2nd Recession Opportunity

How to overcome the (new) coming recession

With all the noises in the media about the  end of this recession, it’s tempting to think that we are getting back to normal. The light at the end of the tunnel – we’d like to convince ourselves that it is indeed there. While it is natural to hope that a nice and juicy steak awaits us at the end of what has been a bread-and-water period for most businesses, the reality is more sobering. Not only is the recession not over yet, the recovery too comes with its own set of challenges for the economy.

While the scale of the current recession seems unique and frightening, previous recessions do have something to teach us. Contrary to popular perception, Roosevelt’s New Deal did not instantly solve the problems created by the Great Depression. As data from the 1930s shows, recovery was slow and peaked only with the onset of WWII and the increased demand created by it.

As a result, it would seem imprudent to bet your business’ future on the hope of a powerful economic resurgence. It will likely be a later, lower, and slower trajectory than we would hope. Rather than waiting for the market to “return”, the companies that are successful during this time will actively transform the downturn into an “upportunity”. And even when the recession fades, the “new normal” will differ from the ‘good old normal’.

At the bottom, the only way is up

If the economy is going to continue its roller-coaster act, there is no point in wishing for a more even ride. Instead, the only solution is to accept that we are going to be thrown around and recharge ourselves to meet the challenge. That means recharging our internal structures so that teams are poised to identify and grab opportunities. It means re-looking our policies so that employees are empowered to truly innovate, rather than just going through the motions of their jobs. It means being consumer-centric in thought and action so that ‘consumer need’ is not just something to fill up the spaces in the mission statement.

What if the window of opportunity is slammed shut in your face?

If an external crisis is indeed an opportunity to rejuvenate the business, why isn’t every company running for the chance? The truth is that change is always harder to implement than it looks, and nobody wants to change unless they have to. We say that “necessity is the mother of invention”, but she’s also the mother of “implementation”!

There are many instances of businesses that lost great opportunities, simply because there wasn’t a pressing need to change. In 2000, Tony Fadell pitched an idea to RealNetworks, which was doing very well selling various media products online at the time. What was his big idea? A nifty little music player that could also link to music-serving media online. RealNetworks was not interested because they didn’t see why they should invest in a personal music player when their online business was already doing well. By now, you must have realized that this product was the iPod. Tony Fadell contacted Apple which agreed to fund the research and development for the product that eventually changed the way we listen to music today.

Don’t be too harsh on RealNetworks though – mostly, things don’t get done in an organization unless they HAVE TO get done! DeBeers, the diamond marketing company that once controlled 90% of the world’s diamond market, is one company that dramatically changed the way it worked, spurred by events beyond its control – the downturn after the Great Depression. In the 1930s, the company realized that consumers were simply not buying diamonds. Until then, DeBeers was purely a trading company that sold uncut diamonds to wholesalers and retailers. When these middlemen stopped buying diamonds, DeBeers decided that it would have to change the rules of the game rather than just wait for the market to revive. From a trading company, DeBeers became a consumer marketing company that spoke directly and passionately to end consumers about the value of a diamond. Not only did diamond sales pick up, but the company immortalized the ‘Diamonds are Forever’ theme and made diamonds an absolute essential for any couple to be married.

A downturn or a launchpad?

The pressure of the downturn is the perfect way to make change happen in your firm — if you have a catalyst to help guide it and make it happen. As the perception of external threat wanes, the opportunity for change – lasting, meaningful change – will wane at your company, because people think that it’s all going to be ok. Don’t wait for the window of opportunity to be slammed shut in your face.

If you want to act quickly to find and keep that window of opportunity wide open, you will need to harness the urgency of the recession to orchestrate action. An outside catalyst can be helpful in getting people to see and think about things in new ways. It’s also helpful to create an event and timeline around implementing change. Otherwise, we will just suffer through the recession without reaping any positive benefit.

If you want to act quickly to find and keep that window of opportunity wide open, contact Insighting Ideas to learn more about our “Repossibility” planning session that can help you and your team uncover new opportunities and cater to them.