Apr 26th, 2021
Alex Chausovsky is an economist, accomplished speaker, senior business advisor and Director ITR Economics. He's a highly experienced market researcher and analyst who's consulted and advised companies throughout U.S., UK, Europe, Brazil, China, featured on NPR, The BBC and the Wall Street Journal. In this episode you can learn:
- You get noticed doing the work others don’t want to
- How to use data to predict the future in unpredictable times
- Leadership data of local teams and people is so important
- You have to open yourself up to failure in order to succeed down the road
Join our Tribe at https://leadership-hacker.com
Music: " Upbeat Party " by Scott Holmes courtesy of the Free Music Archive FMA
Transcript: Thanks to Jermaine Pinto at JRP Transcribing for being our Partner. Contact Jermaine via LinkedIn or via his site JRP Transcribing Services
Find out more about Alex below:
Alex on LinkedIn: https://www.linkedin.com/in/alexchausovsky/
ITR Economics Website: https://www.itreconomics.com/alex-chausovsky
Alex on Twitter: https://twitter.com/achausovsky
Full Transcript Below
Steve Rush: Some call me Steve, dad, husband or friend. Others might call me boss, coach or mentor. Today you can call me The Leadership Hacker.
Thanks for listening in. I really appreciate it. My job as the leadership hacker is to hack into the minds, experiences, habits and learning of great leaders, C-Suite executives, authors and development experts so that I can assist you developing your understanding and awareness of leadership. I am Steve Rush and I am your host today. I am the author of Leadership Cake. I am a transformation consultant and leadership coach. I cannot wait to start sharing all things leadership with you.
Our special guest on today's show is Alex Chausovsky. He's an accomplish speaker and director and senior business advisor at ITR Economics. He's a highly experienced market researcher, analyst, and economist with every decade of expertise and subject matters such as macroeconomics, manufacturing, automation, and advanced technology to name just a few. But of course, before we get a chance with Alex, it's The Leadership Hacker News.
The Leadership Hacker News
Steve Rush: In the news today, I explore leaders from yesteryear. We are incredibly blessed on The Leadership Hacker Podcast, having great guests, share stories, hacks, and tips and ideas every week. And they're currently applying their leadership behaviors, coaching, and development activities. But many of us have learned from other people that have inspired generations. And today I'm just going to choose just two who have left their legacy on this world.
The first needs no introduction. Martin Luther King Jr. a celebrated civil rights activists, forever changed America and the world. Famously quoting, “I have a dream that four of my children will one day live in a nation where they will not be judged by the color of their skin, but by the content of their character.” Very few Americans are as celebrated as Martin Luther King Jr. The Baptist minister and social activist who led the civil rights movement in the United States until his tragic death in 1968. As an African American born in the rural South in 1929, he faced upheld battle with his life. Growing up in Atlanta, Georgia, the young Martin was considered a precocious student who paid little attention to his studies and found great discomfort in religion. It all began to change though, in his junior year when he took a Bible class, which renewed his faith. By 1948, he'd earned a degree from Morehouse College before moving to Crozer Theological Seminary in Pennsylvania. It was at Morehouse College that Martin Luther King opened his eyes to the racial inequality and took the action. Following years of successful with civil rights activism, he and 61 of the activists founded the Southern Christian Leadership Conference in 1957. Two years later, he visited Mahatma Gandhi again birthplace in India, which emboldened him to continue down the path of peaceful activism. And on August 28th, in 1963, Martin Luther King Jr would leave his Mark on American history by the delivery of his famous I have a dream speech. King had such a profound impact on American race relations that his efforts resulted in the passage of the civil rights act of 1964, which authorized the federal government to desegregate public accommodations.
The same year he received the Nobel Peace Prize. He'd continue his activism until his assassination on the 4th of April in 1968. And his assassination was a tragic end to remarkable life. He proved just like Gandhi that non-violent protests can influence tremendous change. Maybe 50 years after his death, his legacy is stronger than ever. The third Monday of every January is Martin Luther King Jr day. And now an observed federal holiday in the United States.
