Are we becoming meaner?

The recent Deloitte’s CFO Sentiment Index shows an increasing pessimism amongst Australian CFOs. Increased inflation and interest rate movements have led CFOs to take a bearish approach and become more cautious in business spending. Risk appetites are waning as there is no obvious relief in the future.?

There is a glimmer of hope for CFOs with Artificial Intelligence (AI), possibly because of the way it is seen to potentially reduced labour costs, but there is still some skepticism about the future of AI. There is good reason to be optimistic about the future in this regard, but we do have to be more strategic in providing good structures and guardrails before we run too fast with it all.

There are some mixed messages regarding the Labour market. The unemployment rate is still at an all-time low but it is up on 12 months ago. There are also some concerns with youth unemployment continuing to rise. Demographers and statisticians are still predicting a skills shortage in the future even though there has been a slight uptick in population growth since the pandemic. These statistics tell me that it is not the time to cut costs in training and investing in the future employment population, even in the light of reduced funds.?

From a HR perspective, I have often pondered effective motivators for employees as well as volunteers. Herzberg has long differentiated between hygiene factors and motivation in the workforce. The ill-informed CEO thinks it is good enough that they pay their workers without seeing the need to provide motivators to aid job satisfaction, but it is not. In working with volunteers, the need to provide encouragements that do not take up too much time and are cost effective is something I have often grappled with. It is not uncommon for volunteers to cost more time to manage than the relief they provide through their assistance, so good management is essential. The same is true for employees and if we can’t just keep increasing salaries, we need to be more creative in our incentives.

All this doom and gloom leads to a depressing outlook. When we become depressed, we become insular, overprotective and risk averse. On the back of the pandemic where some are still suffering from mental health issues due to losses of loved ones, freedoms or social milestones, and may feel a little worse for wear. This applies to individuals, companies and societies.?We need to proactively guard against becoming cruel and hone our empathy skills.

Globally we have seen an increase in Far-Right politics with increased emphasis on justice and self-protection rather than an outreach approach. There is an increased emphasis on individuals’ rights and providing more for one’s own self. Of course, we need to be more careful when the money is tight. Profits aren’t as high, and our governments don’t have the same money to throw around post Covid stimuli or as they did during mining or other booms. Charities in particular are finding it difficult with reduced income and increased demand. Interest rates are up so those with money need to be wise in their investments. Now is not the time to have lazy money, which comes back to now not being the time to be too risk averse. in my article, Penny wise and Pound Foolish I address the need to be wise in cutting costs. ?

As more and more are doing it tough, how do we guard ourselves from spiralling into mistrust and despair? I know it sounds trite, but the first step is to smile more. Most likely you will never know the benefits your smile will produce, but others will. Foster an attitude of gratitude by whatever means works for you. One year (which I anticipated might be a tough year) I started a jar of gratitude where I put a note of thankfulness in everyday. It was helpful to start each day reflecting on what I had to be grateful for and that jar continues to be a source of encouragement.

Try to apply a strengths-based approach [1] to everyone you meet or encounter. You will always have to work with people who exhibit jerk like behaviour so work out how you deal with it. Taking a Trauma Informed approach [2], it is helpful to ask why someone may be behaving the way they are rather than writing them off as jerks. There will be times when steps need to be taken to protect others from bad behaviour but where possible start with a positive approach, giving the benefit of the doubt.

All of this sounds too good to be true, and to some extent it is. The sting in the tail is that it all has to be accompanied with hard work. You can’t afford to be an ostrich with your head in the sand, neglecting all the doom and gloom. You have to be a realist but also embrace it. It is going to be tough. You also have to look after your own mental health to guard against despair.?This means objectively seeing yourself as a resource which may need to be utilised fully at times and rested at others times for restoration in preparation for what may come.

Malcolm Fraser, the 22nd Prime Minister of Australia was famously known for his role in the dismissal of Gough Whitlam, his cost cutting measures as part of the “razor gang” of the day, and for saying “Life wasn’t meant to be easy”. What is less known about him is the great strides he made in human rights. He has been referred to as the Liberal Party’s last Keynesian Prime Minister. He took an active role in foreign policy (in particular, Apartheid in South Africa and other controversial African issues), Indigenous rights and addressing humanitarian issues in immigration. Despite primarily running deficit budgets he did manage to cut costs and provide structure for a prosperous Australia.?He practised what many politicians since him failed to do. He invested in our infrastructure and culture rather than selling the farm (used as the colloquial for infrastructure) and stuffing money under the mattress. He positioned us to be a kinder country.

In tougher times we still have to make difficult decisions, and we won’t always be liked for those tough decisions. So much more effort needs to be put into weighing up outcomes for all decisions, negotiations and change management. All this takes more consultation (listening) and thinking. It requires tightening the belts in some instances, and spending more, even if you don’t have it, in others. It also requires self analysis of your risk profile, including addressing your worst fears and learning how to mitigate them. (By your, I mean you as an individual and actor in whatever scenario you are dealing with AND the entity or corporation that you are a part of, as a whole.)

Our relationship with all stakeholders, from employees, customers, suppliers, shareholders/members, competitors and anybody in between needs to be considered when cutting costs or looking at growing income. (Feel free to contact Zamagias Consulting if you would like help in conducting a stakeholder analysis on your organisation).

We do know already though, that keeping and motivating staff is getting more difficult, so in most instances this is where we have to do most of our hard thinking.

It wasn’t easy for Sir Malcolm Fraser, and it won’t be easy for us. We will have to roll up our sleeves. We all have to be strategic and creative in our encouragement of workers, in our cost cutting and in our planning for the future. It will not only be better for you, but also better for others if you can do it with a smile on your face.

[1] A strength-based approach is a way of working that focuses on abilities, knowledge and capacities rather than deficits, or things that are lacking.

[2] Trauma Informed Care recognises and considers the signs and symptoms of trauma, and the varied responses to trauma in both individuals and cultures.