- THE MAGAZINE
Are you as tired as I am of reading, hearing, and being bludgeoned to death with news of our deteriorating economy? No doubt, we are mired in the most trying economic times that many of us have ever experienced, and I’m not encouraging you to become human ostriches and stick your heads in the sand.
Are you as tired as I am of reading, hearing, and being bludgeoned to death with news of our deteriorating economy? No doubt, we are mired in the most trying economic times that many of us have ever experienced, and I’m not encouraging you to become human ostriches and stick your heads in the sand. But remember: the news media needs a good headline just like we do when marketing to its customers.
Yesterday the headline screamed the stock market had dropped 800 points but you had to read the whole article to realize at the bell the drop was only 350 points. There were frequent comparisons to the October ‘87 crash, but the drop at that date was over 20%, whereas yesterday’s was only 7%. Very little was made of the point that oil prices have dropped to an eight-month low, a 40% drop since July 11.
Finding the good news is always more difficult than the bad stuff. Good signs do exist, such as Warren Buffett investing $5 billion in Goldman Sachs, but they get overlooked in a deluge of depressing news. Knowing this information is not going to make you a financial wizard (as if the current wizards are doing well) but only to point out that we have no control over any of this, good or bad.
One of my favorite bloggers, Josh Kaufman, recently wrote an article outlining his steps for achieving peace of mind concerning the economy:
- Turn off the news.
- Determine what you can and can not control.
- Allay your fears with scenario planning.
Invest in Intangibles: Knowledge, Skills, and Abilities
The safest investment you can make right now is an investment in your own knowledge, skills, and abilities. Knowing how to build and improve any type of business is one of the best general-purpose skill sets you can have: there have always been opportunities for people who understand how to create value for others, even in the midst of the Great Depression. (Which, for the record, I don’t think we’re even remotely close to repeating.)
The wonderful thing about investing in yourself is that your investment’s worth doesn’t fluctuate with the fickle market. If you focus on making yourself more valuable, you’ll be well prepared to improve your situation in even the worst of markets.
Josh created a website that includes the 77 best business books ever written. Jon-Don recently purchased the entire collection for its corporate library so employees can check them out. With 15 additional resource books, the total cost is approximately $1,500. This may seem like a lot of money but the idea is that by reading the books, you will have read everything you would have read in an MBA program. The site also has discussion boards in order to discuss the books with others.
If money is tight but you agree that investing in your knowledge base is a good idea, I have some recommendations for other blogs. Reading them can open your mind to new ideas. Creativity is a critical skill to have during tough times. These three authors are just a sampling of what is available. I have chosen each because their current posts give us tips on how to handle the economy.
Seth Godin is one of the most prolific authors of marketing books and the best-known blogger on the subject. Here is one of his recent posts that cover the same subject as Josh Kaufman:
“I've seen it before and I'm sure I'll see it again. Whenever a business cycle starts to falter, the media start wringing their hands. Then big businesses do, freelancers, entrepreneurs and soon everyone is keening. People and organizations that have no real financial stress start to pull back, "because it's prudent." Now is not the time, they say. They cut budgets and put off investments. It's almost as if everyone is just waiting for an excuse to do less.
In fact, they are.
Growth is frightening for a lot of people. It brings change and the opportunity for public failure. So if the astrological signs aren't right or the water is too cold or we've got a twinge in our elbow, we find an excuse. We decide to do it later, or not at all.
What a shame. What a waste.
Inc. magazine reports that a huge percentage of companies in this year's Inc. 500 were founded within months of 9/11. Talk about uncertain times. But uncertain times, frozen liquidity, political change and poor astrological forecasts (not to mention chicken entrails) all lead to less competition, more available talent and a do-or-die attitude that causes real change to happen. If I wasn't already running my own business, today is the day I'd start one.
One good example of an aggressive company looking to increase business during this period is Southwest Airlines. As major airlines cut 1/3 of all available seats, Southwest will be swooping in to pick up the excess. I doubt if the legacy carriers ever get those seats back. Now is not the time to cut back on your marketing. Just make sure you are targeting the right people.
Tom Peters became the father of business books when he coauthored “Search for Excellence” 25 years ago. His blog is irreverent to say the least but he also weighs in on the economy in three different posts:
- The Black Swan 44: Tactical Rules for Survival (and Success) in Looney times.
- Surviving and Even Thriving Amidst the "Perfect Storm”
- The Basics Are the Basics, Are the Basics, Are the Basics: The Worse the Times, the Better They Work.
A quote from Horst Schulze, former president of Ritz Carlton Hotels, upon opening a new chain of luxury hotels: “I [will] not accept the explanation of a recession negatively affecting the [new] business. There are still people traveling. We just have to get them to stay in our hotel."
You may think there is a big difference between carpet cleaning and staying in a luxury hotel. But there are many choices of luxury hotels. The choices for cleaning are few, rent a machine, hire a pro, or don’t clean. Once a customer uses one of those rentals, they seldom do it again. Not cleaning leads to an unhealthy, unsanitary, and a long-term loss of value. When you explain it in these terms, the choice becomes simpler.
We should paraphrase Schulze and not accept the explanation of a recession negatively affecting our business. Your new mantra is: I choose not to participate in the recession.