Saint Teresa of Calcutta or Mother Teresa ss we now know her. Has left an unforgettable devotion to help the world's poorest and most impoverished and vulnerable people. Her remarkable leadership was even powerful enough to cut cross enemy lines. A strength clearly exemplified during the 1982 CG Siege of Beirut. Mother Theresa managed to broker an exemplary cease fire between Israeli Army and Palestinian Gorillas to rescue 37 children trapped in frontline hospital. She then traveled through the war zone alongside red cross workers to evacuate the young patients.
So, what was it that inspired Mother Theresa tireless drive to help others? Born in 1910, she grew up in a present-day Macedonia, perhaps influenced by her father's death when she was only eight years old, she'd already decided to commit herself to a life of religion, by the time she was 12. Her real journey began in 1929, when she arrived in India and became a Nun and taught at a convent in Eastern Calcutta for several decades. In 1943, the Bengal famine, which killed a staggering 2.1 million was a life-changing moment for Mother Teresa and left unshakeable impression on her. After 20 years of teaching at the convent, she felt a calling within a calling, left her position as headmistress, so she could aid the poor. After moving to the slums, and despite the lack of equipment and supplies, she found a way to open a school for poor children, teaching them to read and write using sticks in the dirt.
Her efforts did not go on notice, a new community soon formed around her. Opening hospitals, clinics, orphanages, and within a few years, her mission went global. By the 1970s, the congregation was helping orphans and those afflicted by addiction, poverty and disability across the world. And in 1979, she also received the Nobel Peace Prize for her work to overcome poverty and suffering. Mother Teresa passed away in 1997, but her congregation continues to live on to this day, spreading her word, her vision, serving those in need. And in 2016, the Catholic Church recognized Mother Teresa as a Saint.
So, two extraordinary individuals whose leadership legacy lives on. That's been The Leadership Hacker News, if you have any new stories or insights, please get in touch.
Start of Podcast
Steve Rush: Alex Chausovsky is our special guest on today's show. He's an accomplished speaker, senior business advisor and director ITR Economics. He's a highly experienced market researcher and analyst who's consulted and advised companies throughout U.S., UK, Europe, Brazil, China, and for the last 15 years as featured on NPR, The BBC and the Wall Street Journal. Alex, welcome to The Leadership Hacker Podcast.
Alex Chausovsky: Thanks so much for having me.
Steve Rush: So, delighted that you've been able to join us on the show. What might be an interesting insight from our folk is to how you've ended up doing what you're doing now. What's your backstory?
Steve Rush: It's an interesting one to be sure. So, I immigrated to the United States from Kyiv Ukraine when it was still part of the former Soviet Union. I was 10 years old at the time, and we became refugees for about a year before we were actually able to enter the United States. But that process of going from an upbringing in communist Russia, to the capitalist society that is Europe, and then the U.S. was a fundamentally transformative one for me, and really is a big part of who I am today of why I chose the career that I chose for myself. And really the way that I view the world through that lens of opportunity and seizing on the opportunities when they become available to you, because you have to be grateful for that. And you know, you never know what's going to happen tomorrow, so you've got to take your chances when they come.
Steve Rush: I bet; you sure do. So that must've been a really challenging time for you and your family. Having to go from what you do to be true at the time to then finding this whole world of discovery, as you kind of started to bump into new things and new ways of doing things and new insights, how did you and your family kind of transition through that?
Alex Chausovsky: Well, I think the transition was much more difficult for my parents. You see, they were in their mid-thirties when we left our previous life behind, they were both highly educated. My mother was a concert level Pianist, then my father was a Graphic Designer, but we only spoke Russian. And so, when the left the Soviet Union, they essentially made the decision of venturing out into the world, not knowing where we would end up or how they were going to take care of the family from a financial perspective. So, to them, I imagine it was much more stressful in terms of putting a roof over our heads and making sure that there's income to provide food and to cover all of the life expenses that we were going to have wherever we ended up.
