In talking to many people about the global recession, I’ve observed the extremely wide range of reactions. Some are visibly shaken, frozen, and hoping this recession will pass too. Others recognize the challenges and are doing their best to adapt.
Everyone wants to know what’s going to happen to the global economy.
Having looked at recessions for decades, here’s my firm conclusion.
It doesn’t matter what happens to the global economy.
It only matters what happens to your economy.
The economy can recover, but your economy might not.
The economy can stay depressed, but your economy might recover.
It is useless to look at forecasts from economists. (Hint: They are right about half the time.)
It’s even more useless and downright harmful to watch the news or read articles about the recession. (Hint: Their job isn’t to inform you. Their job is to scare the crap out of you to generate page views that drive their advertising revenue.)
The single most important thing you can do in this recession is to pay attention to your economy.
Talk to your customers. Talk to your prospects. Talk to your frontline employees. Study what your competitors are doing.
GDP doesn’t matter…
Unemployment doesn’t matter…
Economic stimulus doesn’t matter…
…unless those things impact your customers, prospects, employees, or competitors.
Then it matters to you.
There are two equally important things you need to be doing.
First, you need to be assessing your business and industry quantitatively.
Second, you need to be discovering shifts in your business or industry qualitatively.
Here’s why you need to do both.
Shifts in thinking, attitudes, needs, and concerns can be detected qualitatively before they impact decisions and actions that get measured quantitatively.
In a stable economic environment, market shifts tend to be incremental if they’re present at all.
In a changing economic environment, market shifts can be much more abrupt and more dramatic than in stable conditions.
The most important thing in managing a business is to get as much visibility into changes in your economy as possible, so you can adapt proactively or at least react quickly.
The companies that survive and thrive in recessions aren’t the biggest companies or the strongest, they are the ones that can do this. Be sure you can adapt if needed.