As this recession accelerates, will your career accelerate with it? Or fall behind?

It is one thing to recognize that your career has hit a brick wall. There are solutions for this.

The appropriate strategy is different when your career hits a detour because of the recession.

One of the reasons why the general public does not perceive what would previously have been regarded as recessionary economic conditions is that the employment rate has stayed high. One of the reasons for this is that the United States has moved from a manufacturing economy, in terms of its total labor force, to a service-based economy. This does not mean that America produces fewer goods than it did two decades ago. What has changed is that the labor force has been cut by 50% in the manufacturing sector. American workers in manufacturing are far more efficient today than they were two decades ago. But to have survived, they had to make adjustments to a high-tech world.

Unemployment generally does not hit white married men. Whenever we read about rising unemployment, we should bear in mind that people who read economic newsletters are probably not going to lose their jobs. They may get their careers sidetracked for a time. They may find that their employer can no longer keep up with wage rates in the industry. But, generally speaking, white, middle-class, married males do not lose their jobs in a recession.

A few employees do find that they are unprepared for the new conditions. This is especially true for men who are over age 50. These men have been the sacrificial lambs of outsourcing, computerization, and the flattening out of business hierarchies. The specialized information that they used to provide to their employers can be delivered by software. Their market niches have been eroded by competitive factors that only began to appear 20 years ago.

Because readers of newsletters and Websites like this one do not feel the pain of recession early in the process, they may not perceive that the terms of trade between employers and employees have shifted. Things seem to be bumping along fairly well, despite the fact that the stock market is down, real estate prices are falling, and there seems to be no engine of recovery on the horizon. Because their jobs appear to be safe, they assume that their careers are equally safe. This is a mistake.

I distinguish between a person’s job and his career. Sometimes they are the same. Four decades ago, they were almost always the same. But these days, because of outsourcing, international competition in business, and technological competition from computers, an individual finds that he does not lose his job, but his career has hit a dead end. Anything like automatic promotion is a thing of the past. This is even true in Japan, where promotion by time served was almost automatic. International competition has made this practice a thing of the past. So, a person who thinks that he has a career path in front of him is living in the past. Today, a career path is hacked out of the wilderness by the equivalent of a machete. If you do not have a machete, and if you are not skilled in its use, your career may be more in the past than it is in the future.

Young men who are entering the work force today, or who have been in it for less than a decade, already are aware of this phenomenon. They get bounced around from job to job in these years. It is difficult to find any job with something resembling a tenure track today. Tenure-track jobs that once were synonymous with careers are becoming exceedingly scarce except in high-technology fields such as engineering. Even here, someone who does not keep up with the industry is going to find that his career hits a brick wall within five years. There is no coasting possible except in government employment.

This is why an individual has to develop a personal training program in which he systematically keeps up with developments in his own niche, but also keeps up with general trends. He needs to know what is happening in general categories because these can affect the survival of his particular niche. It does no good to be a master of a niche when the general market is moving away from a particular service that is represented by the niche. A person had better be flexible if he wants to escape the possibility that his niche will be outsourced or replaced by technology.

Let me give you an example. Consider a physician. The generalist who deals with people on a daily basis is probably not going to change his career. He may have to change his expectations regarding income, because government entry into the field of health care has distorted prices and has added costs. So have legal expenses. But, on the whole, the generalist is not going to see his career change by much. But specialists in niche fields are facing tremendous competition from sources that did not exist 20 years ago.

Surgical procedures in India, Southeast Asia, and South America sell for half the price or a third of the price that they cost in the United States. At the same time, international plane fares have fallen dramatically over the last 10 years. Even with increases because of rising fuel costs, the cost of international travel is much less than it was 10 years ago. This means that Americans can shop for non-emergency procedures. They can get competent medical care, sometimes delivered by physicians who are fluent in English, for a fraction of the cost of the same medical procedure in the United States.

A physician who does not recognize that he must now sell his services to patients who have economic options will find that his career does not advance. A career means advancement. It means that you are paying attention to business. You are committing time and money to staying ahead in your field. This is your calling: the most important thing you can do in which you would be the most difficult to replace.