For me being a ten-year-old kid, it was the adventure of a lifetime. And so, I looked at it exactly, as you mentioned through this lens of discovery, through this lens of adventure and all of the new experiences that I had, whether it was while we were living in Vienna Austria for three months or in Senta Marinella in Italy for about seven months. They were, you know, these things that truly transformed me from a shy kid, living in the confines, under the ceiling of the Soviet regime to someone that believes that as long as you work hard and are willing to do things that others might think too lowly for themselves or not willing to do, then really there's no ceiling to what you can accomplish. And so that's been a big part of who I am. It's been a big part of my career and certainly I'm hoping to pass that mentality and that outlook onto my kids now that I'm an adult myself.
Steve Rush: That’s a great lesson to have. And of course, we always talk about leadership in this sense, but actually leadership is a behavior in my experience, not a job title or a role. I would imagine both of you, even though you might have only been ten and indeed your parents would have come through loads of leadership learning and lessons along way, right?
Alex Chausovsky: Absolutely. Absolutely. Yeah, I can think of many instances both while growing up and as I entered the job market and as I went through college and got my master's degree. Where it really required someone to step up, and seize and opportunity. And I believe that my experiences growing up in the transition from Soviet Russia to the United States really made me very well adapt at recognizing those opportunities and then acting on them. There's a really funny story that I can share with you, that is a perfect example of this.
My first job in America was at 14, back then they weren't too careful in terms of checking the age. So, I started working for the McDonald's Corporation when I was younger than I was supposed to. And essentially this environment required, you know, starting at the very, very bottom. So, I started mopping the floors in the dining room of a local McDonald by my house. And then I eventually rose through the ranks, you know, went to work on the fry cooker then on the grill. And eventually I was able to get to the peak, the pinnacle, if you will, of the McDonald’s career as a young person, that was front registered. There was a particular Saturday where we were going to have the owner of the McDonald’s franchise coming in to check on the store. And so that morning, the manager really kind of fired up the team and they said we really have to be at the top of our game. We have to make sure that we are presenting the best face forward to make sure that the owner of the store is happy when he comes in. And so, through a various series of events, we had a very unfortunate incident happened on the playground of the McDonald’s about half an hour before the manager got there.
And it was a terrible mess that nobody was willing to step up and clean up. But I recognize that opportunity knowing exactly what was coming down later that afternoon. And I volunteered, it was certainly not a pleasant experience, but I got through it. And as a result, the franchise owner, when he actually came into the store, he immediately recognized my willingness to go above and beyond and promoted me to assistant manager at the tender young age of 14. So, it was a major development, as you can imagine, I did not present a severe authority figure as a manager at 14, but the great part about it. And the thing that I look back very fondly was that as a manager at McDonald’s, you have the ability to give out free food. And so, I immediately became the most popular kid in my high school because everybody wanted to be friends with me so that they could get free McDonald's.
And all of that was me recognizing that opportunity to present it itself, and then being willing to do what others weren't willing to do in order to capitalize on it. So that was a great life lesson for me. And I think it should be a lesson to anyone thinking about what it takes to be a leader. You have to be willing to do the thing that you're asking your own people to do, right? And that's like key element of having the team behind you and motivating and inspiring people to rise above and beyond, just the baseline of expectations.
Steve Rush: It's a brilliant story. I love it. And one that you've now actually ironically turned that spotting of opportunities as you called it, into a career.
Alex Chausovsky: That's exactly right.
Steve Rush: So, your focus now, at ITR Economics is spotting opportunities. Just tell us a little bit about the work that you do with you and your teams across ITR Economics?
Alex Chausovsky: Yeah, it's exactly right Steve. We spot opportunities for various industries, but we spot opportunities for companies and we help them capitalize on those opportunities. So, it all revolves around what we call business cycle analysis. Most people look at GDP and other economic metrics as raw values, you know, the value of economic activity and so on. We look at it from a rate of change analysis and leveraging our calculations and our proprietary methodology. What we're able to do is predict for businesses the next low point and high point in their business cycle. And then we're able to turn those into opportunities by advising companies to be aggressive and invest during those business cycle lows when they might not be so busy and might be able to take advantage of some other people's pessimism and lower prices and to ramp up ahead of the marketplace, therefore positioning themselves to take advantage of the growth opportunities of the future to gain market share, and to really separate them from their peers.
