Use Green to Grow (Not Just Cut Costs)

In the face of the current recession, there has been much talk about using sustainability to "get lean" by being more efficient. But in every crisis is also a hidden opportunity to grow, and today's economic turmoil is no exception.

For society and business, this crisis presents the rare chance for deep, fundamental, and significant change. Leading businesses, then, will look beyond cost-cutting. They will use sustainability as a lens to find ways, even in today's economy, to grow their top line — and to be poised for breakthrough success when macroeconomic conditions improve. Smart businesses will emerge from this downturn stronger than their competition by focusing on their customers' changing energy and environmental needs, preparing for a new policy landscape, and investing in tomorrow's clean technologies. Here are three ways to start:

1. Create more products that meet customers' energy and environmental needs
Seldom does a global trend provide the opportunity for businesses to fundamentally redefine their value propositions and relationships with their customers. The rise of the internet was one such trend; so is the run-up in mainstream awareness of energy and environment issues. Companies that are creative and disciplined will seize the opportunity of environmental sustainability to create innovative new offerings built around energy and environmental issues for consumers and business customers of all stripes.

Although the economic crisis may have caused resource scarcity and climate change to fade temporarily from the top of the public's agenda, the serious challenges we face remain. Companies that provide products and services to help their customers meet environmental challenges will out-green and out-compete those that don't. For an example, look at Johnson Controls, which is focusing on retrofitting existing buildings with systems that use energy more efficiently. (The building sector is responsible for about 40% of energy use in the U.S.). Similarly, a prominent real estate investment firm is leveraging the extra time its deal originators now have on their hands to scan the portfolio for efficiency retrofit opportunities that will increase asset values when the market rebounds.

You might think that green sales have slumped, but emerging research suggests that green products and services are in fact less recession-prone. While "eco-luxury" has fallen out of fashion, a range of recent studies suggest that the market for environmentally smart products remains strong. (This makes sense when you consider that the biggest obstacle to a green purchase is not cost, but customer knowledge that the product or service exists - that there's something better than the market's status quo offerings.)

2. Set your sails for new policy winds
A dramatically different policy environment has arrived. For new laws on climate, it's no longer a question of "if," but "when." Legislation to slow or reduce greenhouse-gas emissions is coming and it will affect every business, in every sector. And it's just the beginning. From new building requirements to fuel-economy rules to billions instimulus funding for green jobs, there is a lot at stake.

Firms that anticipate and understand the range of likely policy scenarios, and build defensive and offensive strategies to address them, will succeed where their competitors won't. IBM, with its Smarter Planet initiative, is just one company that is actively engaging its customers to help them address the challenges and opportunities of the changing policy landscape.

3. Invest for tomorrow, starting today
We can't be certain whether we have started to hit the bottom of this recession, but we will eventually — and mortgaging the future, particularly where environmental issues are concerned, is a poor strategic choice. Economic recovery is likely to raise energy and commodity prices, bring more of the world's people out of poverty, and further the demand for breakthrough green products and services, from the 80-mpg car to environmentally aligned financial products and professional services. Investment in tomorrow's offerings must begin today. In the spirit of this investment, GM is sticking with its commitment to produce the potentially game changing electric Chevrolet Volt, even in the face of potential bankruptcy. Will your company show the same courage?

Environmental innovation is a crucial component of the corporate strategies needed to succeed in the current downturn — and thrive when it ends. A relevant, credible, and differentiated sustainability strategy remains a path to business success. Embarking on that path is the opportunity of our time.

Nicholas Moore Eisenberger is Managing Principal of GreenOrder, an LRN Company. GreenOrder is a strategy and management consulting firm that, since 2000, has helped leading companies turn sustainability into business value. Ted Grozier is an Associate at the firm.

