Investors’ Confidence Still Shaky
Approximately 62 percent of financial services professionals polled in a recent survey said government efforts to protect investors and prevent accounting malpractice have had no effect on restoring their clients’ confidence. The survey of nearly 1,000 Farmers Financial Solutions registered agents throughout the United States also reveals that approximately 19 percent of respondents believe regulatory and Congressional efforts to protect investors and implement more stringent business accounting and legal reforms have actually diminished customer confidence.
More than 85 percent of respondents indicate their clients have reallocated investments out of the stock market and into more conservative alternatives in the wake of the Sept. 11 terrorist attacks and the Wall Street accounting scandals. According to the survey, bank accounts and fixed income investments rank as popular investment alternatives to the stock market.
“Investors are still in shock from the blows they took over the last year,” said Dean Dorn, a Farmers Financial Solutions agent in Henderson. “The combined terrorist attacks and accounting scandals served as an effective wrecking ball that demolished trust in Wall Street and left investors standing in the rubble to pick up the pieces.”
Just as investors began to regain confidence after the terrorist strike, according to the survey, an equally damaging blow came from the discovery of the rash of corporate accounting scandals. Sixty-one percent of agents indicate their middle-income clients were starting to invest money back into the stock market earlier this year. However, approximately 62 percent of agents report that customers yanked money out of the stock market in reaction to news of the corporate accounting scandals.
Dorn explained that the uncertainty regarding the stock market is leading middle-income investors in the Las Vegas area to seriously rethink their investment strategies and, many times, resort to more defensive approaches. Forty-nine percent of agents report customers are primarily putting money into fixed-income investments, such as bonds, for safe-keeping; approximately 49 percent report customers using bank accounts as a primary holding spot. Real estate investments also appear to be a popular alternative to investing in stocks and mutual funds.
Is Consulting for You?
Steve Forst, managing director for Right Management Consultants in Las Vegas, reports many job seekers are considering starting a consulting business in response to today’s difficult job market. This is partially due to the economy and partially due to disenchantment with corporate life, said Forst. Job seekers are also finding that, in today’s market, companies may be more willing to hire someone to do a project than to hire a full-time employee.
Forst suggests individuals consider the following items before making the decision to become a consultant:
Do you have a specific marketable skill that is unique or rare? A skill that companies don’t typically employ full-time or that would take a company employee away from the normal job for too long of a period?
Can you financially afford to become a consultant? Do you have enough cash to support your lifestyle until you begin to generate a viable income?
Do you have a good business plan that takes into account all the contingencies and allows for flexibility to change direction if conditions warrant?
Do you have all the skill sets it takes to run a company or the ability to hire specialists like a lawyer, CPA, etc.?
Are you comfortable networking and marketing yourself? Do you have the ability and talent to generate new business?
Do you have the proper insurance (liability, health, business interruption, etc.) in case of unexpected problems?
Is there a partner(s) who can provide the necessary skills that you may not have, and could that person carry on the business if you are incapacitated in any way? Do you have a written agreement that protects you from each other?
Do you have the willingness to put in long hours to get the business up and running and the work ethic to keep it strong?
Have you thought about an exit strategy to get you disentangled at minimal personal cost if things don’t work out?
Make sure to think, plan ahead and gather input from others before you make the leap from the corporate quagmire to consulting, warns Forst.
Unleash Your Inner Innovator
Stephen Shapiro’s new book, 24/7 Innovation: A Blueprint for Surviving and Thriving in an Age of Change, suggests that “innovativeness” is what employers are seeking in today’s ever-changing business world. Shapiro offers suggestions for bringing out the innovator in yourself in order to become a more valuable employee.
Focus on the “end game,” not the daily to-do list. Look forward to outcomes and results rather than specific activities.
Forget comfort and embrace change. Most of us tend to live for the time when things “settle down” and get back to normal, but in today’s work world, things never settle down.
Try “reverse mentoring.” Becoming innovative requires us to continually learn new skills and new technology. If you’re a 50-year-old technology-phobe, ask a computer-savvy younger person to show you the ropes.
Adopt an entrepreneurial mindset. Innovative employees need to act, behave and feel like owners, constantly generating new profit-increasing ideas.
Don’t be a passive recipient of knowledge. Innovative employees don’t just soak up information – they add value by improving operations or by exploiting new opportunities.
Become a “line thinker.” Look for the “lines” – the interconnections and interdependencies – between departments, ideas, companies and industries instead of compartmentalizing them.
Six Dysfunctional Leadership Types
Carl Rowe, director of organization and management development for Fair, Anderson and Langerman, has observed many leaders in 29 years of working as a management consultant to both public and private organizations. He documented the traits and behaviors he observed in bad leaders and developed what he calls Rowe’s Six Dysfunctional Leadership Types.
1. Teflon Don: Teflon Don is the boss who never lets anything stick to him and blames others for whatever goes wrong. He or she will go to any lengths to avoid being responsible for anything negative.
2. All Bound Up: This boss cannot or will not make decisions and constantly procrastinates. Whether from procrastination or fear, she/he just can’t seem to move off the dime.
3. Gutless Wonder: This boss’s idea of taking a risk is to order coffee instead of tea. World War III could be going on in the office and this one wouldn’t even acknowledge it, let alone address the problem.
4. Wrong Rock: The Wrong Rock leader is the one who’s never satisfied with a work product. It’s like being given the assignment to go out and find a rock – when you bring the rock back, the boss tells you it’s the wrong one and you need to go find another.
5. Me, Myself and I: The Me, Myself and I boss is the center of the universe. He or she micromanages everyone and will not delegate. The nice thing about a boss like this is that you’ll never have to do much work. Of course, don’t count on getting much credit, either.
6. Pants on Fire: Remember when you were a kid and someone got caught lying? Everyone would yell, “Liar, liar – pants on fire!” That’s who this one is – someone totally without scruples. “If you’re unfortunate enough to work for one of these,” said Rowe, “my advice would be to update your résumé – and do it quickly.”