Corporate Fashions – Suit Down Unless You’re Part of the Industrial Age

If you look around the office, do you see men and women in suits. Some are daggy, worn and crumpled and unkempt (reflecting the way they feel about the grinding job which pays the mortgage)  while others perhaps higher up in the organisation are a little smarter, perhaps trying to make a power statement.

For many years I suited up for the office. It was an unspoken law. As I rose up the ranks I had to spend more money on suits to look a bit flashier and fit in with the higher management tiers.

I even recall that in one (strange but listed)  company I worked for at the end of the last century they actually put managers  through a training program not just on dress codes but which suits to buy, how to match ties and look suave,  powerful and influential.

When I look back on it, the suited office is one of the strangest norms in the world of business. For some reason, someone somewhere, sometime years ago decided that it is appropriate for everyone to conform to a set of dress rules.  And the rule was the suit…. and unless you had money to wast, it was a bad idea.

Men and later women would suit up to signify their knowledge, power and influence.  Or if you were lower down the corporate ranks, to indicate your willingness to conform and work your ass off for the company.

But if you think about it – that’s plain stupid.  You end up in a room with your client and you’re all dressed up together; all trying to overpower and influence each other, and all nullifying the others effect.  you just end up looking like a bunch of conformists and in the end the deal just comes down to the value and the money.

Interestingly, in the noughties it has become fashionable for entrepreneurial companies to throw away the suit unless its with an open neck for the males.  Immediately, this defined the suited companies as old and conservative.

Now it’s banks, insurance companies and lawyers who do the power dressing suit thing and  modern (and often) entrepreneurial companies who do the smart casual and comfortable thing.

So  now the suit has become a symbol of the industrial age, when work was about getting the staff to conform and a status symbol for those with power and influence.  If you wear a suit you work in an old industry doing business with other old companies.

A suit doesn’t mean you’re  knowledgeable or trustworthy. It just means you’re conservative and old school.  In fact today when I see a banker or financial expert dressed in a suit I assume their incompetent based on the past couple of years of economic mishaps.

Now of course, I have the luxury of not having to wear a suit except to meet with those old industrial age clients from whom I am seeking fees for service. In fact, I have the luxury of spending most days in jeans and a t-shirt.

Executive Bonuses – are they getting paid to much, or is there a downside risk?

Well, I can’t help a few observations on the current debate about salary capping. The word out on the newswire is that the big executive salaries and bonuses are coming back and there is some conjecture about whether it signifies the western economies are returning to the bad habits which brought the house of cards tumbling down. Particularly that, as much as no one wants to believe it, there are still many people suffering from the past years conundrums and many economies aren’t really recovering as quickly as everyone is pretending.

I heard an interesting interview with some bloke who had walked away from the arguably excessive salaries typical of the pre-economic crash economy.

Of course the capitalists argue that bonuses are a necessary component to drive risk and creativity vital to economic growth in a free market. The free market fundamentalists will even say the that the cost of the past 2 years is negligible compared to the entropy of government interference. They’ll point to failures of communism and certain Southern American experiments. Of course it hardly relevant and not really that helpful if you are one of the unlucky ones who no longer owns their home or is suffering the weight of lost superannuation or savings.

The reactionaries argue that the level of irresponsibility inherent in the behaviour which caused the mess demands price controls.  The response of these heavily bonused  play people wasn’t the downside risk of creative aspiration and innovation, it was just plain GREED.  Accordingly, you need to stop providing the cheese which makes these mice push the financial levers of destitution.

In my experience, bonus incentives are really interesting beasts.  No doubt, they helped me pay off my mortgage, but didn’t make me wealthy.  They drove me to find new and better ways to run the business and increase the profits which we did – substantially.  It was all honorable and would make the capitalists proud – some years ago.

But I heard an interesting interview with some chap who had made some bucks before he walked guiltily away from a major financial market job, but not before he’d pocketed a small fortune.   He suggested that the problem was that typically bonuses carry a unilateral risk – you can only win and you can’t lose.  When there is only an upside, you’ve got nothing to lose and so who cares  - got an idea let’s try it.  The worst that can happen is that the shareholders cop it, but I’m OK – I’ll still get my base salary so at least I can pay the rent.  One way risk apparently is the formula for the it’ll be OK derivative.   The it sounds good so let’s try it without really thinking it through solution which helped to bring some of the great financial powerhouses.

I have a feeling that he has a point but it’s not quite that simple.  Sure if you can only gain if you try an idea and you reckon the likelihood of success is good – you’ll give it a go if you think it’s your best idea.   That sounds pretty like the human mind to me.  But what if you are SO SURE that it’s a winner that you personally risk a bit too much.  For example, what if you think it’s really likely that you have a great idea and you expect that you sure to get a bonus so you go and buy a new house at inflated prices, based on your expected bonus.    And what do if it wasn’t such a good idea and doesn’t quite deliver the bonus you thought it would.    Maybe you’ll try and pretend everything will turn out OK.  But maybe,  just maybe, you might be a bit naughty and rather than respond rationally (i.e. stop the stupid behaviour) , your in so deep that you try something which maybe you shouldn’t, but its OK because hopefully no one will find out.    Anyway, everyone’s doing it….

