Hello dear readers!

Glad to have you back! I’ve got a lot of great stuff for you as always, including some news on the future of the economy, as well as some updates on legislation that could make pay transparency a reality in many workplaces. I’m also thrilled to share a guest section from Jeff Gothelf, an author and leadership coach who does some admirable work. And, as always, I’ll share with you what I’m reading, watching, listening to, and thinking about.

On with the show!

Industry Highlights: SPLIT DECISION

Where is the economy headed?

It’s a great question that even the best and brightest are currently grappling with. Some say it’s great, while others think it’s just window dressing.

Over at The New York Times, columnists David Brooks and Paul Krugman have been trading punches about what’s really going on with the US economy. Their debate was initiated by a comprehensive story in The Economist, which paints a rosy picture of what is to come.

The gist of the piece is that despite a very negative outlook—80% of American adults think their children will be worse off than they are—the US economy is stable and even thriving in some areas. It points out that the US accounts for a quarter of the world’s GDP—a stat that hasn’t changed in 30 years, despite the fact that China has significantly increased its output. Average incomes have also grown faster than in western Europe and Japan.

In his recent column, Brooks supported the Economist’s optimistic viewpoint.

Krugman, on the other hand, says that the positive outlook is the result of cherry picking data. Yes, the US’s GDP per capita is significantly outpacing other developed nations, but is that an accurate measure of health and happiness?

Krugman would argue no.

To support his stance, Krugman points out that while per-capita GDP has jumped 27 percent since 2000, median household income has only grown seven. By contrast, the World Inequality Database reports that the top 0.1 percent of earners’ income has grown 41 percent.

Clearly there’s a difference of opinion here that’s (un)shockingly split by party lines. But what about all of that recession talk we heard about at the beginning of the year? Is it coming? If so, when exactly?

Well, that’s up for debate as well. Recent data would suggest that everything is looking peachy. We’ve not only regained all 22 million jobs lost during the pandemic, we’ve added an additional three million. Pay is up, pay inequality is down, and inflation is stagnating.

Sense a BUT… coming here?

Take, for example, the fact that small-and-mid-sized lenders are tightening their credit standards following the collapse of Silicon Valley Bank. While there’s not yet data to support any sort of fallout, history would suggest that lenders clamping down on loans is never an indicator of good things to come.

It certainly got the attention of Fed officials, who said they were worried about the economic consequences of SVB and Signature Bank’s collapses.

Economists are split on how the Fed should proceed. Some feel they’ve hiked interest rates more than enough to combat inflation, while others believe they have to keep going until it’s clearly been beaten.

The goal is of course to strike the balance between lowering inflation and triggering a reduction in spending that would tumble us into recession. But since the economy doesn’t turn on a dime, it may be months before we discover an over-correction.

And by then, it may be too late.

The Future of Work: AM I THAT TRANSPARENT?

Six months ago, I wrote about pay transparency and how legislation in several states would require companies to post salary ranges on job listings. Many of those bills are now becoming a reality, and companies are scrambling to comply.

One dicey issue is that different states have different transparency regulations, and companies who attract out-of-state candidates must ensure their salary ranges meet the various guidelines. Companies based in metro areas like DC and New York frequently attract out-of-state commuters, and with all-virtual companies on the rise, it’s possible for a single company to navigate dozens of different—sometimes conflicting—rules.

Another issue these regulations have surfaced is the fact that companies haven’t always applied consistent geographic-based pay adjustments for relocating workers. The US Postal Service reported that the pandemic triggered more than 31 million moves, but many companies did not adjust accordingly. This resulted in a significant pay distortion, especially in rural areas.

There’s no doubt that pay transparency will reduce inequities with regard to gender, ethnicity, age, etc. A recent study from Nature Human Behavior shows pay transparency has reduced pay gaps across the board—even eliminating them in some cases.

While transparency does engender trust and ensures equity—both positives—the question still remains if it’s going to be ultimately good for all.

A Natural Bureau of Economic Research report suggests that even though pay transparency equalizes wage gaps, it actually lowers overall pay. The reason for this is that it lowers prospective employees’ bargaining power when negotiating their salaries. It’s like buying a car from a no-haggle dealership—just because you lose the uncomfortable conversations doesn’t mean you’re getting a deal.

Transparent pay could also affect productivity. The same NHB study found that transparent wages resulted in flatter pay, which means it is less tied to performance. With no incentive to go the extra mile, some employees are not producing as much. This is especially concerning, considering that BLS data suggests worker productivity is already on the decline.

What does this mean? While pay will most certainly play a more prominent role in job listings in the future, it will take time for companies to sort out exactly how to navigate the new regulations in a way that’s mutually beneficial. In the meantime, we’ll continue to see companies that have to post salaries play the game of having unusually wide ranges. They circumvent having to provide specifics by citing factors like experience, location and variable compensation. Opaque, much?

An HBR analysis agreed.

