You probably heard the news that the Fed raised U.S. interest rates last Wednesday for the first time since 2006.
I want to talk about how this big change, a move away from “near zero” interest rates, makes people nervous. Because you’ll see the same nervousness with any big decision in the business world. If your goal is to not make people nervous, you basically need to get out of business.
First, what’s the big deal? The U.S. has been at “near zero” interest rates for the past seven years. Here’s a look at historical interest rates, where you can see what “normal” looked like before the drop to “near zero” levels, courtesy of Trading Economics:
If you read the business press, you’ll see one reason to increase interest rates is to give a cushion, allowing the opportunity to reduce interest rates in the future. You can’t reduce from zero. So if you believe you can safely raise interest rates now to something more historically normal, you have more flexibility in the future.
Like I said, though, not everyone thinks this move is safe:
Here’s the bad news: Fed officials have a lot of work to do to convince markets that everything is going to be just fine. Because there are some ominous signs that have respected thinkers, from DoubleLine’s Jeffrey Gundlach to former Treasury Secretary Larry Summers, rather worried. They see a greater chance of the U.S. sinking into a dangerous, slowing spiral that ends with recession.
I’m not going to debate the merits of the Fed’s decision here. What I’ll point out is that it’s a big move, and with any big move, you’ll sense a fear of change. The above quote reflects that fear.
As you build your career, you’ll help make bigger and bigger decisions. No matter what choice you make, you’ll scare people. You could scare your employees, or your investors, or your customers, or any other stakeholder in your business.
Smart people will be able to craft compelling arguments for or against any choice you might make. It can be scary to read antagonistic arguments, or to hear antagonist comments in a meeting.
Please know there’s no way to avoid scaring people. There’s no way to keep someone from crafting a narrative about why whatever it is you’re doing won’t work.
That’s one of the greatest challenges of career progression. Do you have the stomach to risk being wrong? And not just being wrong, but being wrong publicly? It’s one thing to make a bold call in the privacy of your office and not have it go your way. It’s another to do that in a meeting room, in front of your boss, and your boss’s boss, et cetera.
If your goal is to not make people nervous, or to not antagonize them, you’re better off keeping a low career profile. Career advancement might not be in the cards for you, if your core value is to not rock the boat.
At the same time, you can rock the boat in prudent ways. While there’s always a chance you’re wrong, you can do your homework to make sure you’re not falling into a well-known trap. Know what the risks are, and understand (a) how you can mitigate them or (b) why you can disregard them.
Learn about history. Read the business press. Talk with experienced folks at your company. You often won’t have a “safe” path to follow. But with confidence and homework, you can make a good decision and embrace the fact that every choice will have its detractors.