There’s been a lot of chatter in various circles about the economy - whether you’re watching the Sunday talk shows, listening to CNBC, or following Twitter. All one need do is watch the gyrations of the stock market to become clear that no one is certain what lies ahead.
The point of this post is not to add to the speculation. Quite the opposite, it’s to remind everyone seeking fast, profitable growth that FOCUSING ON THE ECONOMY AND WHETHER THE RECESSION IS OVER IS THE WRONG FOCUS.
I’m getting concerned. As I see more executives talk about the possibility of the end of the recession, it reminds me of the wartime movies when everyone would talk about the possibility that the war was ending. I’m sensing a false sense of hope that “things will return to normal.” That, soon, we’ll be back to the hyper-growth, fish jumping out of the water times we had before.
The last time I saw this was in 2001-2002 when I was a financial advisor. I remember sitting in a senior advisor’s office one day when the market rallied like 500 points (I do not remember the details). He commented (and I believed) that this meant the downturn was over – we could get back to things as normal. Of course, the “correction” wasn’t over, and as we went into 2003 we allowed the illusion of normalcy to further erode fundamentals.
I’m not pessimistic about a recovery – I just don’t care. Why don’t I care? Several reasons:
- I have no control over it.
- We’re a sneeze away from just about anything.
- No one has any idea what the future holds, and all this speculation can do is create more illusions
- Most importantly, it doesn’t matter. Whether the economy “recovers” or not has little impact on the decisions that I have to make as a small, mid-market business (SMB) executive.
I’m sure that the executives at Coca-Cola, GE, Amazon, etc., need to worry about GDP, consumer-spending rates, inventory levels, etc. I also understand that these issues will impact the results many SMBs experience, it just doesn’t have any meaningful relevance to the decisions executives need to make.
Look, there are only three scenarios that can occur:
- We enter what economists call a recovery – though I highly doubt it will really feel like one for a while,
- This is the recovery – welcome to “normal” everyone, or
- Another shoe drops and things get worse.
Now, ask yourself how are the critical, strategic decisions you need to make impacted by any of these scenarios? My bet is that the decisions you make are no different at all. I wrote about this at the early parts of the recession, and I think it’s important to reiterate it now.
Here are the dominant questions EVERY executive should be asking – and actively answering:
- Who are our core customers? What are our core markets?
- What are we doing to be/become indispensable to these people?
- Is our business model really sustainable? Please note that if you don’t have a clear, powerful answer to the question above then by definition your business model is not sustainable.
- What is our relentless growth execution plan?
- Can the people we have execute the answers above? (Ask the question again. This is probably the most difficult and important question, there are no points for self-deception.)
- What are we doing to immediately and permanently lower our cost structure, without it negatively impacting our ability to become indispensable and to execute our growth plan? If you can’t, again, your business model is not sustainable.
As an individual, there’s nothing more that I’d like than a strong recovery, a significant reduction in unemployment, and an increased sense of security for all of us. As a business executive, the more time I spend trying to figure out if the economy is “in recovery”, the less time I have to focus on the critical questions above - and the more likely my business fails to grow regardless of what the economy does.
What are the critical questions you would add to my list?