Economic recovery? It’s up to you.

August 29, 2010 at 1:28 pm Leave a comment

I’ve been participating in a Linkedin discussion among Vistage / TEC CEO Leadership group members. It began with a link to “Here Comes the Recovery!” by New York Times business blogger Jack Stack (bio). The article begins…

After spending the last six months on the road talking to hundreds of business owners around the country, I have come to a conclusion that might surprise you: the economic recovery is already well under way. And, if you don’t start putting a strategy in place to take advantage of it, you’re risking the future of your company… (continue reading)

A response to the discussion by Lanny Goodman seemed particularly insightful.

As Vistage chairs are fond of saying, “hope is not a strategy”. The reality is “the economy” is a phantasm created by economists and the media. The only “economy” that matters is the network of you and your customers.

In fact, I think the whole concept of “recovery” is a dangerous one. The term implies things going back to the way they were. I don’t think so. Let’s be clear: trillions of dollars of funny money debt and overheated housing values that have fueled the economy over the past 25 years have disappeared and seem very unlikely to return any time soon. Hoping for things to go back the way they were is just a form of deer in the headlights paralysis.

Quoting from (a previous) comment, running out of oxygen is the most likely outcome for anyone who is “holding their breath and hoping” for anything in this day and age.

If you are ADM or Exxon, your fortunes are pretty much tied to “the economy” in a macro sense. For the entrepreneurial company, sure a slowdown in the turnover of money impacts the business as it has been. But the number of dollars changing hands every day in this country (and internationally) is unthinkably huge.

How many new customers / products / niches do we actually need to sustain and grow a healthy business? Do the math. Of course for each company it will be different, but when you pencil it out, it isn’t that big a number. Two thousand people spending $5,000 a year is a $10 million a year business. Could you find a new niche you could develop to that level?

It’s useful to remember that many of the great fortunes of the early 20th century were made during the depression.

As entrepreneurs, we need to quit worrying about “the economy”, let go of the past and start scanning the horizon for the many opportunities that exist for companies that are willing to reinvent themselves.

Forgive me if I seem strident, but there has been way too much entrepreneurial hand wringing in the past couple of years in my opinion. As one of my former employees who was a category one bicycle racer used to say, “Don’t ask me how many times I fell down. Ask me how many times I got up.”

Waiting for the “recovery” could be a fatal strategy. The key from my perspective is how leaders answer one key question: “If business is down 50% in my sector, what do I have to do to get more than my fair share of the remaining 50%?” If cutting out the middle man is the answer, go for it. If improving customer service or tweaking product design is the key, do that.

What are you doing to create your own economic recovery? What have you done?

Ken Sethney [marketing coach]

Entry filed under: CEO coach, management, marketing coach, strategic planning.

If you’ve never failed, you’ve never lived. To win in emerging markets, move first.

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