As industry distinctions become less clear, company life spans shorten, and the nature of competition continually shifts beneath our feet, it has become almost impossible to manage a fully predictable career.
We all understand that the lifetime contract between companies and employees expired decades ago. Today, we are faced with an ever-starker challenge: managing careers against the oxymoronic backdrop of permanent uncertainty.
Whitney Johnson, author of the book Disrupt Yourself: Putting the Power of Disruptive Innovation to Work has been studying the relationship between disruptions in industry and what it means to us as individuals for more than 20 years.
Johnson says that even as volatility has increased in recent years, professionals in some industries are affected more than others. If you are in, say, the business of making appliances — something that requires a lot of startup capital — you might feel more protected. If you’re in the professional services sector supporting that industry, you are far more exposed.
But make no mistake: The forces of change will eventually find us all.
So, what’s the upshot for individuals trying to thrive (and survive) amid all the upheaval of our digital world?
In this week’s episode, Whitney Johnson focuses on these Three Big Points:
- Be on the lookout for signs of volatility. It’s now a career-management mandate. It’s on you to see the change before it happens.
- Look for opportunities to apply your talents elsewhere within your industry — this expands your network and your breadth of experience.
- Never stop developing new skills. The world as it stands lasts but for a moment. You need to change with it, or you’ll find yourself out in the cold.
For Further Reading
Whitney Johnson is one of the 50 leading business thinkers in the world, an expert on disruptive innovation and personal disruption, and author of the book Disrupt Yourself: Putting the Power of Disruptive Innovation to Work. Johnson tweets @johnsonwhitney. Some of her recent articles include “What to Do When Industry Disruption Threatens Your Career” and “Disrupt Yourself.”
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Episode 2: Three Big Points About Managing Your Career in the Age of Disruption
Whitney Johnson: Well if you look at the 500 companies that were in the S&P 500 at the beginning of the ’90s, only 70% of those were still in the S&P 500 at the end of that decade. What’s interesting is that during the 2000s, that survival rate dropped from 70% to 60%.
What you want is you want a skill that works across industries. But also you want to keep that skill of knowing how to learn, that willingness to disrupt yourself, to be at the bottom of a learning curve not knowing how to do something — to keep that muscle very, very strong.
Paul Michelman: I’m Paul Michelman, and this is MIT Sloan Management Review’s Three Big Points. Each episode, we take on one topic that leaders need to be on top of right now and leave you with three key takeaways for you and your organization.
I think we all recognize that we live in a volatile world. But just how volatile? Is this a unique moment in history, when the world really is unprecedented in its unpredictability? Or are we caught up in the moment a little too much?
No. It’s real. When it comes to business, the numbers don’t lie — at least not in this case: Volatility is increasing.
Whitney Johnson: Well, if you look at the 500 companies that were in the S&P 500 at the beginning of the ’90s, only 70% of those were still in the S&P 500 at the end of that decade. So 30% had dropped out. But what’s interesting is that during the 2000s, that survival rate dropped from 70% to 60%.
Paul Michelman: That’s Whitney Johnson, author of the book Disrupt Yourself: Putting the Power of Disruptive Innovation to Work, and she’s also coauthor of the MIT Sloan Management Review article “What to Do When Industry Disruption Threatens Your Career.” Johnson has been studying the relationship between disruptions in industry and what it means to us as individuals since she was working as a financial analyst in the ’90s and early 2000s.
Whitney Johnson: I had been working on Wall Street and really had this “aha” at one point (when I was actually looking at my own career) that this whole theory of disruption — established companies become complacent, then they fail to anticipate their collapse, [and] there’s sort of this tragedy playing out — this whole idea of disruption wasn’t just about products or services or companies or even countries, but it was also about people.
Paul Michelman: She says that, of course, even as volatility has increased in recent years, professionals in some industries are impacted more than others. If you’re, say, in the business of making appliances — something that requires a lot of startup capital — you might be more protected (for now). But if you’re in the professional services sector supporting that same industry, you are far more exposed.
Whitney Johnson: If you’re a large retailer, and you’re thinking: “All right, I’ve got to compete with smaller competitors, I’m going to mine all of the data that we have to figure that out. We don’t have the capacity, so we’re going to hire a consultant.” The consultant then helps them, but then as the retailer gets better and better at mining their own data, they don’t need the consultant anymore.
Paul Michelman: Johnson and her colleagues were able to measure the phenomenon of career volatility in a concrete way by looking at financial analysts. Being an analyst seems like a job that would be relatively safe from big market swings. But they found a pattern: You could see how different aspects of the economy were doing by looking at who was analyzing those industries. And people who are experts in the industries going under did not fare well.