A Primer on the G.M. Bankruptcy

General Motors followed Chrysler into bankruptcy on Monday in a case that will be one of the largest and most complex in history. Here is a quick look at some basics of the G.M. bankruptcy and how it may affect owners of G.M. vehicles and company stock. The questions were answered by Micheline Maynard, who writes about the auto industry; Ron Lieber, the Your Money columnist; and Tara Siegel Bernard, a personal-finance reporter.

A Hummer showroom in Tustin, Calif., had as many potential customers on Monday as it did salespeople on the floor: none.

A Chevrolet and Buick dealership in Santa Monica, Calif., wants customers to know it is still in business despite G.M.’s troubles.
Q. Is G.M. going out of business?
A. No. G.M. is reorganizing under Chapter 11 of the United States Bankruptcy Code. The law allows companies to sell assets, restructure debt, cancel contracts and close operations that normally would have to continue running. Once the companies secure financing to emerge from bankruptcy, they are reconstituted as new legal entities.

Q. How long will this take?
A. Senior White House officials say the essence of the case should take 60 to 90 days. General Motors plans to use Section 363 of the bankruptcy code to sell assets, rid itself of liabilities and restructure its debt, creating a new version of G.M.
Late Sunday, the bankruptcy court approved the sale of Chrysler assets to Fiat, only a month after its case began. The remaining pieces of Chrysler will remain in bankruptcy for at least several more weeks. Such quick bankruptcies are unusual; most take much longer.

Q. Who will make decisions about G.M.’s future car and truck models?
A. G.M. says it will. But the Obama administration recently announced stricter fuel economy standards, and the president is an advocate for hybrid electric vehicles and small cars. So G.M. may indirectly be guided by government priorities.

Q. What happens to G.M. dealers?
A. G.M. is able under bankruptcy to cancel franchise agreements with its dealers. It has already announced plans to eliminate 1,100 dealers and may cut more. The company wants those dealers to close within 18 months. Dealers can sue to block the action, but a final decision would be up to the judge. In the meantime, G.M. will continue to provide dealers with vehicles.
GMAC, with support from the government, will provide financing for G.M. customers. It is also providing financing for Chrysler.

Q. What’s the biggest difference between the G.M. and Chrysler cases?
A. Chrysler had reached an agreement to sell assets to Fiat before its case began. G.M. is trying to restructure on its own, with financing from the Treasury. The Treasury is providing G.M. with $30 billion in debtor-in-possession financing so it can operate while in bankruptcy, in addition to about $20 billion G.M. has already received. It is likely the Treasury will provide more scrutiny and guidance in the G.M. case, since such a large amount of taxpayer money is at stake.

Q. What happens to G.M. employees?
A. G.M. employees who are not union members do not have any job security. The company can ask a judge for an immediate pay cut for its salaried employees, and can announce job cuts and close offices, just as it can outside bankruptcy,
Contracts covering members of the United Automobile Workers union and other unions will remain in force, unless the company asks a judge to void them. But U.A.W. members approved changes last week, and the new G.M. is expected to honor that contract.

Q. Are pensions and retiree health care benefits protected?
A. The White House said Sunday that, assuming the sale went forward, G.M. workers’ pensions and health care benefits would transfer to the new company and remain in force.
Companies have the right under bankruptcy law to ask to terminate their pension plans. If pensions were terminated, employees would receive reduced benefits through financing from the federal pension agency.
A company can also eliminate retiree health care benefits for nonunion employees; they would subsequently be covered by Medicare if they were 65 or older.

Q. What happens to G.M. suppliers?
A. The White House said supplier contracts would remain in force, and it has created a program to provide federal help to parts makers. But in bankruptcy, supplier contracts can be canceled.
G.M. is likely to tell the court which suppliers it wants to keep doing business with and which contracts it wants to reject. Suppliers can challenge the rejection of their contract, but most likely they will have to reach a settlement with G.M.

