Job Security? The Rules Have Changed

Last week I attended the annual conference of the Association of Executive Search Consultants in New York. The theme for this year’s conference: The New Rules. I wondered if the rules of recruiting and employment really have changed? Certainly new technologies like the Internet have redefined the way we interact and communicate, but have the fundamental rules of jobs and career changed.

The keynote presentation offered some very insightful views on how today’s job world is, indeed, very different. The keynote speaker was Geoffrey Colvin, senior editor at large for Fortune Magazine. His topic, The New Rules for the Outstanding Executive. I’ll provide a synopsis here but his speech offered some real food for thought.

Coleman offered four basic rules for companies operating in today’s economy:

Any organization’s competitive advantage resides in its people, its culture, and its relationships. In brief, great businesses understand that real business is based on people. To prove his point, Coleman offered two examples. In the first, he compared Microsoft to Exxon. Microsoft is a people-based operation; where the ideas and concepts derived from human capital far outperform the capital of conventional assets, like petroleum production. Just compare their stock performance. He also offered a similar comparison between Google and Citibank. The innovation and creativity of Google’s human capital outperforms Citibanks’ financial assets. In short, successful companies invest in people.
Know when to change your business model. In the era of the “old economy,” the rule of thumb was to change your business approach every 30 years. In today’s fast-paced digital world, smart companies are reinventing themselves every three years. Driven by the Internet and other resources that provide almost instant gratification – the Free, Perfect, Now syndrome which allows customers to get exactly what they want faster than ever – you have to meet customer needs faster, and more specifically than ever.
Understand the reality of wealth creation. This is really important. Wealth creation is about capital earning more than it costs. Institutional investors, not individuals, hold most of the wealth in today’s global economy and many executives overlook this basic maxim that you need to earn more than you invest. Consider what this means when your capital is counted as your people. Invest in people and they should yield a greater return than the investment.
Execution is key. In the old economy, too many CEOs, CIOs, CFOs, CxOs have been focused on the process, not the results – they lose sight of the bigger picture, which makes them slow to adapt to new market conditions. As a result, the average tenure of a C level executive is 4.5 years, and the average tenure of a Chief Marketing Officer is 22 months. As the corporate game plan changes every three years, it’s harder for senior management to re-invent themselves in order to keep up. So even at the top, there is no job security.

The bottom line is that to stay competitive, the innovative companies will invest in people. I know you have heard this before, but there was a lot of buzz at the conference about recruiters identifying and investing in star performers and tracking them from job to job, so when that senior position opens up, recruiters have candidates primed and ready to fill the slot.

So what does this mean for the executive job seeker? Stay tuned. That’s the topic for our next blog entry.