4 tips to avoid counting your work chickens before they’re hatched
Have you heard the latest phenomenon in the whole labor game amidst our supply chain issues? There’s a boomerang effect going on. It’s as if, for both the workforce and supply chain dynamics, the folks counted their chickens before they were hatched.
The Guardian recently posted a story about unretirement.
This is the phenomenon where many individuals, who’d worked a full career and retired, elect to return to the workforce, coming out of retirement. The headlines reads: “I’ve always thrown myself into work — now it keeps me alive”: The over-65s forced to join the “great unretirement.”
For some, it’s a matter of preference. For others, in today’s economic environment, it’s become a necessity.
Resources for all of us are stretched in ways due to inflation the likes of which we haven’t experienced in nearly five decades. Nobody saw this coming, at least not among us mere mortals, since nobody could have predicted the pandemic would play out the way it did and our lives would be disrupted in such a significant manner, well beyond the panic over toilet paper supplies.
Beyond retirement, we saw a flight out of the labor pool, with the Great Resignation. Some participants left their employment because of lost patience. They decided they simply weren’t going to put up with bad or toxic work environments that they were white knuckling it through. Others left because of the pandemic, either due to child care and other caretaker responsibilities or as a health protection measure.
Now, there are reports of those individuals also finding that the grass isn’t always greener with their new employer. Others, perhaps those that hastened their retirement, may also be contemplating unretirement.
I have a saying that “grass is grass.” Sometimes it’s green, sometimes it’s brown, but it always has to be taken care of. Many jumped out of the workforce because of stress. And boy howdy, who could blame them? 2020 and 2021 were periods of distress. Decisions on job changes, made of necessity, imposition, or of frustration came fast. We found, or created our own, new jobs in record time and volumes, often with little preparation. Necessity being the mother of invention, we just figured it out, out of sheer determination or need to survive. Those who left the workforce permanently also moved quickly. Fear and/or family are powerful motivators. Are these phenomenon examples of remaining flexible or is it that our strategies are backfiring?
This got me thinking about the business side of things, in particular the supply chain issues that have been plaguing us for over two years now. For decades, business pundits crowed about the merits of just-in-time and lean, lean, lean inventories. That, they said, was the gold standard for cash flow management and profitability. And there are certainly benefits to the approach, assuming that the degree of supplier concentration achieved doesn’t kick back. Again, nobody could have predicted the pandemic. But when the pandemic struck, the strategy backfired in epic proportions.
In the spirit of my final National Chicken Month blog, these are all examples of people counting their chickens before they’re hatched, with a side of coming home to roost.
Without judgment, all three of these examples share two common themes:
- A degree of contingency thinking, or stress testing, which did not go far enough; and
- Inadequate back-up resources.
Below, you will find four tips for avoiding counting your chickens before they’re hatched.
Leveraging my experience as a CFO, consultant, and exit planner, I find stress testing to be a valuable tool to have in one’s toolkit. You might be envisioning an unhealthy person on a treadmill when you hear that term, but this is a more enlightening exercise.
Stress testing is the ability and discipline to take any given decision and test it against three different potential outcomes — best, worst, and most likely. If the decision is an amazing success, what stresses could it bring on the systems or other factors? If it is a colossal failure or ill-considered move, what systems, people, finances, etc. would be stressed and in what way? And, of course, what you think will most likely unfold and the stresses that may cause.
Let’s consider our examples:
Retirement decision: I’m fried/lost my job. It’s time to retire.
To stress test the decision, you evaluate the decision in terms of what it could mean for your intellectual and social systems, personal development, family and family life, financial future, and personal contentment.
Scenario one: Retirement is even better than advertised. You’ve slipstreamed smoothly into new activities, routines, and relationships that have you on cloud nine for the rest of your life.
Scenario two: Retirement is an utter disaster:
- Without somewhere to go every day and something to do, you are losing your mind. Your closest personal relationships are turning toxic because you’re on top of each other or in each other’s business in ways you never were before.
- Resources run out.
Scenario three: Retirement is about what was advertised, but not exactly, because it never is. But it’s OK. You’re figuring it out.
