Thursday, June 23, 2011

Three Kinds of Work

Amongst other adventures, I spent a good chunk of my career as an Information Technology (IT) consultant, eventually ending up as the managing principal of Brock & Associates. Taking that in context, I made this general observation. Maybe you can relate to the descriptions and consider what unconventional wisdom would suggest.

There are three types of players in the game that we call gainful employment; employees, contractors and consultants.

A contractor lands an IT contract, sits at a desk, and delivers his service. Now while he is handsomely paid for his skills, they are getting obsolete by the day. He always hopes for a contract extension and feels entitled to all the perks of an employee. When the easy times come to an end, he gets caught complaining over his contract termination. All he has is one reference from a client that just terminated him. And that termination usually comes at a time when the economy is in the basement and any kind of replacement utilization is hard to find. The financial transition back to employment is uncomfortable. The expenses are high, the revenue stops immediately, jobs are scarce and it costs to unwind his corporate activity. Any financial benefit he gained as a contractor gets wiped out, so we hope he didn’t live high during the good times and actually saved a big chunk of his revenue. He’ll need it!

An employee, is exactly the same as the contractor except, he doesn’t receive a high hourly rate in cash. Instead he got promotions, vacation, benefits, and is entitled to the perks. In the end he gets caught by the same economic downturn and layoffs as his colleague the contractor. Unfortunately, he discovers that he can’t eat his vacations, the benefits don’t pay living expenses and the stock options are now worthless. And the 3 or 6 month termination package foe which he qualifies barely covers getting another job to start all over again. Finding a new job is extremely difficult because he doesn’t have any practice at doing it. He, too, has one reference in a single industry from a former employer that just terminated him.

A consultant thinks of himself as a small business, not just a contract worker. A small business-person puts effort into marketing & advertising, managing expenses to smooth the cash flows, builds networking references through positive over-delivery of services, assessing tax implications of everything, hiring experts in their fields like accountants to provide corporate guidance, developing multiple income streams, observing industry trends and proactively adjusting for change by taking on frequent new contracts to keep the resume current, fresh and in a variety of industry verticals covering different functional roles. All of that takes effort, time and sometimes cash investment. It is this investment that sets him apart. When he is out of a contract at the same time as his two friends above, he has a resume with a page full of positive previous references. Strangely, he lands another one without much effort or delay.

Saturday, June 18, 2011

Applying Unconventional Wisdom to Business Success

I was in downtown Calgary a while ago. The idea of this blog was born there. It occurred to me that we humans are strong followers of conventional wisdom. It drives our motives, our appearance, our behaviour, our peer pressure, our laws, our religion, our fashion, and so on. Philosophically, one would expect conventional wisdom to lead to success. Or else why would we continue repeating it to the level where it becomes a convention?

Indeed, I would say conventional wisdom is nothing more than a habit which we venerate without thought. Furthermore it is a habit that does not serve us very well. I believe it is time to make more use of the phrase; "What was he thinking?"

Since I run a number of small businesses that have developed a modest level of success, I have the opportunity in my life to spend some time observing people, activity, behaviour and things around me with a questioning viewpoint. So by extending that thought, it also occurred to me that conventional wisdom only results in conformity; it does not lead to success.

Out of that fundamental premise, I asked myself why it seems everyone wants to have a successful life, particularly in the financial sense, yet the vast majority of people do not want to let go of conventional wisdom to achieve it.

There is no shortage of individuals who have blazed the trail in a number of different endeavours. They have demonstrated that success is achievable. It seems you can't look anywhere without seeing self-help books, audio tapes, secret newsletters or DVD programs. Our generation seems to live on the stuff. We worship those successful individuals yet the majority do not follow their advice. I think unconventional wisdom is like common sense; it is a rare commodity indeed.

I've done unconventional things and conventional things. I have achieved success with both of them at different times. It isn't rocket science, but you need to be thinking to know when to apply which one. Business success can be achieved by doing unconventional things. So the trick is to apply some critical thought to continuously assess everything you do.