I guess one positive outcome of writing this article was the realisation of how much experience I have with dealing with recessions and economic tumult. I have clear memories of sitting in the front seat of our red VW Beetle with my dad as we waited in line for petrol during the 1973 ‘oil shock.’ At the time I did not see the wider implications of this global event although I did notice our Mercury station wagon with a huge v8 was parked and we bought the Volkswagen. I can also recall the waves of massive Boeing lay-offs that would affect the moms and dads of my school mates. I guess the outward signs in my own family never really reflected what others may have endured. However as an adult living in Australia I can recall being an employee and manager during previous recessions and downturns. I must admit the first one in 1987 really did not register a blip on my radar despite me living in Adelaide. By the time 1990 arrived I realised the economic climate was not improving in South Australia. I made the decision; helped by my employer at the time to move to Queensland.
Queensland? Yep, and the change was amazing. Brisbane had turned on the engines of growth after realising the 1988 Expo proved the city had much more to offer than white loafers, humidity and afternoon thunderstorms.
Well here I am at the end of 2008 and all I seem to get from the media and the scores of gurus and pundits is doom and gloom.
- The Media always makes the situation seem much worse I have always had a weird fascination with doom and gloom so don’t count on me to stop buying the Financial Review or The Australian. I also know that the human brain reacts to the information it is fed. Every time the ‘economy’ suffers a hit or there is information that supports a doom and gloom scenario it will be magnified one-hundred fold. One is almost able to recite the article or newscast verbatim as it gets repeatedly pumped into our heads via every orifice courtesy of every media source.
- Commercial activity still occurs during a recession. Following on from number one; a person is left with the impression that everything ends during a recession. I suppose this should be an obvious point but I add it for my own peace of mind. Business is still performed in a recession but you need to be smarter, more effective and agile.
- Knee jerk reactions are always detrimental to sustainability Slash and burn once worked in the rainforest to create an environment for horticulture but it does not work in most human endeavours. When you cut resources drastically you reduce the ability for regeneration once things improve. It is like chopping down all the trees during the drought. Undertake whatever hardship is necessary to maintain your organisation’s ecosystem but remember that once the economy is revitalised the fittest most capable organisations will prosper first and achieve competitive advantage.
- Keep your eyes on the medium to longer term when dealing with the short term. When I was taught to drive I can remember my instructor saying, “Keep your eyes off the hood, look down the road and prepare for where you are heading.” I do not exactly know why I kept looking at the hood- particularly given my driving instruction was delivered in the late ’70’s when most automobile hoods were not worth looking at. The lesson is clear- you must always keep focused on the big picture. There are plenty of analogies, but if you lose track of your big picture; goals, objective and milestones during the rough patch, you are sure to be off course when more prosperous times return. Do not waste time course correcting when good times return. When the wave of recovery crests; ride it in!
- Recessions can be healthy. Like a detox when some of what you feel and see is evidence of changes occurring in your body, the economic recession eliminates waste products of excessive over consumption. “Golly- you mean folks don’t need to have two Landcruisers to commute to school and work?” “How much was the bonus we paid the CEO?” It is human nature to be parasitic. As a species we have a long and proud history of taking all we can get when whatever we want is available. Waistlines, wallets, and egos are easy to feed when times are good; when the going gets tough you are forced to be discerning about where you spend your resources. Will it be a few doughnuts with a drowsy afternoon or a salad with a productive four hours of business development?
- Recessions are inevitable. Is there any argument that time is cyclical and not linear?
- Recessions should force you to focus on the fundamentals. What are the fundamentals you may ask? Well there is really no secret to doing business successfully. Our society has added layer upon layer of complexity to operating a business. On top of that we have created educational brands like ‘Ivy League’ and MBA to add further mystique to what I believe should be a vocational pursuit. I have worked for companies run by ‘Ivy League’ business graduates and although I get no joy in saying so, they were the most mediocre organisations I have ever been involved in. “Keep the top line healthy and the bottom line will look after itself,” is the old adage. This is a nice adage but only partially true.
- Recessions are great for creative destruction and creation. A recession is a good time for some belly gazing. But do not waste your time!
- Manage your mental and physical health. This is always a necessary part of being a business person or a person of any persuasion; imagine the alternative. You cannot escape the fundamental truth that your physical and mental health are tied to how well you behave and perform as a human being. The environment out there is demanding more of you so you need to be in a position to deliver. I notice with my own body I am far more positive and recover more quickly from a bout of the blues when my body is being looked after.
- I have to add this last one- LOOK AFTER EACH OTHER! There are going to be folks who are hit hard by the economic environment. Now is the time to stop paying ‘mateship’ lip service. Look for signs that an individual or family may have hit hard times and do what you can to help them out. It is often said hard times are what forge character- this maxim operates on the individual, family, community and national levels.