At the top of the market cycle, what we're able to do is prevent or mitigate the downside pressure. As we look towards the future and use our forecast, we're able to help companies tighten the belt, make sure that they don't over commit themselves or overextend in terms of capital investment and spending activities. And as a result, we have many, many clients that still to this day, for example, thank us by sending us these massive Christmas baskets at the holiday time to say, you know, if you didn't tell me about the great recession of 2007-2009, as early as 2006, we would not be in business today. And so that's exactly what our methodology is all about, is being ahead of the curve, using our rate of change analysis and leading indicators to help companies identify those opportunities and then help them act on those opportunities when it's prudent to do so.
Steve Rush: Given the shift with the pandemic, hitting us all now, isn't it pretty much impossible to be an economist now?
Alex Chausovsky: Yeah, it's really interesting that you say that because logically speaking, I get where you're coming from, but the reality is, when the pandemic first hit here in the U.S. we reacted right away. Now in hindsight, as we look at the results of our forecast. We know that our methodology held up despite the disruption, despite the black Swan nature of those events, we generated a lot of forecasts in the mid-March of 2020 timeframe. And we've now looked at the performance of those forecasts all the way through the end of the 2020 calendar year. And for a vast majority of our macroeconomic series, things like industrial production, housing, retail sales, employment figures, we even forecast foreign indicators like GDP and industrial production in the UK, in Europe and China, and the accuracy ratings of those forecasts, meaning how close to the mark, where we able to come are all in excess of 96%.
So, three quarters out with the uncertainty and the unpredictable nature, not knowing really how the pandemic was going to unfold. Our reliance on leading indicators and our proprietary methodology really held up. And now with hindsight, we can say with confidence, we were able to help businesses cut through the noise, you know, separate the wheat from the chaff, if you will, and really be able to have that clarity that they needed to make decisions into the future with confidence. And we certainly have a lot of happy clients that are very glad that they listened to us back during that second quarter of 2021, when nobody really knew what was going to happen.
Steve Rush: That's so interesting and data of course, is being relied on more and more as organizations realize the value that data has for them. How would you say the pandemic has shifted how we really use data and how we respond to it at the moment?
Alex Chausovsky: Well, I think in my observation, because half of what I do is deliver presentations at industry events and, you know, boardroom meetings. And the other half is working directly with companies on a one-on-one basis, advising their CEOs and CFOs and as well as COOs in terms of what they should be doing based on what we're seeing in that economic landscape. And I can tell you that the key difference that people have taken from this pandemic is, they can no longer trust their guts. You know, before I would say most people relied on input from their sales teams or kind of, you know, the feel of the marketplace as they're doing their day-to-day activities. But right now, most business owners are convinced that they have to be data-driven decision makers. They can no longer trust that instinct or their guts. They have to use reliable, hard data to make those good quality decisions. And that's exactly what we help them do.
Steve Rush: Of course, data, charting, indicators. They're pretty pointless unless you've got a leader who's receptive and who's bold enough to want to use them. What's the kind of typical conversation you might find yourself having to get people to move away from maybe using their gut to rely on data?
Alex Chausovsky: Well, I think in most cases, we tend to work with small and medium sized companies. And a lot of times the business community in general and leaders in particular tend to think I am unique. My company doesn't perform the way that the economy does or the way that an entire vertical market might. And so, it takes an overcoming of some of those preconceived notions by showing them that there really is a cyclical relationship that exists between your company, the market that you operate in, and overall macro economy. And in most cases, when we talk about businesses of, you know, 3 million upwards of 500 million, there is a correlation between the business cycle overall and their performance.
