This Is Not A Recession

WLTM people who remain determined to find the seeds of positive transformation in today’s chaos. Read this, and if makes sense to you, let’s talk. Optimists need to seek each other out in this climate.

It may feel today as if we are living through a recession, or even a depression, but that’s a mistake. It’s vital to understand this because the way to survive a recession – cut back, hunker down, wait for it to pass – will not guarantee a future once the crisis is over. In fact, it will probably guarantee that you won’t have a future once the crisis is over.

This is because what we are facing is not recession but a reconfiguration. Everything has been blown apart, and will be put back together differently. The rules are being changed, and the stakes have been raised. Let’s assume that a CoVid vaccine is launched by next spring, and by this October 2022 we no longer need to organise ourselves to control the spread of infection. Where will your business be then? Will you be just “still there”, exhausted and weakened? Or will you look back and think that, for all the chaos, this present crisis was the catalyst for huge positive change; for transformation? Those are the options; transformation or a marginal existence. The option that doesn’t exist is “back to normal.” Because there will be a new normal, and it won’t feel very normal for a very long time.

This matters not just for your business but for the economy as a whole. If everyone tries to get back to “normal” or, worse, waits for other people to get things back to “normal”, then the prospects are bleak. Anyone who can engage with the fact that everything has changed and adapt to the new will benefit society just as much as they benefit their own business.

Take heart from a conversation I had with a client, the head of a digital marketing agency. He told me: “Most of our competitors have people on furlough and have stopped all business development. We on the other hand have added 15 new clients since the start of the lockdown.”

So what do you need to do? First of all, recognise that you are a startup again.The defining feature of the startup is that nobody knows what will make it successful. The only thing the founders know is that they need to try lots of things, and that success, when it comes, will look very different from what is in the plan. You need to get into, or back into, that mentality. But there is an extra twist. Startups need to handle the troubling thought that “nobody knows anything”, but they have an advantage. It is the advantage of no baggage. You, as an established business, have baggage. It’s all the accumulated knowledge, systems, practices, assumptions and KPIs that have made you successful up to this point.

I have spent a lot of time helping businesses in sticky situations, and have always found that finding the new is much easier than letting go of the old.There are things you can’t see because you are too close to them; as one of my associates put it brilliantly, “you can’t read the label from inside the bottle.” This means that, strangely, you need help from someone who knows less about your business and your industry than you do. To illustrate; on my bookshelf I have the CIA’s operating manual for intelligence analysts. It tells the story of the reunification of Germany. At the end of the 1980s the Soviet Union was collapsing and had announced it would no longer intervene in the affairs of its satellite countries. Unrest was increasing, and the Berlin Wall was about to come down. It was becoming clearer and clearer that the two Germanies would reunite. Clearer and clearer, that is, to everyone except the German specialists in the foreign ministries and intelligence services. Some of them “had to be prodded by their more generalist supervisors to accept the significance of the dramatic changes…”

So beware of specialists at this time. They are specialists in the way things used to be. They have been too close to it for too long.

Also beware of anything that might be described as “industry best practice.” In dealing with recession, the playbook is quite standard, and can produce dramatic improvements. The biggest project of that type I did was a global software business. I had to work quite hard early on to persuade the auditors it was worth £30m, but within two years it had been sold for £200m. What I did was absolutely standard; control costs, manage cash better and wait for the market to recover. That won’t work, though, when the requirement is transformation. Then there is no playbook. I recently completed an engagement with a social media agency which found itself in an over-commoditised business and transformed itself into a high-value marketing consultancy. In that case the ideas came from fields as diverse as behavioural economics, 1970s military strategy and a story about Somali pirates.

So that’s the way it is. The task is not retrenchment but rethinking and reconfiguring. The risks and difficulties are obvious, but just beyond your sight are some huge opportunities.

Did this resonate with you? If so, let’s talk. Maybe you have plans you’d like to discuss, or you’d just like to talk to someone who’s working hard on keeping optimistic. No obligation, no sales pitch for anything.  Email me and we can set something up.