Q. Will the warranty for G.M. vehicles be honored?
A. Yes. The Treasury Department has already said it will stand behind warranties for cars purchased during the restructuring period for both G.M. and Chrysler. And G.M. itself said that it would honor existing warranties. If you own, say, a Saturn and the company ultimately does away with the brand, other G.M. dealers will perform the repairs.

Q. Are any current stockholder’s shares worthless? What options exist for stockholders?
A. Sell, if you possibly can.
The shares will no longer trade on the New York Stock Exchange beginning on Tuesday. But the stock is likely to trade, in a limited fashion, on the Pink Sheets, an electronic quotation system for companies that do not meet the listing standards for the stock exchanges.
Most shareholders are typically wiped out in bankruptcy, financial planners said, which is why G.M. stockholders should probably dump their shares if they can. Warren F. McIntyre, a financial planner in Troy, Mich., said that many people “don’t realize that usually a new share class is issued and the holders of the old shares are wiped out.”
But getting rid of the stock may be difficult, and if you have too few shares, the brokerage commission alone may wipe out any proceeds from the sale.
If you have the actual stock certificates, you might try to sell them on eBay. You may be able to get more for them as collector’s items. It’s worth a shot.

Q. What is a G.M. car worth?
A. The value of G.M. cars will probably fall faster than it would have absent bankruptcy. How much further the value falls will depend on the model, the year, economic conditions in the future and how the company handles itself in bankruptcy.

Q. What will happen to the Hummer brand, servicing for owners and buying out a leased Hummer?
A. There’s some good news here. It appears that G.M. will be able to sell the Hummer brand and all of its dealers to another company. If this happens, the new company will aim for a seamless transition. It probably won’t be seamless, but it most likely will beat the alternative, which is G.M.’s dropping the brand altogether.

Q. Is G.M. still going to honor recall notices?
A. They’d be crazy not to, but we can’t confirm this yet. Here’s what Kelly Cusinato, a G.M. spokeswoman, said in an e-mail message: “We understand that customers have many questions. As you know though, there are certain things we cannot answer until the judge makes rulings.”
Keep an eye on http://gm.com/restructuring for more information as it becomes available. Or call (866) 405-4005, though so far the people answering the phones there seem to be mostly reading off scripts or from the Web site.

Q. Why would anyone buy a G.M. product during bankruptcy?
A. Some of the cars are going to be real bargains. A dealer being forced to close will want to get rid of inventory quickly. Or, if you visit a dealer with nearby Japanese or German competition, that dealer needs to move the metal.
Anyone worried about disappearing dealers and parts shortages could hedge a bit by buying one of the few G.M. cars with above-average reliability ratings.

This article has been revised to reflect the following correction:
Correction: June 5, 2009
An article on Tuesday about the practical implications of the bankruptcy filing by General Motors described incorrectly the size of payments to retirees should the automaker terminate its pension plans. While many retirees would receive lower benefits from the federal Pension Benefit Guaranty Corporation than they were expecting from G.M., the payments would depend in part on their age at retirement and would not necessarily be “about a third” of their expected benefits. The error also appeared in a similar article on May 1 about the implications of Chrysler’s bankruptcy filing.

GM's Second Great Crisis

General Motors is back in trouble, again. The last time it faced a crisis so severe was in the stretch from 1917 to 1922, when World War I precipitated a collapse in the demand for automobiles and Ford's mass market model had started producing cars at prices GM couldn't match. GM was at death's door, and only a healthy infusion of cash and financial restructuring saved it. Actually, not just saved GM — made it great.

But unlike this time around, when the heavy hand of the government is at the wheel, it was an investment from DuPont, whose chairman was instrumental in bringing in the legendary Alfred Sloan to run GM, and a financial restructuring orchestrated by J.P Morgan, that saved the day.

