The leading indicators are getting better, the lagging indicators are still getting worse, but (some) at a slower rate. The key question today is around sustainability. How big an effect on the positive indicators comes from world Governments’ huge fiscal and economic stimulus packages and how much from real consumer/producer demand?
One thing is certain, when one sees contradictory evidence it means things have stopped getting worse, we are bumping along this bottom. This creates a dilemma for businesses. Should they continue with their defensive strategies such as avoiding risk, conversing cash, sitting hard on expenditure; or should they try to be first out of the blocks, attempting to steal a lead on more pessimistic competitors?
Here is a simple exercise to help you understand where your own planning vs. recession mind-set is:
Imagine the economy you operate in was clearly in growth mode at a reasonably sustainable level, but your own businesses performance was still where it was today. What would you now do differently? What ‘good to go’ plans can you instantly activate?
When one our of clients recently commissioned us to help in this area they realised they had nothing to push the button on, they had fallen into the trap of simply hoping that demand will pick up and that will convert into their own numbers growing healthily again.
This approach has two shortfalls. Firstly it means a more alert competitor might be exploiting post-recession opportunities ahead of you because they have planned accordingly. Secondly it assumes your market will be the same after this recession as before it, everybody just going back to business as usual.
Being in recessionary times should not restrict your creativity or more expansive thinking. Don’t confuse the timing of when you might do something with intentions – this is our innovation pipeline, these are our market beating ideas etc.