This video covers diversified and undiversified boss risk.
- Have you ever heard of boss risk? It's the risk to your job from your boss not liking you. Just like investing, the best thing you can do to reduce your boss risk is to diversify your boss risk. Everyone needs to think about boss risk because everyone has a boss. Even if you own your own company, you still have a boss, your clients. If they stop buying your product, guess what? They just fired you. Even if you're the CEO of a big company, and you're calling the shots on a lot of day to day things, you still have a boss, the shareholders.
If they lose confidence in your ability to deliver value to them, wham bang, you're fired. So boss risk is a real threat for everyone. When you can't change cities, industries, or even companies, your boss risk is especially high. That's because it's undiversified. You've just got one boss. A CEO has an entire board of directors who might like or dislike him or her. A small business owner has multiple customers, but if you're stuck in a single job, you've only got one boss.
If your boss doesn't like you or if your boss is a turkey, you're gonna be gone. It's a sad truth that there are lots and lots of people in management positions who have no idea how to manage people, this presents real boss risk. Having just one boss is as risky as investing all of your savings in a single stock. You need to be extra careful to anticipate if your boss, the one buffer between you and unemployment has any reason to get rid of you. I'm not suggesting putting an apple on your boss' desk every morning, but I am suggesting anticipating why your boss may fire you and hit it off early, but the only way to really diversify your boss risk is to start your own business and have many clients.
If you're committed to staying at your current company though, you can still diversify your boss risk in smaller ways. Network within the company, make friends, find allies, build relationships, and be sure to have a list of five to 10 people who you could call right now for a job. Ideally, some of those names could be people within your current company. If your company has an internal resume database, keep that resume fresh and updated. If you get transferred to a different department in your same company, that's a minimal disruption to your life and no disruption at all to your kids in school, your spouse or whatever else is tying you to your current circumstances.
It's always good to have these alternative jobs at your company lined up even if you don't intend to use them. There's a famous negotiation book by Roger Fisher and William Ury called Getting to Yes. The book puts forward a very simple, but powerful rule of negotiation. Whoever has options, has power. If you know someone else in your company would like to hire you, you'll have more leverage in your current role. If you really don't like your current situation, you can just take the other job and go work for that other boss.
The more options you have, the better off you are and the fewer unpleasant things you'll need to put up with. How does your boss risk look? Is it low because your boss likes you or perhaps because you've diversified the risk?
- Recognize examples of risks that could lead to company recessions.
- Define SWOT.
- List the three rules for the “dig in” recession-proof strategy.
- Recognize the characteristics of the “run” recession-proof strategy.
- Describe the two steps for switching your career.
- Summarize the “invest” recession-proof strategy.