Sometimes there's a lead lag relationship as we call it, which means that the business either leads the economy as in the case of companies that are involved, for example, in a housing market construction. And there are other sectors that lag the economy. So, understanding that timing mechanism is absolutely key, but once we are able to establish clearly in the mind of the decision maker, that there is this correlation, then they're much more likely to look at the economic data and incorporate it into their strategic decision-making in order to make better informed decisions, rather than going by their gut or by the latest news through the grapevine, as I might be hearing about.
Steve Rush: How do you go about predicting the future that hasn't happened yet. Using historical data such as, particularly in the last 12 months or so, where it's been so erratic?
Alex Chausovsky: So, it's really interesting that we have these series. We call them leading economic indicators. They're essentially data series that consistently and accurately predict behavior in other series over an extended period of time. So, I'll give you a few examples. We typically look at the economy from the industrial perspective, from the business the business perspective, rather than the consumer perspective. Because most of our clients are manufacturing companies, they're construction companies or service providers. They're not companies that deal with selling directly to the consuming public. Now we do have some clients in that space, but the vast majority of them are industrial companies. So, our benchmark for economic performance is typically industrial production. There are at least a dozen series that lead industrial production by at least six months or more. And in some cases, they have this predictive ability of upwards of 12, 15 in many cases, more than two years into the future. And their series that most people don't track. Things like corporate bond yields and verdict for prices. We've got export activity. We have stock market performance. The purchasing managers indices are very popular, but even things that I mentioned already, like housing market data that typically predicts 12 months into the future, what the macro economic cycle is going to do.
So, to give you a specific example here, right now, what we've been tracking in the U.S. is extremely robust rise in housing market activity because of its 12-month lead time. We can say with confidence that there's going to be rise in the U.S. industrial production index all the way into early 2022, based on what we've seen in that housing market data so far over the last 12 months. And so, there was disruption, don't get me wrong. The pandemic clearly disrupted previous trends, but the leading indicators immediately picked up on the new direction. And we were able to forecast when the next low point is going to be, how severe the decline was going to be. And then when that rising trend was going to begin, and now that we look back, it's exactly played out, as we expected. We knew that there was going to be a business cycle low in the first quarter of 2021. That's exactly what has happened. And we are now gearing up for that rising trend and the leading indicators predicted many months ago.
Steve Rush: And I guess what you're talking about in terms of lead indicators, that's just another way of thinking about the economics that are happening now, and then all of the supply chains that feature into what you think is going to happen, right?
Alex Chausovsky: That's exactly right, yeah. A leading indicator is very simply put a series that has historically been able to predict what a different series does. So, when you think about, you know, for example, corporate profits is a really interesting one to think about. Corporate profits as companies recognized profitability, then they then turn around and spend that money on machinery, on equipment, on new buildings. And so, if you look at non-residential construction, for instance, like office buildings, they typically lag the economy by about a year because companies first recognize profits. Then they allocate those profits to spending. And then a year later they're buying a new building or investing in the construction of a new office tower or a warehouse or something like that. So that's what I'm talking about is, these series historically, are able to predict what other behavior is likely to happen down the line. And we're able to leverage some of those insights to accurately forecast performance of both the macro economy as a whole and of key industries, you know, to help companies make those good quality decisions at the right time.
Steve Rush: So, if I'm a business owner or a business leader, and I'm exploring using data maybe for the first time or we're using data in a different way, what's the best way you would encourage me to adopt it or to look at it?
Alex Chausovsky: I think the key is to start with your own performance. We have a great section on our website, www.itreconomics.com/slashmethodology that teaches you how to track your own sales for unit volume shipping. So whatever metric you think is important gauge of performance for your company, look at how to calculate your rates of change, plot that visually, and then how to identify leading indicators for your own business. So, series that will actually help you predict what your revenues are going to be two, three years into the future. And it's really, really important that you do this on an ongoing basis. So, most companies already calculate the growth rates once a year. They'll take a look at their overall performance for 2020 for example, they'll compare that to 2019 performance and they'll calculate a growth rate. And then they'll make a lot of key decisions based on that number.