Guest Post: Jeff Gothelf

Naseem’s note: Last issue, I highlighted Jeff Gothelf’s book, Forever Employable, and how useful it can be for building your own personal brand. This week, I’m fortunate to have Jeff discuss how he sees Objectives and Key Results (OKRs) being utilized to keep companies flexible and resilient in the face of uncertain economic times.

Want to read more about OKRs and staying agile? Check out Jeff’s newsletter, Continuous Learning, and follow him on LinkedIn.

I’ve spent a long time in the product management and startup worlds, and I can say with certainty that success for organizations—now and in the future, whether startups or not—depends on how your customers respond to what you produce.

But customers don’t respond the same way forever. Our world changes fast, and customers’ needs change right along with it. As their needs change, so do their behaviors. That creates an inevitable and inescapable uncertainty for which every single organization has to account.

How can you reasonably navigate uncertainty and de-risk every product and initiative you create?

Adapt with your customers’ needs.

To do that requires operating with systems and frameworks that facilitate adaptability too. OKRs provide that framework.

As the name suggests, Objectives and Key Results focuses organizations not on the things you’re making, but on the results you want to achieve—which happen by being able to produce customer behaviors that align with the business’s strategic goals.

Working this way requires organizations to prioritize learning about customers’ experiences. It requires testing smaller, less risky initiatives, and gathering feedback and data from customers’ interactions with them, before investing in an idea further. It requires you to plan for the unplanned—to build in the ability to course-correct when the data proves your idea wrong.

OKRs set you up with a sense-and-respond approach, allowing for great agility, despite—or even in celebration of—uncertainty.

If you can embrace this attitude in your planning, your work becomes exponentially more realistic, you reduce the risk of committing to ideas that don’t work, and you ensure the organization increasingly deploys its people and resources in the directions that are most likely to succeed—for now, for next quarter, and for the uncertain future ahead.

The Supply Aside: What I’m Reading, Watching, Listening to, and Thinking About Re: Supply Chain, Work, and Beyond

📕 Read - GOOD POWER by GINNY ROMETTY

This is another good one from an accomplished leader at blue-chip company. In Good Power: Leading Positive Change in Our Lives, Work and World, ex-IBM CEO Ginny Rometty outlines important leadership lessons and big ideas on how to drive meaningful changes. In a recent book interview with Michael Smerconish on Sirius XM, she gave a poignant example of how she overcame some of her imposter syndrome. She mentioned how at one point in her career as she was mulling a huge promotion, she was wary of accepting it as she felt perhaps she wasn't quite ready. Her husband asked her what a male colleague would do in her place and she said he would take the job without any hesitation. That was her lightbulb moment and she never looked back as she rose to the pinnacle as CEO.

I love that she combines both tactical takeaways and anecdotes about her life and time at IBM. It’s a how-to guide that reads like a memoir, which is an effective way to package such incredible takeaways.

📺 Watch - AMERICAN MANHUNT

This new Netflix miniseries, American Manhunt: The Boston Marathon Bombing, does an incredible job of documenting the insane events that unfolded in the 100 hours following the Boston Marathon tragedy. I remember it vividly, but reliving it through the eyes of people who were actually there gives me a whole new perspective on how horrifying it truly was. The Netflix doc team also does a great job of addressing the issue of Islamophobia and the challenges faced by Muslims living in post-9/11 America.

👂 Listen - WORKING IT

In the wake of bank collapses and folding businesses, how can we make sure that we’re prepared for the worst? That’s the topic of this Financial Times podcast, which delves into the SVB meltdown and how we can prevent future catastrophes. Host Isabel Berwick discusses the flawed judgment involved, as well as how tribalism often gets in the way of risk assessment. A great listen for those worried that SVB may somehow just be the first domino to fall.

💡 Think - ISM ANNUAL CONFERENCE

Spring is in the air down here in Dallas, and I’m excited to be welcoming lots of supply management experts from around the world to the upcoming ISM 2023 Annual Conference.

As someone who frequently supports and attends this annual conference, I’m especially looking forward to this year. And not just because—as usual—there are great keynotes and overall presentations in store, but also for a special session on May 8th called Revitalize Your Procurement Career. And yes, yours truly is co-presenting this with Bill Dorn from Corcentric. It’s been a few years since I’ve actually spoken at the conference, and I couldn’t have asked for a better topic.

We’ll be talking about how to leverage AI, tools, information and people when it comes to the Future of Work. You’ll learn more about how digital transformation and automation have changed the landscape for our function and how you can leverage this to promote your personal brand and advance your career. We will even touch upon the much-ballyhooed ChatGpt. Yes, I really did use that word. So look us up and join the session. You won't be disappointed but if you are, we’ll blame Bill. See you in Dallas next month.

See the ISM site HERE for more details on my session and the conference!

Charts of the Week

Quotes of the Week

Tweet of the Week

Finally...

Thanks so much for reading. I’d love to know what you think about this issue and how I can make it more useful to you.

If you have suggestions or topics you’re interested in seeing me address, shoot me an email at [email protected]!

Want more?

If you’d like to read more of my writing on the supply chain, entrepreneurship, or the future of work, check out my website.

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Happy reading this weekend!

-- Naseem