Tag Archives: security

What’s going on underneath the surface

Let’s presume, for the moment, that you’ve got two different opportunities staring you in the face.

Your friend Mike at MegaCorp has called you to tell you there’s an opening just announced — the incumbent’s getting his outplacement treatment even as he speaks — and that he can broker a lunch meeting with the hiring executive today to help you bypass the whole hiring process and just be the one who gets the job.

At the same time, you’re reading an email from your friend Jill, who left the corporate world two years ago, and who’s telling you about how happy she is with her community green energy business installing solar power and water heating systems — and how you could be doing the same sort of thing in your town of Happy Valley. “I don’t make anywhere near the money I used to, but I sleep better”, she says.

Well, in today’s world, we’d all be delighted to have choices.

Still, how do you decide between two very different things like these two?

The Personal Due Diligence answer is to look beneath the surface, and figure out which of these is in tune with the times, and which is pushing against fundamental forces shaping the world.

MegaCorp is a global player. It’s exposed to risk and opportunity in over ninety countries. It’s been gaming the currency markets and playing the tax game to manage its earnings nicely, and its price/earnings ratio is high.

Much of its true growth in the past few years, though, have come from the BRIC (Brazil-Russia-India-China) countries and some of the other less developed nations rising in their wake. In core markets like the United States, Europe, and so on, it’s pretty stable.

While MegaCorp has had some interesting new products lately, it’s also attracted a slew of lawsuits all over the world, as competitors have played the patent card to slow them down.

You’re also aware, having done a little digging, that MegaCorp’s operations in your country are deeply indebted, even though corporately there’s billions in the Treasury sitting around. But that money’s offshore, and bringing it in to retire the debt would expose it to tax. Thank goodness for record low interest rates, because without them there’d be mass layoffs and closures to deal with the burden.

Underneath MegaCorp’s own situation, we have the slowing in the global economy (showing up as a complete stall in Brazil and India and a near stall in China), and the creeping up of interest rates in the bond markets even despite frantic quantitative easing by central banks all over the world.

Underneath that, of course, is the growing global impoverishment of the masses, as global employment falters.

Mike’s opportunity, in other words, comes with a slew of risks, and not just from the normal cut-and-thrust of office politics in a large global organization with competing power centres.

MegaCorp, despite its track record of late, is at the top of its curve. On the downside — and there is always a downside to contend with — the effort to keep that share price from tumbling will lead to all sorts of pain.

So, really, going to MegaCorp at this time should be seen as a high risk venture. Any share options in your compensation package aren’t likely to be worth anything. Yes, the money will be good even so, but how long will it last — and what will the market for opportunities look like a couple of years from now if you’re dumped then?

Jill’s situation is quite different. She needed very little capital to start her venture, and has been ruthless about keeping it manageable since, so that all its funding needs come from clients. She’s avoided debt, avoided having a footprint that requires growth just to sustain it, and avoided the need for keeping the stock market junkies happy.

She’s also keeping it in her town of Slatesville, not expanding beyond that. She’s been able to build a cracker-jack team because it’s small — she can be picky about who she takes on, since she’s not always in expansion mode.

Her business is steady, as one person after another comes to realize they can save money using what she offers. (The solar hot water systems, in particular, pay for themselves incredibly quickly — and whether the customer used oil-fired, gas-fired or electricity-driven hot water systems before, the utility rates aren’t going down. The solar electrical systems are a longer term investment for the buyer, which is why she does both.)

She isn’t offering you a job, just network effects: advice, counsel, hooking up with people who know how to do this who can help you get started. You’d be your own boss.

You’re aware that more and more of the world’s oil and gas supplies are coming from more expensive sources, which means the price for these isn’t coming down anytime soon. (The more expensive sources not only use more capital more quickly and use more operating monies to process the product, they also go downhill faster and produce less net energy per unit invested — guess those “crackpots” talking about peaking might have been on the right track after all, since that’s what they said it would be like.) Even electricity costs more each year. So Jill might be on to something with legs.

But why isn’t she going for the gusto, and rolling out a nationwide company?

Then you realize that keeping it small and local is part of keeping it out of the same waves of trouble that MegaCorp might be heading toward. Sure, as a small town local business, it’s got limits, and so you can’t take that much out of it in pay.

But it’ll be there for years and years — in fact, the harder it gets for the rest of the economy, the more likely it is this will continue to find business.

Different people react differently to different situations. Many would choose Mike’s opening: it comes with a name brand, a title, big bucks, all the items that make the people you meet at receptions and conferences go “ooh! wow!” when you answer their “where do you work?” question.

Jill’s suggestion, on the other hand, won’t impress most anyone — but if it’s security you’re after, it’s probably got more in it (even despite that nasty statistic that four out of five start ups don’t make it to age five that keeps being flashed about) than MegaCorp ever could.

That’s not how it was twenty years ago.

As you perform your own personal due diligence, make sure you’re not operating with an old instruction manual for the world. Really look at what’s going on, getting underneath the surface. It’s the only way to judge, for yourself, whether Mike or Jill is pointing you in the right direction when opportunities come to your door.

And, if you’re having trouble seeing the world clearly, that’s where we come in. Give us a call or drop us an email — let’s talk.

Advice to anyone, not just kids

Leo Babauta, on his Zen Habits blog, posted a wonderful piece today called “Advice to My Kids”. His thoughts on what to tell your children about life and living it are sound.

What I’d add to this is simple. It’s advice for anyone, at any stage of life.