There is of course a downside when everyone gets overconfident. It’s like that decision you make after a bottle of wine which you think twice about when your soothing the headache the next morning.  It sounded good in the alcoholic euphoria but in the sober light of day – it was a crap idea.

I have  a feeling that a lot of people  realised the folly of their ways, entranced by the euphoria of the promise of everlasting  growth, but then they woke up and realised the fix they were in.   The downside risk emerged over time for those high flying executives who had totally misread their personal circumstances.  Over confident they had accumulated a lot of debt to pay for a lot of toys they couldn’t really afford.  When they realised the truth of their predicament, their only option was to keep playing the game, hoping that a miracle would turn water into wine and save them from the coming disaster.  deep down they new the miracle would never come.  But oh xxxx – what could they do…….

There is a downside risk if you lose touch with reality (and not many people didn’t).  If you start to believe those bonuses are inevitable, you fall into the downside risk trap – first you start to believe the fantasy (everlasting growth), then you have to believe it.  When these high flyers find find themselves in trouble, we just might need the government to protect us from them.

You Need a Substantive Value Proposition to Fight the Big Bear

As we have seen (yet again), greed – the achilles heel of the rational market – works its dark tricks perpetuating the bull into a rising spiral of economic mayhem.  Then, as the big bear spies the precariousness it seizes the opportunity to feed malevolently on scurrilous lechers  who grab hopelessly onto their sinking business carcasses.  So it goes….

Of course, after the mess is cleared the businesses which survive are those who have a truly competitive value proposition.  In my work I come across companies who struggle with their value proposition.  Poor value propositions often survive in the undisciplined  buoyancy of a bull market, but when the pennies are tight, buyers start to scrutinize their suppliers to see where the can cut and save.  To survive this, sellers need to ensure that their buyers are really clear on two things:

1. They know what they are getting for their money  and how they are better off from the purchase.  
2. They can’t make a better purchase from a competitor.

The problem so often encountered by sales and marketing is distinguishing between the widget (be it a service or product) and the value it creates.  The widget in itself has no value.  The value is determined by what the widget allows you to achieve.  Hence, a mobile phone is merely a piece of metal and plastic which hooks up to a telephone signal.  The value attached to the phone is that it allows you to communicate with friends or business contacts, access information from the internet or amuse yourself listening to music or playing games.  The value proposition is about what it adds to your lifestyle or business opportunities. How it makes your life or business better (if thats what you”re into).

Of course value per se is a subjective concept in the eyes of those who have a need or see a purpose.  In order to focus a value proposition, you need to identify the needs of your customers.  What is their perception of  the world  and how could they use your product to improve their circumstances.  Your value proposition isn’t about what you think your product can do for people, it’s about what they think it can do for them.  

A common error is for sellers to define the value of their product from their perspective rather than from the perspective of potential customers.   If you define the value, your placing limitations around your market (common in insurance and banking).  The alternative is to listen to your customers (or potential customers), to understand their needs and aspirations and then how your product/service could help them solve the problem.  If you can solve these questions the market is your oyster.

Get Your Employees Participating to Help Steer the Business Through the Tough Times

Employee participation is a tried and true path to enhancing productivity. All (and I mean all) staff have ideas about their job. OK, so some of them might not be so good but others are good and some might be fantastic. Chances are they will also have ideas about how other staff in the business can contribute more effectively, and probably about how the managers could get on with it.

In my experience, there’s buckets of value in staff ideas. The challenge is getting the constructive ones out in the open. It’s not just a matter of putting a suggestion box on the wall prefaced with a big announcement. You actually have to work hard to get valuable ideas.

Fundamentally, there needs to be a culture which supports participation. People need to know that their ideas are important, and that their ideas MUST be important.

And important contributions must be valued by the company .  When found they must be moulded into concrete outcomes – processes, actions and behaviours which change the way work is done.

Sometimes managers are afraid that encouraging employees to contribute ideas about work will undermine their own status.  These managers are control freaks who want to be seen as the sole responsible driver of their business outcomes.  They put themselves under a lot of pressure to all the decisions without real coal face knowledge.  If your a control freaks are often perceived as arrogant when they really lack perspective and confidence.   And in the end they lose control.  When staff learn that their manager is a control freak they start side-stepping him/her to get the things done vital to their job.   

The best managers in my experience searched their staff for issues and ideas, recognised the good ones and set about moulding them into concrete action.  They quizzed and prodded staff with problems, what ifs and vital outcomes.  Sometimes things would get pungent as staff argued the pros and cons of every detail.  The great manager kept them on track, sometimes road blocked stupidity and enforced rigorous goal directed thought.  In the end they always gave credit to the staff who divined and nurtured the idea.  Idea ownership was a secondary issue for them.  Their ego and survival depended on outcomes.

Most importantly, the staff loved making a contribution – it gave them purpose, made them feel valued – that they belonged.

So if the your business is finding tough, reach in and share it with everyone.  Get them to take responsibility for coming up with the solutions and coach their participation to success.