strategic consultant to:  

“If A equals success, then the formula is: A=X+Y+Z. X is work. Y is play. Z is keep your mouth shut.”
Albert Einstein

I love this quote. It doesn’t, of course, offer any mathematical values to X or Y or Z, but it could imply that they come in equal measures.

The balance of work and play is essential to success. And the virtue of Z, keeping your mouth shut, is incalculable.

We learn different lessons at different times in our lives. I learned to balance work and play rather early in my career. I look like a Type A but I am good at being a Type D as well, especially when living on the sailboat, or summering in Maine while working. Both conditions slow me down, and in fact can make me more effective.

Now, Z took me longer to learn. Perhaps more than 20 years. I had experienced my 15 minutes of small fame, and settled into a deeper experience of consulting, with more wisdom and less noise. I had seen a lot and learned more each year as I progressed. Every year I would review my calendar (the big paper A4 Architects Diary I use to track my life – never mind the electronic version) and notice what I had learned that was new, and what I had learned yet again.

But then I learned Z: keeping my mouth shut. I found I didn’t have to jump in with an answer. I could wait to see what the CEO or the team thought first. Someone else might come up with it, or with something adjacent, that was perhaps more interesting, or more suited to the team or the market.

And part of Z is this, too: you don’t have to raise your hand. You can watch and wait. Just because you know how to do something doesn’t mean you are the one who should do it. It may be better to let someone else do it. And it may not be part of your role, so it may even be inappropriate for you to do it. If you are the CEO, or the consultant to the CEO, it may be better that the team learn and do this task. After all, as CEO, you can’t do all the operations (you have other tasks only you can do), and as the consultant, you shouldn’t be usurping the team’s responsibilities.

And, when you consider X and Y, if you keep raising your hand for the stuff others should be doing, there will be only X and no Y.

I was working with one of my favorite clients the other day, when I heard myself tell him, “Absolutely – your must be trustworthy, your must offer full disclosure, and never let anyone darken your reputation – you know, loyal, helpful, kind – all that.”

I realized this list was from some childhood mantra taught in America, so deep in our culture that I could recite half the list and not know where it came from. So I looked it up. It was the Boy Scout Law (I admit I didn’t think to look up the Brownies or the Girl Scouts).

Now, I am not politically correct enough to know if the Boy Scouts of America is a respected group these days, or a para-military organization. And I don’t care. In these days of bad behavior and rampant corruption (or the same level of corruption and rampant press coverage), it is good to remember the lessons of our most traditional and old-fashioned cultural upbringing, and not shy away from repeating them for fear of seeming un-cool.

So, here goes: Scout Law (British version)

• A Scout is trustworthy, loyal, helpful, friendly, courteous, kind, obedient, cheerful, thrifty, and brave.

This original version by Lord Baden-Powell had these 10 points to the Scout Law. Two more, “clean and reverent” were added by the Americans, which I don’t find useful enough to include. (Thanks, Wikipedia http://bit.ly/cxbMmw )

I especially like “cheerful.”  I also like the Scout Motto and Slogan – especially for business folks in a challenging economy, when opportunity is more and more based on the strength of trusted relationships:

• Be Prepared and Do a good turn daily.

I was thinking about money and freedom when I heard an NPR interview with Merle Haggard, the country music legend, now 72, talking to NPR’s Steve Inskeep about hopping freight trains in his youth. http://n.pr/aedMlf

“I rode a freight from Oregon back to Bakersfield — that’s over a bunch of mountains,” Haggard says. “It was wintertime — there was snow and there was ice and two others hobos and me crammed down into an ice compartment of an old refrigerator car, looking at each other with nothing to say.”

Inskeep asks, “What did you learn from that?”

“Take enough money to ride a bus,” Haggard says, laughing.

I laughed out loud too. When I was 16, I headed out of the house one day to run an errand on my motorcycle. My father looked up and asked, “Do you have money?”

“Sure,” I said, “what do you mean?”

“Always carry at least $100 in cash in your pocket.” Back then that was a lot of cash.

“O.k.” I said. “But why?”

“You can’t bribe a policeman with a credit card,” he winked.

I have never left my house without at least $100 in cash since that day.

This got me thinking about the freedom a little cash can bring. My Daddy wanted me to be able to get out of trouble on my own. And I applied this going forward into my business. One of the ways to survive economic upheavals we cannot predict or control, is to have enough money for the bus. Merle Haggard would have been warmer, even if he had lost that story. My flexibility to choose my clients (and work only with the most promising entrepreneurs) would be restricted if I didn’t have savings to smooth the regular tech downturns and general recessions.

Since my Daddy taught me this lesson, I have always maintained a cash buffer against trouble. Of course, the only way to build a cash buffer is to build it – to begin the discipline of putting some cash out of your own hands where it can work for you, whether you are young and not thinking about such things, or rebuilding your retirement account or business that just got eaten by the current economic crash. Certain savings (retirement, profit sharing, educational savings) give you significant tax breaks.