But the reality is that number changes throughout the year and you have to stay on top of those changes to identify shifts in your own business cycle, because those shifts come with changes in your decision-making and in your actions. So, the key thing is getting access to good quality for your own business. Most companies use monthly sales as a barometer of their performance, and then plotting that as rates of change, tracking their performance over time, and then leveraging that in conjunction with leading indicator input, to be able to predict business cycle turns and then connecting that to the decisions and the actions that you take as a manager and as a leader.
Steve Rush: That sounds like a really neat approach actually, really like that. I suppose, if I'm not leading a business or I haven't got all of that kind of economic data, what about some of the practices and principles that you have experienced that I might want to adopt locally with my team, any the idea?
Alex Chausovsky: Well, I think, you know, a key part of leadership for me and I've worked with a lot of different organizations over the last two decades. And one of the things that I see as a consistent measure of success and a reflection of success in businesses are business leaders that are transparent and very direct with their employees. A lot of times, especially in larger organizations, you tend to want to hold your cards close to your chest as a business leader and as a key decision maker and the companies that are more transparent. That get more buy-in from their employees, right off the bat and have a partnership rather than the traditional employee, employer relationship. I see outperform the rest of the market time and time again. And so, I think it's that element of it, is remembering that you hired these people for a reason. You think they're talented. You think they're smart. You think they're bringing a lot to the table, be honest with them, be transparent with them and make sure that you help them see that your fortunes are tied together. As the business does, so will their performance likely do, so the better they can contribute to the vision, the goals of the business, the better along their own path to success, they're able to come. And that makes all the difference in my opinion.
Steve Rush: And data of course, people think is a physical numbers metric. But actually, data is observations, environment, how people are thinking and feeling, you know, how often we might want to check in with them as to how they're doing, whether we do pulse tests or employee surveys, or just ask people. That's still data though, right?
Alex Chausovsky: Absolutely. It is information, it's inputs that you should be incorporating into your decision-making process. And, you know, to your point, a lot of times the people on the front lines in your organization are going to have brilliant ideas about how to drive the business forward, whether that's new product development or customer relationships that are either excellent or under strain. You know, you have to be able to give people a platform to feel comfortable in communicating that. Not only to you as the business leader, but up the chain of command throughout the organization. And if they're able to do that, if they're empowered, to be able to talk honestly and openly about all of these things, even if they may be somewhat negative, like identifying the challenges and the problems that exist in the company. I think those types of are positioning themselves to have a lot of success into the future.
Steve Rush: I Agree. So, this part of the show Alex, we get to spin around and start to hack into your leadership mind. I'm going to ask you firstly, to distill all of your lessons of working with great people and leading others to distill your top three leadership hacks. What would they be?
Alex Chausovsky: Well, I think I've touched on some of them already, but I think it's that transparency and being open to change, I think is a very critical part of a successful business leader. You have to be willing to recognize that just because you've been doing something a certain way for a long time, that doesn't make it appropriate for today's marketplace or for the way things are unfolding around you right now. So, you have to be willing to recognize that change is a constant part of the way that you do business.
I think the second part that I mentioned earlier is, you have to be willing to do the things that you're asking your own people to do. They have to know that you're willing to get into the trenches with them. You wouldn't be asking them to do something that you wouldn't be willing to do yourself. And I think the last thing that I'll mention that is probably the most important one from my perspective, and this is being totally transparent with you from observations that I've made at the various companies I worked at. I've worked in banking; I've worked in marketing for a telecommunications firm. I worked in sales, selling computers at a major technology company. Now I'm in this market research slash consulting world, and that is people behave the way that you incentivize them to. And a lot of times business leaders don't see that connection or they fail to incentivize people to get the right kind of behavior out of them. But that's, I think probably the biggest driver of your employees, morale and behavior. If they feel incentivized and rewarded for getting the kind of results that you want for your business, then they're going to do everything that they can to get you there. If they don't. Then I think you're going to find a lot of people kind of default to this cruise control mode and they just do the bare minimum. But if you give them a reason to behave in a certain way, you're going to get that best performance out of them. So, I think that that's the most important one.