By 1923, Sloan had arranged for the GM management team to acquire a large block of the company's stock from DuPont, financed with a non-recourse loan that would be repaid by diverting bonuses. GM's management effectively participated in the incentives of a leveraged buyout of the firm, but without imposing a like financial risk on the company itself. As for the bonuses, they were based on simply allocating a sizable portion of GM's operating profit above a 6% cost of capital hurdle rate, which gave the managers unlimited upside for achieving income efficiency and balance sheet asset management. There was no calibration of the bonuses to a market pay scale, which only tends to institutionalize a guaranteed level of pay irrespective of performance. There was the risk and the return of the owner on the shoulders of management.

And that, coupled with excellent management, set the stage for greatness.

Over the years, GM moved away from the incentives and value focus of an owner to the incentives of a bureaucrat. Bonuses were hitched to growth in earnings-per-share, and a raft of situational metrics that obscured responsibility for delivering real value. Responding to these incentives Roger Smith, GM's CEO in the 1980s, made a series of decisions that precipitated GM's current woes. The easiest way for him to buy labor peace and keep EPS on a roll was to offer overgenerous retirement benefits in exchange for keeping wages lower than they might otherwise have been because, at the time, accounting rules allowed companies to ignore the eventual costs of meeting retirement obligations.

But accounting is not reality, and companies that let accounting numbers govern how they see the world will inevitably make big mistakes.

A second problem with EPS is that it places a woefully inadequate charge on investing capital. It effectively ignores the cost of equity. A mature, surplus generating company like the 1980s GM that does this will invest its cash in ill-advised and ultimately value-destroying investments while keeping its EPS on the rise. Let's count the ways: Saturn; investments in robots that can't be made to work; global expansion and the acquisition of luxury badges.

Spend, spend, spend is the mantra of the EPS-addled manager. And so they did, and now, it's time to pay the piper.

Will GM be able to repeat history and emerge from the ashes? It's not likely. Rather than a passionately interested and committed investor like DuPont, we have the Feds in charge. Will they put in place the incentives of the owner and not the bureaucrat? This is the government, right? And will they find the equivalent of George S. Patton to pound through the cultural thicket and entangling contracts and legacy issues and union commitments and restore economic logic and value? I fear not.

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Bennett Stewart is founding partner of Stern Stewart & Co. and CEO of EVA Dimensions. He is the author of The Quest for Value, which is regarded as the definitive guide to the EVA ("economic value added") financial management and incentive compensation framework now employed at over 350 companies worldwide.

Making Money in Chaotic Times

The economy will always have its ups and downs. That's why our company has two playbooks: one for running the company in an up period and another in a down period. If we enter a down period, we immediately switch to the down period playbook with its set of well-defined behaviors. Is this a good idea? And can a company still make money during bad times?

To answer your question, I decided to turn to Philip Kotler, the well-known marketing guru at the Kellogg School of Management, Northwestern University. Phillip has just recently published a book with John Caslione called Chaotics: The Business of Managing and Marketing in the Age of Turbulence. Here's his advice:

PK: Having two playbooks, one for good times and one for bad times, is a good start but far from sufficient. For example, at the start of a downturn, companies tend to cut their hiring, advertising, and new product development. But to do this mechanically without addressing the causes of the downturn, the actions of their competitors, and the perceived length and depth of the crisis doesn't make sense. I am against robot responses.

A company can make money in bad times. Some companies will be favored because they are known to offer good value for a low price, such as Wal-Mart and McDonald's. Their sales will increase and although their profits might be lower than in good times, they will do fairly well.

Other companies have a number of options:

    * Lower your prices to create a better ratio of value to price. You can lower your list prices or initiate more sale promotions (discounts, two for the price of one, etc.)
    * Introduce a lower-cost version of your offering where you have removed some features or benefits. It will probably cannibalize your higher priced offer, but it is better to cannibalize yourself than to have competitors do this to you.
    * Add some additional benefits to your standard offer. Offer free shipment, extend your guarantee, or create a more generous return policy. In the latter case, Hyundai recently offered to take back a purchased car if the buyer loses his or her job. GM and Ford have offered to make the laid-off car-buyer's payments for them.

