It's easy to be pessimistic these days. With a prolonged black swan event, bitter political divisions, and fear-mongering and apocalyptic thinking in many quarters of society, you're certainly not alone if you feel optimistic about the direction the country is heading.
However, for managers to fall into that mindset now would be a huge mistake, and one that could prove costly. fillip PowellHe is an economist at Indiana University and executive director of the Indiana Center for Business Research. chief executive officer About the Strategy Development Masterclass Series for Manufacturing CEOs. This program is being offered (again) free to our CEO community thanks to the generous support of the Indiana Economic Development Corporation (Thanks, Indy!).
His key message to the manufacturing CEOs attending last week's session was simple. Are you ready to rock and roll? (See the full session below).
Powell believes economic data, particularly on manufacturing, has convinced him that we are in the early stages of a supercycle of prosperity driven by the biggest increase in corporate productivity since the 1990s. He believes this is the hidden force driving numbers like the astounding 10.1% growth in corporate profits in the first quarter, even as the Fed raised interest rates.
“If you're not having a prosperity mindset, if you're not planning for two, three, four years of smooth growth like 2003-2007, like 2016-2020, then you're really doing your shareholders a disservice. That's the biggest risk,” he told the audience.
To take advantage of the wave that will soon crest, he advises you and your team to focus as much on improving productivity as you normally do on profits and expenses. Not by cutting costs. That's not what he's talking about. He's talking about taking a more holistic look at your work and your people so you can be on the crest of that wave, not under it.
He suggests four focus areas that should be addressed across all aspects of your business.
- Better technology. Have you invested in state-of-the-art equipment and automated even the most menial tasks?
- Better Management. Is your workplace the most exciting and fulfilling place to work in your industry?
- Better infrastructure. Have you negotiated the best public assistance and deals with utilities and local governments?
- Better talent. Have you built a talent pipeline and instilled a culture of continuous training and learning?
And he suggested six key things CEOs and their executive teams should do now to succeed.
- Let's not be short-sighted: the corona crisis is over. Get ready for a multi-year boom as new technologies and production methods converge.
- They will invest in technology, automation and artificial intelligence until they feel financially and operationally secure.
- We will build a strong apprenticeship scheme to employ 16-year-olds and forge close links with local education and training providers.
- Modernize your “old school” approach to managing your workforce. Embrace the younger generation while still holding them accountable.
- We will shift our internationally focused energy to creative engagement with local governments and regional nonprofits.
- We focus on productivity, not sales and expenses.
As the session concluded, I asked him how best to reframe the mindset of his team and ourselves to one of prosperity going forward, rather than the uncomfortable, perpetual fear that hangs over us despite the economic data. I was moved by his answer.
“At the end of the day, the decisions you make as a CEO are driven by emotions,” he said. “We're human beings. That's how we evolved. That's how God created us. So you have to be careful what you put your emotions into.”
“Many CEOs, regardless of their political stance, use popular media channels to learn about the economy. But they have to remember that social media and the media itself are trying to get people hooked on their information,” he continued. “That's how they make money. So they have no incentive to show people a long-term view. So you have to make sure your executives have the discipline to make sure they're being given good data and that they're looking at the right sources.”
That's good advice at any time, but especially now.