WHAT I LEARNED FROM LARRY ALTSCHULER

Probably the best example I had as a young man was a friend of mine in high school, Larry Altschuler. He was the only friend I knew who worked in his father’s business. His father was in the restaurant business — a very tough business. It is easy entry and high attrition for business owners. He had his own small restaurant by age 19, as I recall. I don’t think he went to college. I left town at age 17 and only rarely returned.

Fifteen years later, he had a nice restaurant in Manhattan Beach, California: “The Bay Nineties.” (The region is called the South Bay.) On a return visit in 1973, I took my wife to eat there. It no longer exists.

I have not seen him in 35 years, so I’m guessing about his business strategy. He probably made his profit in liquor sales. So, his strategy was to get lots of people into the restaurant and sell them drinks while they were waiting for a table. He needed more patrons than dinner tables. He had this amazing, unheard-of approach to get a long line: low dinner prices and high quality. You even got a choice of side dinner entries — a mini-meal. I ordered spaghetti. (Note: I remember this from 35 years ago.) Spaghetti is cheap, but it has high perceived value for spaghetti lovers. It was good spaghetti sauce, which is the key to spaghetti.

Here was the capper. When your meal was over, your waiter brought out a large serving tray filled with uncooked food: salmon, filet mignon, and lots of other expensive stuff. You could buy your next meal for $1. You made your selection, and he brought it back in a “doggy bag.” Do you think Larry had repeat business? Do you think he sold a lot of booze? He was the first businessman I ever knew among my peers. I did not appreciate just how skilled he was, and how innovative in a generally non-innovative field, until I was in my thirties — about the time I started my own newsletter business.

His father ran a restaurant. Larry knew in high school that he would be going into this field. He was an active participant in the Junior Achievement program. He invited me to join. I was not interested in business at the time, so I never did. He was the only person I knew who did join.

He was the only person I knew who owned his own business at age 19. He told me that every morning he got up at 3 a.m. and drove into Los Angeles to the Farmer’s Market. There, he would buy produce. His father had taken him when he was still in high school to learn how to do this. I did not know that when we were in high school together.

The idea of getting up that early to drive into Los Angeles to examine heads of lettuce was not the sort of thing that anybody else I knew was doing. He was doing it, but he never told me. This is the kind of dedication that it takes to run a successful business. He learned early. Nobody I knew in high school would have had any incentive to do this, or any idea that this is what he would do after graduation.

He did not drive into Los Angeles every morning to save money. The time costs were too high. He did it to get the best produce for his customers. He told me that by getting there early, he got the best goods. Those who arrived later got leftovers.

He understood quality. Even when most customers don’t appreciate high quality, a few will. Even if they don’t, the business owner develops a mindset: deliver a high-quality product to your customers.

The key to success in most businesses is repeat business. The key to repeat business is high quality. Anyone can cut prices. It is not easy to raise quality and still keep prices low enough to stay in business. Repeat customers in the non-fast food restaurant business return because of high quality.

Anyone who goes to college who has the attitude that he had in running his business will be highly successful as a student. This kind of dedication is extremely rare. But when your money is on the line, and you’re in a business in which there is open entry and stiff competition, you have to pay attention to details in order to prosper. He was willing to do this.

It was not until I hit retirement age that I began getting up at 4 a.m. to begin running my new Web business. I find that this is what it takes to run a successful Website. I do my writing early in the morning, and then I run my question-and-answer forums later in the day. Going online at 4 a.m. and reviewing what I had written the day before, and then writing material for the next day, is my equivalent of going into the Farmer’s Market. There is early morning work that must be done in order to operate a functioning business through the day. What my friend Larry knew it age 15, I finally adopted at age 65.

It was not clear to customers how much work it took him to deliver meals during rush hour. This is as it should be.

The easier you make your work look, the better your impression. If you give the impression that you are just barely surviving, just barely staying ahead of the day’s disasters, your work ethic will be respected, but your boss may hesitate to promote you. If you’re just barely hanging on today, how well will you do in a new slot, with greater responsibilities and new areas to master?