Steve Rush: It also has the effect that could be impacted negatively. So, if you incentivize a workforce and if you look back to the banking crisis, as an example. Where highly incentivized sales forces may be sold products that were not necessarily appropriate, the same lens applies, isn't it? So incentivizing people could be great and get great results if it's the right thing. But if you don't do it right, then unconsciously create the wrong behaviors as well.
Alex Chausovsky: Yeah, that's exactly right. I mean, you don't have to go all the way back to the, you know, the crisis to see that happen. Wells Fargo recently with all of the extra accounts that their reps were opening for people and Volkswagen in Europe is another great example of the, you know, the diesel emissions.
Steve Rush: Yeah, that’s right. I remember that.
Alex Chausovsky: Fraud that was going on there. So, there are numerous examples of the negative implications of this incentivization or incentivizing the wrong type of behavior.
Steve Rush: The next part of the show, we call Hack to Attack. So, this is where something in your life or your work in the past has happened, and it was an adversity, but as a result of it, you now have learned from it and you use it as a lesson in your life. What would be your Hack to Attack?
Alex Chausovsky: I think you have to put yourself out there, you have to open yourself up to failure in order to succeed down the road. I feel like this resiliency that a lot of immigrants bring to the table is a result of multiple failures throughout their lives. And the difference being that they have no choice, but to bounce back from that, there's just no other option. And so, I think recognizing that failure is a part of the growth that you have for yourself as a leader, for your organization and for some of your employees. It's a very important component that needs to be, you know, proactively addressed by business leaders. Some of the biggest breakthroughs come on the back of failure. And so, I think that, you know, not only being willing to fail, but also having that resiliency to bounce back from failure, those are going to be absolutely key to success onward into the future.
Steve Rush: It's a really neat reframe actually, because we talk a lot in corporate world these days around diversity and inclusion, but I wonder how many have actually made the direct correlation to families who have fled adversity, have had to go through real challenge. And, you know, you described that journey with your parents coming into numbers of different countries before arriving in the U.S. that is going to create super strong foundations that you learned from. And I just wonder if organizations are aware enough to tap into that consciously right now, what's your thoughts?
Alex Chausovsky: I think that there are organizations that recognize this and they tap into it, and those are very successful organizations and yet others are, I think, in that grouping that I mentioned earlier, well, we've always done it a certain way, and we're going to continue to stick to that because it has worked for us historically. I think in general, this idea of people that have been through the ringer are going to be tougher and more resilient within your organization. Does need to be recognized on a broader scale than it is right now. But I think that the momentum is there for that to happen. I mean, we live in a, such a globally interconnected world. If you look back just a couple of decades ago, the typical makeup of businesses was much less diverse and both from a racial perspective and from a gender perspective. And I think that there is this increasing, you know, awareness of the benefits that, you know, diversity brings to the table and inclusion brings to the table. But as with many significant changes the companies go through, it's going to be generational. It's going to take time for everybody to, you know, kind of adapt to that. And I think, you know, interestingly in the U.S. we've got this baby boomer phenomenon over the next 10 years, you're going to have 10,000 people per day retiring. And a lot of those people right now are in leadership positions.
Steve Rush: That’s right.
Alex Chausovsky: They're owners of businesses, they're managers, they're CEOs. And I think as the next generation is my generation Gen X-ers and then millennials behind us, step into those leadership roles. You're going to see a hugely different perspective on the behalf of those younger leaders. That's not to say that there, aren't plenty of very aware and very woke, let's say leaders in the baby boomer generation right now. But I think it's going to be even more acute when you see some of the younger folks take those leadership positions.
Steve Rush: And I would hazard a guess that there's lots of data that sits behind that to help organizations start to think about how they're hiring and for what reasons they might be hiring.
