Saturday, February 14, 2009

Economic Miasma

Last night, I stayed up to watch the final Senate vote cast to pass the historic stimulus bill. Why? I have no idea. Perhaps it’s because I’m grasping at straws for a glimmer of hope that we’re getting out of this international economic mess. (How’s that for multiple clich├ęs in a single sentence!)

I’ve made mistakes in my investing life – buying desert land when I could ill afford it in my early 20’s, and, later, investing "milk money" in high-risk car loans which turned out to be a Ponzi scheme. Thank goodness it collapsed before I put more money in!

Since that time, I’ve paid pretty good attention to risk and reward. I avoided the emerging market bubble in the early 90’s and the dot-com bubble earlier this decade. But this train wreck was unavoidable. This train wreck has affected people who were playing by the rules – working and saving, buying and holding, investing for the long term.

Like it or not, we all have to be money managers. The holes in the social safety net are too big and, for the most part, private pensions are non-existent. The problem is unless it’s your full time occupation (well, even if it is your full-time occupation) it feels more like gambling than investing. That’s because, so much of value is determined by human psychology and herd mentality than anything intrinsic. That’s why the cycle of boom and bust has not been repealed. As a matter of fact, when we hear comments that, "this time is different," at the height of the boom, we can be assured that the bust is coming. And the problem is that each generation has to learn the boom and bust lesson for itself. (If you need convincing read the classic: Manias, Panics, and Crashes: A History of Financial Crises, by Charles P. Kindleberger). It’s also why a Bernard Madoff can use our penchant for trusting those we know to pull off a massive Ponzi scheme.

What’s an individual to do? It feels really bad to just ride the bubble down and do nothing. It feels bad to watch 30% of your savings disappear. But sometimes it’s better to just stand there and do nothing. Sometimes it’s better to focus on the 70% of savings you haven’t lost. Here’s how I talked myself off the window ledge after a particularly black day.

Tuesday, September 30, 2008
Meltdown on Wall Street

Yesterday the DOW fell 777 points – its greatest point decline ever. While I’m trying not to focus on personal finances and material matters, this one was hard to ignore. Market moves don’t affect my daily life, but they do affect my financial security in retirement by devaluing my savings. I was mildly depressed last night.

This particular meltdown seemed to be the fault of Congress. After setting expectations that they had agreed on an unprecedented 700 billion dollar bailout bill, the House failed to pass it. That just seems dumb – setting expectations and then not meeting them.

These are serious times for all of us living these days. Not much would need to go wrong to trip us into another great depression.

While what happens in Congress or the financial markets is out of my control, I should realize that my individual circumstances are connected and aligned with the broader human community. It’s in everyone’s interest – worldwide – to have a functioning world economy and financial system. We’re all connected. I can take solace and security from that fact.

Having said that, it’s mistaken to seek security from external events. The only real security comes from within. Internal peace, harmony and tranquility are the assets to tap when circumstances and events go crazy.

So, although, the gyrations and permutations of the financial world go awry, I can still be peaceful and serene. Even though events out of my control frustrate my financial hopes and plans, I can let it go. There are other, more important aspects of life, specifically, serving others and making your near-world a little better place for the people in it, living a legacy and leaving something behind for the future.

Living a life of meaning and not achieving financial goals is far better than achieving financial goals and living meaninglessly. Building a life of meaning is also much more within my control than the financial markets. And it focuses on the only true source of security – that from within.

So live each day well
Don’t obsess
Over things outside --
The external mess

And focus internal
Where security lies
Live meaningful days
Life’s one, true prize

So here’s hoping that the stimulus bill and the kitchen sink of solutions turns around the economic meltdown. Here’s hoping there’s another up-cycle and that it comes soon. Not just for people of my vintage who hope to retire, someday, but for those already retired, for those building a future and for the charitable causes that depend on the philanthropy of us all.

Friday, February 6, 2009

A Lonely Journey

With unemployment hitting 7.6% -- the highest levels since 1992 -- and January job losses at the highest one-month rate since 1974, I have lots of colleagues in the job market and a few that would like to be, but are afraid to be looking right now. Even in better economic times, or maybe especially in better economic times when the perception is that jobs are available – just not to you, a job search is a lonely journey.

I’ve been on this journey many times in my life. First, after college, trying to enter the job market in a recession – kind of like today’s recent graduates. I muddled through two years until I landed stable position in my career field – professional tuba playing, no less.

Next having learned the lesson of the un-employability of a narrow specialty, I undertook a more marketable degree – an MBA. Once that was finished, I embarked on another one-year job search with a twist. I moved from orchestral tuba player to a human resources director position at a small financial institution.

In both of these searches, there were twists and turns and ups and downs, but since I didn’t write anything down at the time, I don’t remember much of the process or the pain.

Having launched my new HR career, though, and having hit mid-life (if you call mid-40’s mid-life) and having started to write to myself, I did take a few notes during a job search at age 47. It was another difficult one – trying to transform myself from a number two job in my field to the top job – VP of HR -- somewhere. It was a one-year adventure. Here’s what I wrote shortly after deciding to take it on.

Wednesday, January 14, 1998

A job search is certainly more than an objective decision. It sets loose an emotional menagerie -- loss, fear, excitement, adventure, disappointment, confidence, doubt and guilt.

Although there’s some staging to the emotional experience, there’s a lot of ebbing and flowing back and forth between emotional states. When the initial decision comes, there’s a sense of loss over the relationships and comfort of the current job. Then there’s guilt when you figure you’ll be less productive and loyal as you take on this new project along with your normal duties. Finally, there’s fear as you realize the danger that your current employer may find you disloyal and make a decision to do its own search for your position -- while you’re still there!