In taking any of these steps, make sure that your company doesn't dent the favorable aspects that have drawn customers to prefer and respect it. For example, a company that is admired for its level of service should never cut its service quality and risk losing this point of differentiation and preference. The key is to understand your customers' new problems and to consider how you can help them solve or resolve these problems. You have to coach your customer about possible solutions.

These are some ways to respond to the current downturn. But what about anticipating the next one? Every company is vulnerable not only to an economic downturn but to other disruptions that may come from technological change or from new global competitors. So the question becomes: how can companies do a better job of anticipating disruption? Companies generally do a poor job of monitoring the environment for clues to these threats. They lack an early warning system that might pick up weak signals of change. An early warning system would greatly reduce the level of surprise and chaos felt by a company that was too naïve.

The company then has to go further and imagine additional possibilities even before there is a sign that they might be taking place. For example, General Motors might ask: "What if China finds a way to make a battery that can hold a charge for 200 miles instead of the 90 miles that we are hoping to get out of our new battery?" A company must imagine new surprises.

Business is now exposed to continuous turbulence, not occasional turbulence. We aren't going back to normal times. The "new normality" is one of turbulence coming from two big forces, namely technological advances and globalization. All this spells higher risk and vulnerability.

There is a little rainbow in all of this. Change presents opportunity as well as vulnerability. The companies that succeed are those who look more at the opportunity side than the vulnerability side. If your company is having trouble, so are your competitors. If you are better funded, you can initiate lower prices or better benefits that they can't match. You can end up buying some of your competitors or putting them out of business.

Your customers, suppliers, and distributors are all suffering. Think about how to help them. Think about developing a new business model, a new product or service, a lower cost distribution channel, a lower cost supply chain. Rather than just relying on a rulebook, be more robust, resilient, and responsive to changing conditions

Why This Is the Right Time to Go Green

The green movement may be at risk of slowing down, especially within the business community. Many business people hold on to an outdated view of green: the misconception that environmental practices always cost a lot of money. So logically, in this economy they're asking, "Is this really the time for green? Can we really afford it now?"

At same time, most of the global discussion about getting the economy on track focuses on the macro picture — large stimulus packages at the national and industry level. But how can the economy as a whole get on its feet if individual companies don't as well?

I believe that these two questions — can we still go green and how do we revive the economy — are heavily intertwined. In this time of austerity, sustainability is perhaps even more relevant and will provide a path out of this mess. One of the core pillars of going green is doing more with less — saving physical and financial resources. So while the instinct may be to pull back from green initiatives in hard times, that would be shortsighted and a huge mistake.

Not only should companies not put their green efforts on hold, they should accelerate them in targeted ways to save money quickly and prepare for the future. Those who navigate these tricky waters the best will emerge from the downturn in better shape than their competitors.

The reality is that most of the forces driving companies to go green have not gone away — in fact, many of these factors have increased despite, or even because of, the economic situation. Environmental crises such as climate change and water shortages continue to evolve. Megaforces such as technology-driven transparency and the long-term mismatch between supply and demand of oil and most critical resources (billions of new consumers and not a lot more stuff in the ground) continue to advance.

Closer to home, key stakeholders still demand more of companies than ever, especially corporate customers greening their supply chains (they want to save money right now, and it's pretty easy to demand that your suppliers reduce waste, energy use, and cost). Even your employees, both of whom are under extreme financial pressure, still want a measure of environmental performance and social responsibility in the companies they work for and buy from. In fact, employees may want more green programs as they look for meaning (beyond money) in tough times.

Luckily for business, the solutions to both economic and environmental problems overlap heavily. The same strategies and tactics that address long-term environmental challenges will help you survive today's economic conditions.