Alex Chausovsky: Yeah, there absolutely is. Now that's not an area of specialty for us at ITR, but we do have partner companies that can help with that. And certainly, businesses need to think about that. They need to think about the fact that, you know, most of the products and most of the customer demand that's going to happen. Let's call it even in the 2030s is something that's going to look drastically different than what they're experiencing right now. So, they need to be willing to position themselves. Take that vulnerable spot of being open to significant change because as we know, companies that don't change are often left behind. And so, if you don't want to be one of those businesses, you've got to continue to evolve. And this diversity and inclusion is a major component of that evolution.
Steve Rush: Yeah, it is. And I'm going to call it here first that I think that the group of people that are in high school education now are going to be the next generational shift. So, we have a workforce now of Generation Z that are in the workforce that haven't been born since the new millennium and this change in what we've suffered in the last year. I think we'll spurn the next generation that will be more resilient and will be more thoughtful and who knows what the future holds, right?
Alex Chausovsky: Yeah, you're absolutely right. I mean, it'll be fascinating to see what Generation Alpha is going to bring to the table as they mature. And, you know, every generation has this transformational moment, but I think you're right. The pandemic was such a, you know, scale level event and so disruptive that it's going to be very difficult for the young people to not put things in relative context to 2020 and the disruption that brought to our lives,
Steve Rush: Very wise words. So, the last thing we get to do with you is give you an opportunity for a bit of time travel. And as a Gen X myself, this is going to be an opportunity for you to bump into your 21-year-old self and give them some advice. What would it be?
Alex Chausovsky: The advice that I would give my 21-year-old self is be more aggressive with investing when you are younger. I think whether that buying your first house when you're younger and signing up for a, you know, a 15-year short term mortgage, and then enjoying the benefits of that as you get into your late thirties and early forties, kind of the mailbox money as we call it here, in terms of becoming a landlord. Diversify your wealth and your income flows by investing in your retirement portfolio, as early as you can, as aggressively as you can. And all of that I think is focused on this concept of live below your means. I think that a lot of young people that are born into some level of privilege, it's such an alien concept to them that, you know, they allow this lifestyle creep to follow them throughout their career. As you start making more money into your thirties, into your forties, you just continue to keep up with the Joneses.
You tried to get that BMW, or you buy the bigger house, or you go on the fancier vacations. And I think that's something that is missing the big picture, which is, you want the position yourself to be in a place where you can choose what you do and becoming, you know, independently financially wealthy, whether that's rich or just stable enough to say, no, I don't want to do this thing. I can have other options available to me. That's the advice that I would give my younger self is, to be more aggressive in those terms. As far as, you know, in your early days, set a culture and behavioral pattern that you live below your means, and you sock at your money away and then be aggressive with that savings. Don't just let it sit there in an account, put that money to work, start a business, buy that property, invest in the market and let the compound interest work for you over time. I think that's a really important notion that many young people don't understand
Steve Rush: Yeah, I'm with you. So, Alex you are such a fascinating guy. I've really loved chatting with you. You've got a wealth of knowledge and wealth of experience. For our listeners who want to connect with you and learn a little bit more about the work that you do with ITR Economics. Where's the best place for us to send them?
Alex Chausovsky: Well, you can certainly check out the website that I mentioned earlier, www.itreconomics.com, We also have a social media presence on LinkedIn on Facebook and Twitter. My personal Twitter handle is @achausovsky. So, my first initial, last name. Certainly, would love some of your listeners to follow me. We're always putting out free content, blog posts and podcasts episodes, and opinion pieces, and anything that's designed to help people cut through the noise and make good quality decisions at the right time. So, I would certainly love to engage with your audience on any of those channels that are available to them.
Steve Rush: And we will help you do that by putting the links in our show notes.
Alex Chausovsky: Wonderful. Thank you so much.
Steve Rush: Alex, has been super talking and thank you for coming on our show and sharing your wisdom and your lessons learned, and here's to the prediction of getting out of the pandemic and developing our thinking and our behaviors for the future. So, thanks for being on our podcast. Yeah,
Alex Chausovsky: Absolutely. Thanks for having me and I hope we get to do it again soon.
Steve Rush: You're very welcome.
Alex Chausovsky: Take care.
Steve Rush: Thanks Alex.
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