for years, and I attest that its value is beyond measure.

So where do you start? Read “Managing Oneself” by Peter Drucker, and you will be able to take it from there. If you would like more pointers on how to conduct an effective personal review, please email me at troy@advisorcatalyst.com. I would be delighted to discuss it further.

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Entrepreneurs: The Process Builders

December 18th, 2009 by AdvisorCatalyst

After spending a lifetime building a wisdom base, you don’t need to spin that wisdom as something new or revolutionary in order for it to sell. Organizations simply want access to the wisdom – the timeless principles of success that you have learned. The key is to develop a way to deliver that wisdom. You need a process.

In a 2009 interview with Inc. magazine, Jim Collins said:

There has been a big shift away from seeing the essence of entrepreneurship as the creation of a better mousetrap to viewing it as the development of a better process. Did Starbucks have a better mousetrap? Did Home Depot have a better mousetrap? …There are lots of really great mousetraps and very few really great processes. …Isn’t it much more important to create a better process that will produce many mousetraps over time?

Your wisdom already has inherent value, so pour your creative energy into developing a way to deliver it.

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The Real Creative Class

December 3rd, 2009 by AdvisorCatalyst

Who is more likely to start a business: A college student or a worker with a few decades of experience?

This question was asked by BusinessWeek in its October 12, 2009 issue. The article was titled “America’s Best Young Entrepreneurs 2009,” which probably reflects the answer that most would give to the question. So many readers will probably be surprised to know that the answer is…the experienced worker.

(Click here for the article.)

The article noted that over the past decade, “the highest rate of entrepreneurial activity belongs to the 55-64 age group.” The lowest rate was in the 20-34 age group.

This is good news. I have nothing against anyone starting a business, regardless of age, but with the way our society celebrates youth in everything, I’m delighted to see boomers getting some attention for continuing their years of productivity rather than disappearing into retirement. They have experience. They have wisdom. They have ideas. Consequently, they have more to offer to our economy than their younger peers. It’s time that more of them realized that, and it’s time our society starts lauding them for it and encouraging their entrepreneurial dreams.

Economies thrive when value is created. How encouraging it is to know that those most capable of creating value are doing just that.

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When Wrong Decisions Are Good Decisions

November 23rd, 2009 by AdvisorCatalyst

We all know what it’s like to agonize over a tough decision. We weigh the pros and cons and think through a lot of “what if’s” for each option. Obviously, we should always “count the cost” before making a decision, but we must learn to recognize when our diligence in thinking through a decision can hinder us from actually making a decision.

Remember the “Choose Your Own Adventure” books you read as a child? Imagine trying to formulate the “perfect” path through the book before you ever read a page. It’s impossible. You don’t have enough information to start with, and you can’t possibly predict every ramification that will result from later decisions. You simply must start reading and make the best possible decision with the information you have. Of course, if you don’t like the results of a decision, you can always flip back to the beginning and make a different choice. The second time, you’ve got a higher degree of confidence in your choice because you’ve already eliminated one based on experience.

The same is often true in business or personal decision-making. Making a wrong decision is often the first step toward determining the right one. The insights from miscalculations provide the baseline for a recalibration of your strategy.

The alternative is to freeze in a state of “analysis paralysis.” Any decision has an element of uncertainty. You simply cannot collect enough data to guarantee a certain outcome. That’s why George S. Patton, Jr. wrote in War As I Knew It, “A good plan executed now is better than a perfect plan executed next week.” Those who have the courage to proceed with a “good” plan will likely be able to see the results, adjust, and execute a better plan while those working on the “perfect” plan are still thinking over their options.

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It’s Time to Rethink Retirement

November 19th, 2009 by AdvisorCatalyst

Over the last century, the retirement rate has risen, the average age of retirement has declined, and life expectancies have increased dramatically. If the current trends continue, today’s 20-year-old can expect to spend one-third of his life in retirement. Economically-speaking, that’s one-third of life as a non-producing consumer (and that’s not even considering the childhood years which would only add to the consumer period).

Now consider that the baby boomer generation is beginning to retire. In his book, Age Power, Dr. Ken Dychtwald likens the baby boomers to a tsunami. The only warning people get of a coming tidal wave is when the coastal waters begin to suck away from shoreline. Suddenly, the massive wall of water slams the shore, destroying everything in its path. We’re about to be hit by the economic tidal wave of retiring baby boomers, and both our free market and social systems will be crushed by this onslaught of consumers on a small producing population.

Perhaps nothing demonstrates the economic toll of long retirements better than the Social Security system. At its founding in 1935, 40 workers supported every recipient over 65. Today, we will soon be below two workers for every retiree. Soon, the system won’t be able to make its payments without large tax increases on the working public, but the working public already pays 5000% more taxes to support this program than at its inception.

Put simply, society cannot afford the long retirements to which we’ve grown accustomed, nor should society have to. Today’s average 65-year-old is more than capable of working, and in many cases is more valuable than ever.

It’s time to rethink retirement. Productivity is healthy, fulfilling, and economically viable. Why would anyone want to give that up late in life? Besides, the older we get, the easier it is to be productive thanks to the market value of our wisdom base. Experience is valuable. Insight is precious. Thus, individuals and businesses will pay for them!

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The Wisdom-Knowledge Ratio

November 12th, 2009 by AdvisorCatalyst

A college graduate is armed with book knowledge and skills, ready to take on the world. For most, it doesn’t take long to realize the limits of that book knowledge. Experience is key in any endeavor, and experience takes time to build. There are no shortcuts.

That’s not to say that book knowledge doesn’t have value. Of course it does. It’s just that book knowledge is pretty much all you bring to the table early in your career. As the years go by, however, your experience contributes a greater and greater portion of your total productive value. Knowledge and skills will always be important, and workers must continually learn, but there will always be more college graduates to hire for book knowledge. As a veteran worker, your value is increasingly found in the wisdom base that you’ve spent years building. You’ve made good decisions and bad decisions, you’ve seen projects succeed and fail, you’ve seen good employees and bad employees… and you’ve developed the instincts to recognize which is which long before they come to fruition.

In other words, your “wisdom-knowledge ratio” increases as you age.

Knowledge is usually interchangeable. Experience usually is not. It’s a unique quality, and thus carries tremendous value. Are you putting your wisdom base to productive use?

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