Even CEOs Are Joining the Great Resignation
It’s not just employees who have been exhausted by the past few years.
Good morning!
Please note, 21 Hats will be quiet next week. The next 21 Hats Morning Report will be published on Monday, November 29. The next 21 Hats Podcast will be published on Tuesday November 30. Have a wonderful Thanksgiving, everyone!
Here are today’s highlights:
Shopify plans to help businesses target customers.
Instagram and TikTok are flooded with business coaches.
Gene Marks says CRM systems are taking the place of sales people.
Carey Smith, whose company invests in entrepreneurs, makes the case for bootstrapping.
MANAGEMENT
Even CEOs are joining the Great Resignation: “CEO turnover spiked in the first half of 2021, as companies tapped new talent to navigate the aftermath of the COVID-19 pandemic and stressed-out chief executives sought a career change, a study from recruiting firm Heidrick & Struggles found. The findings illustrate how CEOs are not immune to the exhaustion that has swept hundreds of millions of workers worldwide since the onset of the pandemic and has pushed many to consider a new job or lifestyle in a wave dubbed the Great Resignation."
“‘Our belief is that it will only accelerate going into next year as people have delayed their retirements,’ said Jeff Sanders, co-managing partner of Heidrick's global CEO and board practice.”
"’Many CEOs didn't have to travel as much,’ which helped them preserve their energy, Sanders said. But communicating ‘virtually’ in a new medium was ‘exhausting,’ he said.” READ MORE
MARKETING
Shopify is expected to launch an advertising platform that will help businesses target customers: “Some retail experts predict that Apple and Google's moves to impose restrictions that block third-party tracking for advertising can benefit Shopify. Shopify sells software that brands use to set up and build their own e-commerce websites and has hinted that it wants to dip its toe into advertising with a tool called Shopify Audiences, which will allow advertisers to use shopping data to find audiences of people interested in their products by advertising on Google and Facebook. Shopify is already an e-commerce giant, and experts are speculating that the company could become a significant player in digital advertising to diversify its revenue away from its core retail and software business.”
“‘Given the amount of data Shopify has internally and the pullback of the attribution coming from social platforms, it makes perfect sense for Shopify to launch their own ad platform,’ said Troy Osinoff, cofounder of the agency Juice ...”
“Nick Shackelford, CEO and managing partner of Structured Agency, an agency that works with brands that sell on Shopify, said that Shopify reached out in October to some of the merchants he's represented to give them early access to Shopify Audiences.”
“Merchants are losing access to data across Facebook and Google and getting access to more audiences through Shopify could help advertisers, he said. ‘They're realizing that we're desperate,’ he said.” READ MORE
Instagram and TikTok are flooded with business coaches promising seven-figure incomes: “These business coaches, who are particularly popular on Instagram and TikTok, advertise that they make six and seven figures and can help others achieve the same success. But the field is unregulated, which leaves the vetting in the hands of the consumer. Their posts are equal parts revenue-generating marketing strategies and self-love affirmations. On any given feed, you often see Louboutin heels, Chanel bags, and perfectly manicured nails alongside inspirational quotes.”
“‘It's vital for you to get rich,’ one says among photos of her with her dream car: a Mercedes-Benz 550 SUV. Another advertises her ‘Summit of Slay’ conference between a video of her getting facial fillers and a quote saying, ‘You are destined for greatness.’”
“And another's post says ‘you are in alignment’ alongside photos of her with a private jet. They promise if you attend their conferences, sign up for their online mastermind courses, and join their Facebook groups, you, too, can quit your corporate job and monetize your passion.”
“In 2019, business coaching was a $15 billion industry, according to the International Coaching Federation. While the market shrunk last year during pandemic-induced closures, it's expected to grow 5.8 percent in 2021, an IBISWorld report found.”
“The business-coaching world often paints entrepreneurship as a lifestyle full of glamour: If you just replicate the successes of others — build a newsletter, start a podcast, launch an online course, and write a book — you'll become rich and achieve the life of your dreams.” READ MORE
HUMAN RESOURCES
Gene Marks says businesses are replacing salespeople with CRM software: “Top CRM providers like Salesforce, Zoho and Microsoft are helping to reduce the number of salespeople at their customers by generating automatic quotes, sending out automated follow-ups and alerting lower-skilled order entry staff when orders are falling behind prior activity. These platforms leverage AI to mechanize sales routines, chain together rules and analyze salesperson performance based on quotas and goals. These systems are sending alerts and reminders — without a human involved — that prompts customers to buy.”
“CRM systems that focus on customer service such as ServiceNow, Zendesk and Freshworks are also helping to eliminate service staff. Their software bots are responding to customer requests where once a human was needed to be involved.”