Getting lean, particularly on energy and resources, will save money and reduce carbon impacts (as well as making you more competitive when energy prices inevitably rise again). Thinking through your value chain and getting creative about how you can help your customers manage their environmental impacts and lower their costs will help you grab market share in tough times. And it will likely do much more to address environmental challenges than focusing only on your own environmental impacts. Getting your people engaged around a dual mission — save the company money and preserve our collective bounty and assets — will help boost morale in tough times and keep your company going strong.

In many ways, the economic and environmental challenges are the same. We overleveraged financial resources and overextended ourselves. Isn't that exactly what we're doing with natural resources? Isn't now the right time to cut back where it makes sense, but also to innovate and grow in better, smarter ways?

Your company's, and our economy's, recovery may depend on how we all handle these multiple challenges at once. We can't afford to tackle them one at a time.

Regulating CEO Pay Is Not the Answer

We're at a crossroads for CEO pay - and by extension for corporations and competition in general.

The conventional wisdom says executive pay played a substantial, perhaps dominant, role in the financial crisis and recession by encouraging excessive risk-taking. As a result, there's huge public support right now for the idea that the basic executive pay model should be changed that it should be rethought, reformed, legislated, and regulated. This is a natural reaction to unprecedented events. And the Obama administration is about to present its own philosophy on CEO pay in the form of compensation rules for twice-bailed-out companies.

But legislating and regulating executive compensation has the capacity to do real damage. Our research has shown that the traditional executive pay model using cash and stock incentives continues to work for the vast majority of companies. It motivates leaders to steer their companies toward high performance. Luck plays a part in whether or not the companies actually get there, but the pay-for-performance model certainly sets companies up to succeed. Our research shows that in general, high-performing companies' CEOs get paid a lot, and low-performing companies' CEOs get paid much, much less.

Furthermore, CEO pay is already self-correcting. Boards have heard the outcry from shareholders, activists, the media, and the public. All across corporate America, the compensation committee debates of the past few weeks have been notably different from previous years'. To borrow President Obama's language, the board members "get it." We survey directors annually and have found they have become far more conservative in making their CEO pay decisions.

An important factor prompting this change in board behavior has been the freezing up of the CEO labor market. This year, CEOs don't have as many employment alternatives as they used to. In past years, the intense competition for good CEOs helped boost executives' pay packages. In fact, a poor understanding of the executive labor market underpins much of the conventional wisdom about CEO pay. Many assume that some chief executives must browbeat their weak-willed boards into giving them lucrative deals--even in bad years. But in the vast majority of cases, that's simply not so. Boards do "buckle," in a sense, but only to the realities of the labor market. Big-company directors are convinced that the right CEO can add billions of dollars' worth of value for shareholders, and in most years, the right CEO is a scarce commodity.

CEO pay will self-correct in another sense too: Profits and stock prices are likely going to increase more modestly in the coming months and years, and that slower rate of growth will affect chief executives' realizable pay--the true value they earn in incentive and equity pay.

So I would suggest not a wholesale rethinking of the traditional executive-pay model but a more measured approach that specifically counters the role that pay may have played in causing excessive risk taking. As many have argued, perhaps it was the failure of the financial firms' risk models to identify the true downside risks that led to this crisis.

While this moment in history presents challenges for corporations, it also presents an opportunity for boards to get rid of executive pay components that irritate shareholders and employees. And that is what we recommend. Directors now have more clout to stand up to CEOs and refuse things like lucrative severance packages in case of takeovers, and they have eliminated some prerequisites. CEOs often don't realize how big an impact some of these perks can have on people's attitudes. We recommend protecting core incentives and minimizing the irritants, with an eye on balancing the risk components in the pay program with the pay-for-performance components.

But our recommendations are always framed in practical, economic, rather than moral, terms. Outraged employees and investors are bad for the CEO and bad for the company. For example, if employees are annoyed at their leader, productivity and thus profitability might slip. What matters to me isn't whether there's a moral crisis in executive compensation but whether companies can stay competitive and balance pay for performance with the right risk profile.

