The Risk of Constant Learning
“Because of interest rates, inflation, and layoffs across the country, we’ve identified twelve percent of our team we can reduce. We’re targeting late February. What do you think?”
I hadn’t seen this coming.
My client had five consecutive years of record revenue and profits. They’ve been in business for 57 years.
Throughout the last four years—ignoring the chaotic months of March and April in 2020— they’ve been actively trying to hire more staff to serve their growing customer base while limiting the burnout of their talented staff.
2022 had finished on a high note.
January exceeded their profit target by 3.9%.
And yet . . . they were now asking for my opinion on a shotgun layoff.
I had questions.
Is your sales pipeline contracting?
No. February is actually up 6 percent.
Are key customers cancelling projects?
No, our third largest customer wants us in a new market.
Are suppliers warning of supply chain disruption?
No. The supply chain isn’t fixed, but it’s getting better.
Is your bank yanking your revolving line of credit?
No.
Has your competition told you about their strategy of employing a long-term, desperation- based, race-to-the-bottom pricing model?
Umm, no. They have not.
“Just curious, then,” I said cautiously, “why would you choose to lay anyone off?”
“Well, every time I open the Wall Street Journal or turn on Fox News, we hear the constant chirping of negativity. We feel like we’re missing something obvious, like the vultures are circling overhead and we just can’t see them. You know what I’m saying?”
I noted the use of a pair of aviary references.
Stopping the creation of your own thoughts to give room for the thoughts of others reminds me of Shakespeare’s remark about his contemporaries who sold their land in order to see other countries.
- Arthur Schopenhauer (1788-1860)
There’s an inherent risk for leaders in constant learning:
Their ideas will become your ideas.
Their biases will become your biases.
Their behavior will become your behavior.
Despite knowing that differentiation is the key to competitive strategy, 40,000 years of human evolution has us hard-wired to follow the herd, to crowdsource our opinions rather than develop our own.
To answer my client’s question, “Yes. Of course, I know what they’re saying.”
I struggle with it too.
And no, of course I don’t know what’s going to happen next.
What I do know is that Google and Amazon and Facebook and Salesforce (don’t even get me started on Twitter) hired tens of thousands of employees during the first year of the pandemic to serve the millions of us locked at home developing new online buying habits.
Meanwhile the construction industry struggled with a labor shortage.
Now these tech companies are laying people off, despite multi-billion dollar net income statements . . . and the construction industry continues to struggle with a labor shortage.
This makes sense to me. The unemployment rate is as low as it’s been since 1969.
I know our clients—commercial GC’s, heavy highway firms, residential builders, LBM dealers, distributors, manufacturers, and universities among them—tell us that while they are catching their breath from the breakneck pace of the last few years, they’re still plenty busy.
And I know we’re actively hiring.
For many in the construction industry, the limiting factor for growth is labor. The limiting factor is not capital, it’s talent.
There remains more work than we can handle, despite the interest rate and inflation—two economic factors none of us can do anything about.
So, what can you do?
Three things:
1. Develop the right mindset.
2. Talk to your customers, prospects, and suppliers.
3. Shut off your phone and think.
One of the best tools I’ve found to develop my own mindset is re-reading an essay/keynote by William Deresiewicz, a former professor at Yale and Columbia, that he delivered to the plebe class at the United States Military Academy at West Point in October 2009.
It’s titled Solitude and Leadership. In it, he argues that solitude—the ability to be alone with your thoughts—is one of the most important necessities of true leadership. Deresiewicz writes:
We have a crisis of leadership in America because our overwhelming power and wealth, earned under earlier generations of leaders, made us complacent, and for too long we have been training leaders who only know how to keep the routine going.
Who can answer questions, but don’t know how to ask them.
Who can fulfill goals, but don’t know how to set them.
Who think about how to get things done, but not whether they’re worth doing in the first place.
After you’ve got your head right, listen to those that matter.
Talk to your best customers.
- What are the biggest risks—and opportunities—they face?
- What are their current needs, fears, and pains?
Talk to your best prospects.
- What do they know to be true?
- What do they feel may be true?
Talk to your best suppliers and vendors.
- What steps could your firm take to lower the cost drivers in their business?
What can you do to help all of them perform better?
To think better?
To generate useful answers, you’ll need to reflect.
You’ll need to shut off your phone and think.
William Deresiewicz again:
It seems to me that Facebook and Twitter and YouTube—and just so you don’t think this is a generational thing, TV and radio and magazines and even newspapers, too—are all ultimately just an elaborate excuse to run away from yourself. To avoid the difficult and troubling questions that being human throws in your way.
Am I doing the right things?
Do I believe the things I was taught as a child?
You are marinating yourself in conventional wisdom. In other people’s reality: for others, not for yourself. You are creating a cacophony in which it is impossible to hear your own voice, whether it’s yourself you’re thinking about or anything else.
My client is not laying anyone off this month.
We detailed several potential scenarios that could unfold in the coming months. We then assigned probabilities to the likelihood of those scenarios happening. Lastly, we documented the individual assumptions that underpin those probabilities.
We all now get to learn whether our predictions were correct or not. My client has confidence in a handful of dispassionate next steps to take in the near future, regardless of what happens—good or bad.
There’s an inherent risk in constant learning:
Their ideas will become your ideas.
Their biases will become your biases.
Their behavior will become your behavior.
Constant learning leaves no room for you to figure out what you really think.
Continuous learning?
Sure, that’s a noble pursuit.
Never stop learning.
But constant learning?
Constancy leaves no room for independent thought.
Constantly reading the headlines?
Let the birds chirp.
That’s what they always do.
Constantly listening to the pundits?
Let the vultures circle.
That’s what they always do.
Constantly letting other people shape your perspectives and your earned insights?
Nah.
That, my friend, is for the birds.
Quick coda here: Are we aware that reading this newsletter could be perceived as a violation of the very thing we're advocating? Yes. Writing these podcasts and newsletters is our method for thinking about what we think and helping our clients and friends think through their thinking. Hopefully this helps you in some small way too.
Thank you for reading.