The other emotions wax and wane with the events of the days and weeks. There’s excitement when you first learn of a job or a headhunter calls. There’s disappointment when the headhunter doesn’t do what he said he’d do -- the interview isn’t set up, the return call doesn’t come back. (Most of these folks have to be conflict avoiders -- they seem to do everything they can to avoid giving bad news and being straight with people. It’s therefore almost impossible to get accurate feedback through the process.)

Another observation is that the job market is a pretty inefficient market. If employers and candidates both had perfect knowledge about each other, we wouldn’t need 6,000+ search firms. The lucrative returns for search assignments demonstrate the amount of “play” in the marketplace and just how inefficient this market is. For example, commission for stock trades where information is near perfectly available is expressed in basis points (hundredths of percent). A typical retained search costs 30%! And employers pay it with no guarantee of results.

Anyway, the results are not ultimately in your control. The activities are. The key is to do everything you can think of to produce success. By doing so, you set events in motion so that openings start to converge with your availability. Eventually, when the time is right, the Law of Intention and Desire takes over -- the universe comes around and gives you what you hope for and need. That’s been the story of my life. I affirm it will continue to be the story.


And here’s what I wrote after I landed my target job.

Saturday, October 10, 1998

What a relief! I met with my new boss Thursday and feel good about all aspects of the job and the offer. Although, I don’t have the written offer yet, it’s coming next week. All that remains is giving notice, working out a transition plan, and trying to get some time off between jobs.

It’s been a long and stressful process. From November 21st 1997, the Friday after Thanksgiving, to October 8, 1998...six weeks short of a’s really been a physically and emotionally grueling process. Outside my initial mailing in December to 228 search firms, I’ve probably averaged 10 contacts (letter, network call, interview) and ten hours per week (reading, writing, planning, calling). Over 46 weeks, that translates into 460 contacts. Added to the 228 mailings and rounded out, I’ll bet I’ve made between 800 and 1,000 contacts and spent the equivalent of three full-time equivalent months working on the search. I was serious about fourteen opportunities, from Tampa in the South, to Boston in the North and Omaha in the West. And, in most cases, they were serious about me.

And while I was conducting my search, I kept three jobs going (Division HR Director, Corporate Compensation & Benefits Manager, Interim Head of HR), served as treasurer on the church building committee and as a volunteer board member for a local non-profit. Boy, I earned this the hard way!

So what have I learned? I learned some valuable search tips along the way:

• Your highest value appears to be in your local market (where people know your current employer and can evaluate your contributions) and in your direct industry
• Never offer up a single “flag” in the interviewing process
• Put together a current compensation summary for the recruiter and let them make the offer you can then graciously accept
• Ask for a “pre-nuptial” severance agreement
• Ongoing networking is an integral part of the job of a successful need to keep building and nurturing your network as long as you work.

I’ve learned (re-learned) things happen for a purpose and when they’re supposed to. If something doesn’t go the way you think it should, it’s because you’re not ready and there’s a lesson you need to learn. (Maybe that will make me more patient in future trials, but I doubt it).

For example, as excited as I was about one particular opportunity, it would have been a terrible mistake for me to work there. The culture is too formal and bureaucratic, the politics are ridiculous, and the commute unbearable. And, as another example, as sure as I was about my current position being right for me, by serving in this interim period, I’ve learned much more about the management style of the company. We are conservative and calcified as far as HR initiatives are concerned...continuing in this job would only lead to frustration.

But mostly what I’ve learned is the generosity of the universe. Some power outside me gave me the lessons I needed to learn when I needed them, put the right people in my life at the right time, gave me the will to keep going and orchestrated events to bring me to the job uniquely suited for me...the people, the culture, the challenge and the location. The awe and mystery of it all ...the exquisite sense of timing (when both my new employer and I were ready) and the irony of the job’s location -- after a national search, the job turns out to be in the same building I currently work... is truly amazing! (God certainly has a sense of humor).

In closing, I’m grateful for the kind and generous God who orchestrates my life and my family’s lives to be what they should be. Now, it’s time to re-focus on the contribution I can my new company, to the people who work there and to the people who live in the communities we serve. That’s why I’m on this planet and why I’m where I am on the planet. I can relax, enjoy and make the most of it.


Of course, it wasn’t all the peaches and cream I imagined it would be in my moment of relief and euphoria. In fact, it was just the beginning of a ten-year odyssey at the helm of HR for two public and one private companies, as the first one struggled with financial survival, the second one was purchased, taken private and liquidated and the third one was just a crazy place (which included that unbearable commute that I thought I had ducked in 1998).

Now, in the final projected eight years or 15% of my working life, I’ve down-shifted to a non-executive role and, Rip Van Winkle-like, returned to the employer I left 14 years prior to beginning this quest.

Although, no one knows the future (as my prognostication has shown, I certainly don’t), it feels like I’m in the right place at the right time and I thank my lucky stars for that. But, whatever the outcome, I know that I can adapt, survive and thrive.

We, as humans, are amazingly resilient. We can deal with whatever life throws our way. Even in our darkest, loneliest times, we can see a new day and a brighter future. Even in our darkest times, we can say, that we’re “looking forward to looking back on this.” And, looking back, although I never enjoyed times of struggle, I would not want to have forgone the lessons I learned by going through them. I’m sure this is true. For all of us.