So here are some resources about savings, cost of debt, and compounding interest that might get you on your way. http://bit.ly/brCAqN

Put an initial $100 into a savings account that compounds monthly at only 3.5% (a rate that will go up in time, again), add $100 each month for 10 years, and you will create more than $14,000 in savings in 10 years. In 20 years, that ongoing deposit will create nearly $35,000.  As interest rates rise again, so will these savings.

Use this calculator for understanding interest on simple savings, and other parts of this site for learning about mortgage interest, home equity, refinance, and auto loans. http://bit.ly/9l6oin

Of course, there are more sophisticated methods for growing your buffer money, using advisors and money managers and brokers, but that is a long discussion for another time.

Finally, call your business accountant for a meeting to review all the ways you can save on taxes while creating a cash buffer. If your accountant is simply a tax preparer or bookkeeper, find a CPA who is specializes in small business planning as well as taxes.

The time to start is now.

Employees and consultants face the tough decision of continuing to work with a company that is struggling or failing, or returning to a highly troubled job market in this jobless so-called recovery.

Employees face reduced pay and increased work load. One V.P. of Marketing I know lost his staff of four more than a year ago, and has continued on doing the entire team’s work.

At another company, the team worked six months last year with no salary or consulting fees, then was restored to full salary but because they were “off-payroll” they had to pay their Cobra and other benefits out of pocket.

Consultants in such a situation can fare less well. When payroll is restored for employees, consultants are often paid much less than their previous retainer, even when functioning as a full team member and carrying the earlier responsibilities (or more). Employees have certain State and Federal legal protections which employers do not want to strain.

Consultants have only the protection of their contracts. In a failing company, a consultant’s options are often limited to stopping work once the pay stops. (Can you rub the fingers of one hand together and repeat “no tickee/no washee”? This may be more difficult than you think.) Or they can continue working with little or no pay to see if the company will survive and restore the full consulting contract. Consultants can track their arrears, but a failing company is not likely to pay them, regardless of the contractual language. Consultants do not have preferred standing in the debt hierarchy and lawsuits are expensive (and there may no be assets to win). Consultants must view their continuing to work for no pay or reduced pay as “keeping an eye on developments” in the company.

If the company is looking for a capital infusion, the new investors rarely honor these arrears, considering this work as “sweat equity” that was contributed to keep the company alive. At best, a consultant may negotiate partial payment for these arrears, usually less than 50% of what is due. Worse still, if the investors are looking to turn the company around, consultants are usually the first to go, with no settlement at all.

The blessing for consultants, unlike employees, is that they are skilled at always looking for more work, so they can sustain their perpetual hunt for gigs while working for less than full retainer. Consultants have multiple clients, so their revenue can be sustained by some clients while others are struggling. For consultants, the decision to stop work with a non-paying client is about assuring that your paying clients are being fully satisfied, about balancing the time available for finding and closing new business, and about not exhausting yourself with the pressure of work for no pay.

Employees are more disrupted by this situation, as they are not used to continuous job-seeking, and are accustomed to having their benefits covered (consultants always pay their own benefits, and this cost is built into their business model). Also, job hunting can be considered disloyal to the employer and by the employer, despite all rational reasoning.

This is the economic reality. There is an emotional reality as well. Employees, and many retained consultants, have built a part of their identity on their work, their company, their team and their employer/client. Emotions are irrational, and in face of all obvious economic need, emotions can interfere with rational self-interest.

Difficult as it may be, we must stay calm and focused on what is sensible to do. Folks have told me, “I can’t quit now – I’m the only one who can do this part of the work, and the company can’t keep going if I’m not there.” This may or may not be true, and it sounds loyal, but a good part of it (if you look closely) is ego and fear. Each of us is replaceable. It is astounding how a company can continue as “dead man walking” without any single team member. The other members of the team fill in the gap – perhaps not well, perhaps not happily, but they do it. Would that VP of Marketing ever have believed he could do the work of his entire team before he had to? Yes, he might be doing it less well, but he has continued in this way for more than a year. So, we must each remember how dispensable we are, and turn our focus to the realities of our own survival.

One person said to me, “My boss understands my value. She will protect me.” You may believe your employer and manager will protect you, and they may want to, but you may find that they do not have the power to protect you.

And you likely do not have the whole story. What top management knows and what it tells the troops are often far apart. Most management is not “open book.” Conditions are usually far worse than you understand, and decisions often come down very quickly.

So, continue your emotional loyalty, and then protect yourself. Finding the next gig or the next job will take longer than you think. Certainly, if you can support your team, and still protect yourself, that is best. And of course it is often easier to find your next role while you have a current role.

Your judgment is in the timing of it. You must look while you work, you must balance your energy and commitment with your compensation and your cold rational assessment of the likelihood that you will ever be paid again. Then you must generate the energy, positive self-confidence and cheerfulness to go out into the market projecting your true value. This may be the most difficult part of all, after months or years of dread every day at work. But clear your mind and actively look for your next new opportunity. It won’t find you if you stay in your cave.