This Really is Positive if You Think About it

I've triangulated the following thought from the Wall Street Journal, colleagues in the capital markets and my own observations and experiences working with commercial property owners, bankers, architects, engineers & contractors - business is in for a huge test starting in 2012.

The other "shoe" still has not dropped in the commercial loan world. Business and government are still kicking the commercial property debt "can" down the road. My friends, we are running out of road.

For the last few years and even now, we have been hoping things would improve enough that the commercial property debt out there in the market (more than one trillion dollars) would work itself out. It hasn't and we will run out of road in 2012. As one colleague explained, if you have a $25mm loan and the property is only worth $15mm now, what bank is going to refinance that $25mm loan when it matures in 2012? Who's going to help that commercial property owner pay that mortgage? The commerical property owner can't qualify for the refinancing, they can't pay what is now a higher market interest rate and their rent rates (their income), for example, in the case of office buildings, have been negotiated downward to retain tenants. 

Here's the positive news. It is not enough anymore to compete in the world with only yours or your organization's own ideas to edge-out your competition and their own ideas. The bar has been raised. You have to collaborate. You have to combine your ideas with others to trump your competitors, who are only using their own ideas.

Beginning in 2012 collaboratives will survive and thrive in business. Business will be forced to be collaborative, which squeezes out waste between organizations and produces more predictable, valuable outcomes than we are used to seeing now. Sometimes it takes the right challenging circumstances to push us to a higher level.There is nothing but "upside" which is really positive.

Not so fast... India

The Wall Street Journal had an article titled "Few India Graduates are Fit to Hire." It is a great reminder to avoid taking things at face value. You have to do a little homework.

For example, I, like you have been fearful for our country's future because everyone else is catching-up to the U.S., e.g. India is beginning to pump-out a million new engineers per year from its universities.

There is growing evidence that their education system needs an overhaul.

• India still uses a "rote" style of teaching which discourages critical thinking and decision making skills.
• More than half of their fifth-graders cannot read at a second-grade level. 
• 75% of their college graduates can't speak English proficiently or comprehend what they read in English. English is the international business language and a critical skill for those that live outside the U.S.

Things are usually never as bad or good as we think they are. Nonetheless, don't take things at face value. Trust and verify is not a bad idea.

You Have to Hire or Cultivate Hybrids

I visit with CEOs weekly. In addition the last two weeks, I have had coffee with a few executive recruiters that focus on senior-level positions and it sparked this blog entry. I was asked what CEOs are looking for as they begin to hire again. My answer - before 2008, you could be successful being only an "operations person." Not anymore. Since 2008 the game has changed and you have to be good at operational functions in an organization, realize you are in the marketing business and make business development part of what you do. You are a hybrid.

CEOs have two choices: 1. you can hire hybrids away from someone else which is difficult because there are not that many (there was not a call for this type of person before 2008) or 2. you can cultivate your own hybrids.

I offer this "data point" to you - recruiters in the market are looking for these hybrids on behalf of their clients and I'm engaged in several projects and discussions for projects to support organizations in their effort to cultivate their own hybrids.