Great Resignation decision: Bolt from my current job and take this offer that came to me.
To stress test the decision, you evaluate the decision in terms of what it could mean for your career, personal development, family and family life, financial future, and personal contentment.
Scenario one: The offer, opportunity, and workplace environment are even better than advertised.
Scenario two: The offer, opportunity, and workplace environment are nothing like what was advertised. In fact, at the same time the demand for your skills and capabilities dries up, it’s:
- More toxic/stressful and filled with evil than the last place, forcing you back into a new job campaign; or
- A disaster resulting in you being fired.
Scenario three: The offer, opportunity, and workplace environment are about what was advertised, but not exactly, because it never is. But it’s OK. You can deal with it.
Just-in-time inventory decision: Move our supply chain and inventory management strategy to just-in-time (JIT) so we minimize our investment in inventory and holding costs.
To stress test this inventory management decision, you evaluate it in terms of what it could mean for your processes, cost management, product mix and quality, and other factors.
Scenario one: Our chosen JIT suppliers are even better than advertised. Their performance is spectacular, and we have everything we need exactly when we need to meet our highest quality standards. They grow with us as sales grow and work with us when demand wanes.
Scenario two: Our chosen JIT supplier:
- Has their own sourcing issues and can’t meet our product needs for an extended period; or
- Shuts down operations entirely and there is no backup resource identified at all.
Scenario three: There are periodic blips although performance is within your general standards. It’s OK. You can deal with it.
At a minimum, stress testing involves thinking through “what if” scenarios. The thinking is more comprehensive, real, and tangible, merely a casual “If this guy turns out to be a jerk, I’ll just find another job.” You model it and put pen to paper. You research resources, alternatives, and options, and determine potential cash flow and real-life implications.
Once the models of your three scenarios are built, you are in a stronger position to make your decision and, simultaneously, prepare for the contingencies.
So, tip No. 1: Stress test your big decisions.
The second theme present in the phenomenon is inadequate back-up financial and/or non-financial resources. Here are tips two through four for ensuring you have adequate back-up resources aligned with major decisions and aren’t counting your chickens too early:
2. Have a go to hell (GTH) fund
Early in our careers, my husband and I decided we would have a GTH fund. We designed our spending plan so essentially we were building a reserve of funds that if either of us got to the place where we needed to pull the pin on our job, or our job pulled the pin on us, we would be fine financially for an extended period. It has served us well. When it’s been invoked, it provided an opportunity to think through next steps without undue stress. The discipline also pays off when other stuff goes sideways.
The same concept can be applied to other major decisions. Balancing personal or corporate spending with a saving, stewardship philosophy so financial reserves are available when things go to hell is something everyone can apply to everyday and major decisions.
3. Broaden and deepen relationships
A major deal killer in M&A transactions is known as concentration, whether customer, supplier, or key person concentration. All the eggs are concentrated in a single basket. The basket drops, the eggs go splat, and it’s a mess. Dividing the eggs across several baskets provides security and mitigates risk.
Whether considering a job change or deepening supplier relationships, nurturing multiple relationships is a wise strategy. While moving into a new role, develop and maintain good relationships with the other companies you considered, especially those you may have gone through interviews with but, for whatever reason, it didn’t come to pass. Don’t burn bridges with the former employer. “No” isn’t forever.
For those in or contemplating retirement, seek out and develop relationships outside of your work buddies. As anyone who’s changed jobs can tell you, relationships with work friends evaporate when the daily interaction goes away. Forming new relationships takes time and discipline, so do a bit each week.
4. Document and set the foundation for activating your back-up plan
Go back to your stress test models. Identify what triggers you will watch for to know which scenario is playing out. Identify what actions you will take when a trigger is pulled and what steps you can take now to be in the best position to act and adapt quickly. Write it down and share it with those who need to know and have a key role in implementing and monitoring the impact and consequences, good and bad, of the decision.
When it’s all said and done, we all tend to count our chickens before they’re hatched. Reasons for it can range from being a perpetual optimist to missing the signals of trouble to running out of bandwidth. But with every cracked or rotten egg, we can learn from it and help the next clutch decision be more successful.
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