The world we’re in right now isn’t generally a place that’s rewarding the kinds of behaviours that let us neatly separate our work life and our home/personal life. That is not because we’re tethered to our smartphones twenty-four hours a day. It’s not, in other words, a technological problem.

It’s because there’s no security left.

Back in the mid-1950s, William Whyte wrote The Organization Man. In it, Whyte wanted to show that our preference to be a good player inside an organization, trusting it to make good decisions on our behalf, was not as good for us as charting our own courses and trusting to our freedom rather than seeking security. A novel by Sloan Wilson that had come out a year earlier, The Man in the Gray Flannel Suit, had pointed out the emptiness of such a “secure” life.

Still, for the decades from the 1940s to the 2000s, most people found security by living within large organizations. Along the way companies that had made a point of never laying anyone off, not even in the Great Depression (like IBM) gave up and started playing the downsizing, reshaping and merger & acquisition games others had been playing for a long while. Even then, the myth that the corporate or governmental ladder was the place to be persisted.

It’s a myth that underlies all our thinking about company pensions, about the value of a title, about our résumés, and about why we tether ourselves to work all evening and weekend, and never take a real holiday where we truly “leave it all behind”.

Now, if you were living 24/7/365 building your own venture, from being an artist to a start up technology company and everything in between, that passion overflowing to fill every moment might make sense. Those would be free choices.

Security, on the other hand, should come with the ability to say “here’s a boundary”.

It should also come with loyalty — and the loyalty of those of us working in them is not reciprocated by the organizations we work for, is it?

Most of us don’t want to do what Leo advised his kids to do. We want security.

But it doesn’t exist. (If it did, you wouldn’t need to do personal due diligence, would you?)

Think about it. If you need help thinking it through, talk to us. That’s what we’re here for.

The Virtue of Freedom

Thirty years ago, as I was applying to graduate school, the professor who became my advisor and mentor told me an important lesson.

He put it this way: “always have f–k you money”.

What he meant by that was that not being in debt, and having cash in the bank, meant I could avoid any nastiness at work. I wouldn’t, for instance, have to be trapped into staying at a firm skirting the ethical edge. (In his case, the university wanted to shovel him into a suburban campus with a so-called “promotion” to department chair: his economic freedom allowed him to decline the “opportunity” — and make it stick.)

In today’s world, where name brand organizations collapse at the drop of a merger & acquisition or bankruptcy hat — nearly ninety per cent of the Dow Jones 30 from thirty years ago aren’t there any more — and where multiple degrees don’t necessarily mean more than cubicle hell or barista lifestyles, that freedom is more important than ever.

But here’s the thing (and it’s where due diligence about your future becomes personal indeed): you want the freedom less in the form of a big fat pay cheque and a fat brokerage account, and more in the ability to decide your own future.

Where would you like to live?

Suppose, for instance, you are a real fan of the Stratford Festival (Stratford, Ontario). You’ve been taking the nearly two hour drive from Toronto regularly to see plays. Over the years you’ve become delighted with the town itself as well. You end up having dreams of living there one day.

Why not today?

If the answer to that is “but I can’t afford the commute (time or money)” or “there’s no job that pays well enough there”, then you’ve built a trap for yourself where your freedom is constrained.

Take a look at the community of New Urbanists. Architects, designers, urban planners, these meet up at the annual Congress for the New Urbanism event.

But a funny thing’s been happening in the past few years. Whereas the original New Urbanists are typically located in large, expensive cities, the new crop (CNU is twenty years old now) are locating in small towns. Whereas the original New Urbanists lived out of suitcases travelling from job to job, or proposal to proposal, the new crop tends to work close to home.

They’re trading away from money and toward more living. (They’re also applying their skills to improve the places they’ve chosen to live in, rather than build for others and never benefit themselves from the results.)

In other words, money isn’t everything. It’s just one piece of the puzzle. And not needing so much of it is as liberating as having piles of the stuff.

The person who wanted to move to Stratford (population, 30,000) and work there could do so, as long as they didn’t need a lot coming in. Sure, they wouldn’t be an Executive Vice-President at a major financial institution working there, but, on the other hand, they’d be home in ten minutes flat and be living in a place they love.

This is why the ever-escalating educational requirements I talked about are so dangerous for today’s students just starting out. If you got your credentials paying cash on the barrelhead, great! Education has value, and often in places you didn’t expect it (I’ve spent my working life in and around IT strategy issues; my degrees are in philosophy).

On the other hand, if you went to school on student loans (and remember, in the United States, these can no longer be discharged through bankruptcy) you are starting out with a millstone around your neck. That’s why the pressure to “get a degree to get the job” has become so great (instead of people studying to suit their own needs and desires).

You may say it can’t be done. Hogwash. My daughter did her undergraduate work as an international student, paying full fees plus living expenses in one of the world’s most expensive countries, and paid cash. She took time between high school and university to save, and had a job while studying. (Right now she’s on a gap year before starting graduate school, working and refilling the bank account — and yes, she’ll be overseas again when she returned to university next fall.)

As a result, my daughter is studying what interests her, and although she has career ambitions in that field she knows that at the end of it all if there is no job there she’s got a résumé that will lead to other things — plus no debt forcing her to take a job simply because it pays enough to service her past.

The reason we at Personal Due Diligence talk about doing diligence is so that you’re not blindsided by events. But isn’t the real goal to be free enough to live where you want, doing what enriches you personally, while not having it all at risk constantly?

We think so.