How the Recession Is Changing Talent Management

By now we've all heard the phrase that a recession is too precious to waste.

Recessions are times when we make changes in the way we do things — consciously or not. Although it would be smart to do it consciously, probably some of the most significant changes have just, well, happened.

The shift underway today, embedded in companies' responses to this recession, will have major unintended consequences for the relationship between organizations and the individuals who perform work (I hesitate to even use the word "employees"). As msnbc reported recently, there's been a "furlough frenzy" in corporate America lately.

We're on a slippery slope.

Recent history illustrates how significant shifts in the nature of the relationship between organizations and workers have resulted from practices put in place during a recession. For example, it was during the recession of 1981 that the idea of a "layoff," meaning a permanent separation with no prospects for recall, came into widespread use. Prior to that recession, the idea that an employer would dismiss workers permanently was so rare that the Bureau of Labor Statistics did not even keep track of such cuts! Furloughs, with the clear commitment of a return when business picked up, were used instead. The reality that jobs were no longer "for life" sunk in.

The recession of 1991 saw another substantial change: many individuals became contractors out of necessity — and a significant proportion chose to continue to work as contractors even after "permanent" jobs became available. We accepted the idea that some people may never be full-time employees again and began our evolution to a "free agent nation."

This recession is ushering in a return to furloughs. Hewitt Associates recently surveyed 518 U.S. firms and found that 70 percent had implemented or were considering implementing furloughs. Major companies such as Dell, American Airlines, and DuPont already have announced plans to send workers home for a few days or a few weeks without pay as a way to cut costs.

Much of the attention paid to this trend has focused on the cost-savings opportunities for employers and worried about the economic hardships and potential rights violations to employees. Employers who use temporary hiatuses rather than layoffs save on severance costs, as well as future rehiring and retraining expenses when an economic turnaround eventually comes. Employees, in theory, suffer through some hardship, but not as much as would have occurred with a layoff. Yes, but . . .

This practice is further changing — in irrevocable ways — the relationship between employers and employees. This practice is reframing, perhaps even severing, the idea of "full-time" as many of us have understood it for years.

When I took my first job out of graduate school, my employer had me sign an agreement that whatever I did — whatever I created, invented, wrote — whether or not it occurred during some official forty hour period, was the property of the company. Since then, I and most of us in professional or managerial roles have viewed the work we do as only loosely related to any particular hours. We work nights and weekends. We grumble about work-life balance. We accept that the deal we have had with our employers was all encompassing.

But the idea of furloughs, particularly for managers and professionals, is planting the seed of a new way of looking at work in our minds. Suddenly companies have asked us to work, say, 32 hours a week rather than 40. Hmmm. What does that really mean? Most of us were never working 40 hours — we might have been working 50 or maybe even 60. We were answering emails at odd hours, writing in the early hours, calling Singapore at night. Does this mean that we should now work 20% less than we were before . . . or does it mean we should work literally 32 hours?

For many, I believe the conclusion will be that we should work the hours specified by the company and perhaps do other things — start new businesses on the side perhaps, sell stuff on eBay, take another job, go back to school, whatever — with the other time.

In this shift, companies will lose far more than the number of hours they think they've cut back. Companies will lose that sense of total dedication — the sense that what I produce on my own time is theirs, that I have a responsibility to answer emails whenever they arrive or participate in odd-hour phone calls.

This shift sits well with many in Gen X who have already tended to bind their involvement more carefully than have the all-out Boomers. But for both generations, it will be a new way to look at work — another step on the slippery slope of recessionary lessons moving us from (1) you don't have a job for life, to (2) you may never find full-time work with one employer, to now (3) even a full-time job is really only a contractor job in disguise.

From a talent management perspective, it's essential to recognize that decisions you're making this year are likely to set the tone for the relationship with employers for decades to come.

I hope you'll share your thoughts and experiences.