In contrast is the person who seems to be able to achieve his daily tasks almost effortlessly. He may be like a duck on a pond: sliding silently across the surface, but paddling like mad beneath the surface. If you can give the impression of being on top of things without also giving the impression of being just barely on top of things, you will be perceived as a low-risk candidate for advancement.

GOING ON THE OFFENSIVE

If a company wishes to expand its market share, it should do this in times of economic crunch for the industry. While other firms are cutting back, playing the turtle, an aggressive company can gain market share by investing in advertising and marketing.

The same is true in your career. If you can gain a reputation for being a go-getter and aggressive in a time when most of your competitors are pulling back, hoping not to overrun their budgets, hoping not to make a major mistake, you can call attention to yourself and your value to the company. The risk goes up, but the reward also goes up.

I am strongly of the opinion that in your career, the best defense is a strong offense. I don’t think it is a good idea to be perceived as being in defense mode in a time of cutbacks. It is much better to gain a reputation of being aggressive, competent, and willing to branch into new areas when times are bad. An employer looks for this kind of person in good times, and he hesitates to fire someone like this when times get tougher.

The person who hunkers down, plays the turtle, and tries to hide is the kind of person who is perceived as expendable in any organization. He may stay off the short list of people to be fired, but once he is on that list, the likelihood that he will be fired increases sharply. People play the odds by trying to remain invisible, but invisible people can be sacrificed without a lot of pain for the employer. This is why I think playing defense is a high-risk strategy when it comes to your career.

The best time to move up is during a crisis. This is well-known in military circles. People get killed during wartime. This opens up positions. Back in 1838, Alexis de Tocqueville commented on the fact that democratic armies generally favor war. War lets noncommissioned officers rise into the ranks of commissioned officers, because of the openings that take place on the battlefield. They could never have risen in the ranks from noncommissioned officers to commissioned officer in times of peace. De Tocqueville concluded if a nation wants to avoid wars, it is best to have an army of professionals, where advancement is not possible for people who do not enjoy upper-class status. Of course, he understood that in a democracy, this kind of army was disappearing.

A crisis is ready-made for aggressive people. This is why I see the present recession as an advantage. In times like this, people who are really competent can make major gains on their competitors. This is much more difficult in boom times, because everybody seems to be prospering. Everybody seems to be successful. Warren Buffett is correct: nobody knows who is swimming naked until the tide goes out.

As the recession intensifies, you must pay much greater attention to details. You must be alert to opportunities. You probably should increase your commitment in terms of hours. Yet I have said in the past that it is unwise to work for more than 40 hours a week for salary. So, I am really recommending that you combine your job with after hours efforts to increase your knowledge of your niche, and to increase other people’s awareness of your presence in this niche, in such a way that this appears to benefit your company. It does benefit your company, but also benefits you. It enables you to establish your reputation apart from your company.

Presence on the Web is basic to this strategy. You want to be able to establish new beachheads in your career. Don’t devote time beyond 40 hours a week to your company unless this time simultaneously opens up opportunities for your career outside your company. You become more valuable to your employer, but you also become more mobile. Mobility is basic to career success in today’s marketplace.

CONCLUSION

As the economy slows, people will begin to come to grips with the new realities of the employment scene. I don’t think this scene will ever be the same for Americans. The terms of trade are turning against us because of past fiscal policy, monetary policy, and a change from future-orientation to present-orientation. Competition has been increasing. When the dollar falls, Americans’ lifestyles will have to be cut back. This is always painful.

The day of small trucks with high profits is over. Gasoline prices are too high. These trucks are used to haul urban egos, not cargo. Ford and GM bet the farm on these non-farming trucks, and now they must readjust. They have little room or capital to readjust. They waited to long. The Japanese from 1970 became quality minded. They stuck to their knitting. They had to claw away market share from Detroit. They were lean and mean.

Detroit is finished, in every sense. They sat on their laurels. They thought it would be fat city forever. It is more likely to be bankruptcy. The American industry will not recover.

You must adjust whenever you can. This is the lesson of the Big 3. They did not adjust.

Gary North [send him mail] is the author of Mises on Money. Visit http://www.garynorth.com. He is also the author of a free 20-volume series, An Economic Commentary on the Bible.

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