Whitney Johnson: Institutional investor polls — they rate how effective analysts are. Here’s where we did the analysis. If you see big changes in the number of analysts being rated in a sector and/or how many people are repeat awardees (they do the poll every year) — this is really a barometer for you of what’s happening in that sector. Why did this happen? Because most of the companies that did well in 2000 were either acquired or bankrupt in 2010. And so as the companies collapsed, the equity analysts tied to those sectors did too.
Paul Michelman: So this comes as challenging news for a whole slew of professionals out there. And the problem is only going to get worse as the economy continues to become more and more connected. As industry distinctions become less clear, skills associated with specific industries and functions become less valuable.
Whitney Johnson: Volatility increases as interconnectedness increases. And what we are seeing, and what we saw in the data, is that the degrees of separation between industries [are] decreasing. So in looking at trade flows … we were able to analyze the average number of steps required to connect any pair of industries — like the six degrees of separation from Kevin Bacon. That average number of steps went from 70 to 64, between 1998 and 2008.
Paul Michelman: Johnson says that we should just assume this volatility will find us — and sooner rather than later.
Whitney Johnson: And what’s fascinating is that we as individuals, we know how to think strategically about the products that we’re selling, the services that we’re selling, or even the businesses that we’re in — but it is often very difficult to do it for ourselves, to really think: OK, if I’m in an industry that could get disrupted, I need to also consider the possibility that I myself can get disrupted.
Paul Michelman: But there is hope. There are things we can do to protect ourselves.
Whitney Johnson: You have to innovate. You have to respond to what’s happening in the marketplace. How do you engage? Are you more nimble? Are you less invasive? Are you able to work across a variety of disciplines?
Paul Michelman: Johnson found examples of people who had success in volatile environments. And, in fact, sometimes volatility can even work to your advantage.
Whitney Johnson: When you move within your industry to another company, and there’s a lot of volatility (like in the software industry), you actually get a 4% pay increase, the more experienced you are. So that can actually be a very good strategy for you over the course of your career. If you perceive that there’s competition within your industry, you know the industry is going to win, you just don’t know which company — you can move and get those bumps in your pay as you go.
Paul Michelman: One of the most important things you can do in a fast-moving world, says Johnson, is to be thinking about and planning for career shifts you might be able to make along the way — and to work with your company to achieve them. We’ve heard it before — but in a world where companies go bankrupt, get acquired, or are disrupted in the blink of an eye — we all need to keep our skills sharp and flexible.
Whitney Johnson: In your 20s, that muscle is quite developed — of knowing how to learn something new and that willingness to learn something new. But the more expert you become within any sort of domain, that muscle starts to get flaccid. And so what you want is you want a skill that works across industries. But also you want to keep that skill of knowing how to learn something new, that willingness to disrupt yourself, to be at the bottom of a learning curve not knowing how to do something — to keep that muscle very, very strong. Because when you’re able to do that, as industry volatility comes about — which it will — then you are continually practiced and prepared to think: OK, what do I need to be learning new this year, this month, next year, etc. So focus on a domain expertise that you can use in lots of different contexts, and then keep that muscle strong of knowing how to learn.
Paul Michelman: And then at this point, forgive me listeners, I couldn’t help myself — I had to ask for a little advice for my family. Forgive me, Georgia Michelman.
Whitney Johnson: So to Paul’s daughter, who is graduating from college shortly, what I would say (and I have children about the same age as well) is to really think about what skills (I think, right now, while she’s still in that really robust, muscular training phase of her life and career) to develop that will be attractive across industries. It doesn’t mean that she has to do that specifically, but she wants to have at least one or two skills that regardless of what industry she’s in, people would look at that and say that’s really valuable that you know how to do that.
Paul Michelman: That’s Whitney Johnson, coauthor with Boris Groysberg and Eric Lin, of the MIT Sloan Management Review article “What to Do When Industry Disruption Threatens Your Career.”
Paul Michelman: OK, let’s get to the takeaways.
Three Big Points on Managing Your Career in the Age of Disruption.
No. 1: Be on the lookout for signs of volatility. It’s now a career-management mandate. It’s on you to see the change before it happens.
Whitney Johnson: You can scout for early signs of volatility at your company, and you can get ahead of them.
Paul Michelman: No. 2: Look for opportunities to apply your talents elsewhere. This expands your network and your breadth of experience.
Whitney Johnson: Take the skills that you’ve acquired and you’ve developed, and then look at another company in the same industry.
Paul Michelman: No. 3: Never stop developing new skills. The world as it stands lasts but for a moment. You need to change with it, or you will find yourself out in the cold.
Whitney Johnson: Bolster your skills that make you attractive across industries.
Paul Michelman: Three Big Points is produced by Mary Dooe. Music by Matt Reed. Marketing and audience development by Desiree Barry. Our coordinating producer is Mackenzie Wise. Special thanks to Deborah Gallagher, Lauren Rosano, Jennifer Martin, Richard Marx, Michael Barrett, Jinette Ramos, and Karina van Berkum for all they do to make this show possible.