Firstly, the speed at which it has struck. Most people in business have been looking over their shoulders with some anxiety for a month or two but I believe, when the analysis is done, it will be recorded that the recession started with a bang in August 2008. Suddenly, there has been a massive attack of battening down the hatches. Some of this activity is prudent and some of it is plain panic.
Nevertheless, as far as I am concerned the war has started and it will not be over for a least 18 months to two years. In other words this is it and there are going to be some significant losers alongside the winners. Of course, this is not always a bad thing, rather like the hurricane that battered South-East England in 1987, the immediate aftermath was one of devastation but in time a new world emerged free of the dead wood that did not survive the tempest. So it will be with businesses that get through the next couple of years.
The other significant difference between this recession and the last one is that of attitude. Then there was an enormous reluctance to scale down businesses and lifestyle because to do so advertised the adversity being felt. Savings and changes were resisted sometimes until it was too late. I don’t think this will happen this time and the consequences will be profound.
The difference now is that it is fashionable to downsize and quite possible to hide cutbacks behind the façade of environmental concerns such as carbon footprint. To leave the gas guzzler in the garage in preference for the bicycle is not a billboard screaming ‘in financial trouble’ but one of good social conscience.
No longer is it acceptable to be wasteful of resources or to demonstrate blatant consumerism. Indeed the more you recycle and make do and mend the more you are admired and praised. But what is the ripple effect of this attitude? Does it mean that by cutting back earlier one is increasing one’s chances of survival or does it mean that the savings are at someone else’s expense and simply fuels the recession.
In fact are we facing a dog eat dog scenario? Was it that, in previous times, the minority who did not scale back and ultimately bore the price by their actions actually helped stave off a similar fate happening to those who supplied them or worked for them?
As you expect I do not relish what lies ahead because of what I so vividly recall of the last time. However, there is a morbid curiosity in wondering how it is all going to work out. Certainly these difficult times favour the accountable and the transparent. Those that run businesses with a proposition that makes sense in difficult times with realistic pricing has the potential to do exceptionally well. The trick is making sure one’s own business fits this model, then fastening the chin strap and really going for it!