“Their analytics are looking behind the scenes at potential problems, issues and complaints — a task once done by lower level personnel — and escalating these concerns to more skilled customer service agents for follow-up.”
“Their machine-learned robots are chatting, texting and emailing customers without those customers knowing (or caring) that they’re corresponding with a machine-learned robot because their questions are getting answered quicker and with more intelligence than a human.’ READ MORE
In Finland, new legislation would allow employees to find out what colleagues make if they suspect discrimination: “Research shows that workplaces that are more transparent about employees’ pay have narrower pay gaps. Without pay transparency, employees often don’t realize that discrimination occurs in their workplace. Once someone becomes aware that they’re making less than their counterparts, they’re likely to become motivated to fight for fairness. Also, when employees can become aware of coworkers’ salaries, organizations must be able to justify each employee’s salary—thus reducing or eliminating bias. Organizations can no longer pay more to certain employees because they negotiated better or became friends with the boss.”
“One reason women fall behind men on the pay scale is related to salary negotiation. There’s evidence that women are less likely than men to negotiate salary and often face backlash when they do negotiate.”
“Women can also be haunted by their salary history. If your salary history is used to determine your current salary, then gender discrimination can follow you from job to job. (Currently, 29 states in the U.S. still allow employers to ask prospective workers about their salary history.)”
“While most large U.S. organizations are still secret about pay, supermarket chain Whole Foods has had success in implementing pay transparency since 1986.” READ MORE
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TRENDS
It turns out there was no Great Migration during Covid: “The U.S. Census Bureau this week released data showing that migration activity has fallen to its lowest rate in more than 70 years. The findings toss some cold water on anecdotes that Americans were relocating more than ever during the pandemic. From 2020 to 2021, nearly 27.1 million Americans, or 8.4 percent, reported living in a different residence than the year prior, according to the latest geographic mobility data from the Census Bureau. The migration rate, which has steadily declined since 2014-2015, is the lowest in more than 70 years, according to Census estimates of Consumer Population Survey data that go back to 1948.”
“While there might not have been a massive overall trend of people moving across the country, net migration out of urban neighborhoods did increase during the early stages of the pandemic, said Stephan D. Whitaker, a policy economist with the Federal Reserve Bank of Cleveland ...” READ MORE
POLICY
Dozens of medical groups are urging businesses to adopt the Biden administration’s vax-and-test mandate voluntarily: “The American Medical Association and more than 60 other health care associations on Thursday called on employers to voluntarily implement President Biden’s contested vaccine-or-testing mandate, saying businesses had no time to waste ahead of the busy holiday season. ‘We — physicians, nurses and advanced practice clinicians, health experts, and health care professional societies — fully support the requirement that workers at companies with over 100 workers be vaccinated or tested,’ the organizations wrote in a joint statement. ‘From the first day of this pandemic, businesses have wanted to vanquish this virus. Now is their chance to step up and show they are serious.’”
“The Occupational Safety and Health Administration issued the rule on Nov. 4 ... But Republican-aligned states, businesses and legal groups immediately sued to block it, arguing that it was government overreach, and a federal appeals court last week upheld a stay.”
“OSHA has suspended enforcement of the rule, which was set to take partial effect on Dec. 5, pending further legal developments.” READ MORE
FINANCE
Carey Smith, who bootstrapped Big Ass Fans and sold it for $500 million, makes the case for bootstrapping: “Bootstrapping isn’t easy, but it can make a lot of sense for anyone who is disciplined and whose main goal is to grow a strong, long-lasting business. First, if you’re like me, the desire to be your own boss was what led you to go into business. Bootstrapping means you don’t have to deal with some outsider telling you what he or she thinks is good for your company. Remember, investment firms are looking after their own interests first. They’ve been entrusted with the savings of people who are only interested in getting good returns, so that’s their overriding concern—not the well-being of your little startup.”
“As a bootstrapper, you won’t have to be constantly planning your next round of fundraising. This frees up an enormous amount of time to focus on fine-tuning an actual business model.”
“The biggest disadvantage to bootstrapping is also one of its advantages: It takes longer. If you’re in a field where there’s a lot of competition, that can present real problems.”
“But even when you don’t have competitors, limited reserves can affect your ability to scale. I sometimes wonder whether it had that effect on Big Ass Fans.” READ MORE
THE 21 HATS PODCAST
It’s Bonus Season. Are You Feeling Generous? This week, Paul Downs, Jay Goltz, and Laura Zander talk about the bonuses they plan to pay this year—and how their bonus plans and philosophies have evolved over time: Are the payments a reward for company performance? Are they a reward for personal performance? Are they supposed to motivate? Or are they just a thank you? Then the owners talk management, a discussion inspired by last week’s episode with Dana White about navigating the space between being a pushover and being a jerk. Plus: Are 360 reviews good management or are they kind of creepy?
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