Contrary to better judgement, all the opposing evidence and an overdose of reading the tea leaves in the dregs of our economic cup that says we are in a W rather than a V economy (see 24 July 2009 Futurist blog), it is vital that smart companies get in early to find the new talent needed for the growth of their business.
Against the tide, the Futurist believes that smart companies are going to plan ahead to get ahead, while the procrastinators wait for their recovery ship to come in. As argued over the past few blogs, it is time to get the team into a half-time huddle, talk to key customers, shout the bank manager a beer and lay down an aggressive export marketing program based on hiring talented staff with a gift for languages and travel. Even if it is a W and not a V, it is certainly not going to be a long-term L shaped recovery for those SMEs that make it rather than just take what comes.
Associate editor of the Financial Times, Wolfgang Muenchau sums up my empirical perceptions, saying that optimism is not enough for a global recovery. Muenchau disagrees with PM Rudd’s anti-liberal mantra explanation of the GFC as being due to “soft” factors such as greed and bonus payments. He says that these played a role but cannot serve as an adequate explanation of why the crisis broke out when it did, since they had been present for many years.
Wolfgang sums up the current dangerous ‘wait and see’ approach of both sides of politics and many not-so-smart companies: “Instead of solving the problems to generate a recovery, the political strategies have consisted of waiting for the recovery to solve the problem. The Europeans are relying on the Americans to generate growth. The Americans are relying on the Chinese, who in turn are waiting for the rest of the world.
If we compare the graphs of consumer confidence provided by Gary Morgan and Bill Evans we find a very similar V pattern that suggests that consumers have decided that Kevin and Wayne have done the right thing and we are back on the “she’ll be right” path to economic stability, ie. we are back around the levels before the GFC became a convenient excuse for poor economic performance.
So against this evidence of rising retail consumption, what is the reason for continuing pessimism and concern that we may be headed for that W shaped economic pattern as we race towards a highly feasible ‘unwanted’ early election?
Firstly, the price of gold is still hovering around US$1,000 despite the fact its real value should be no higher the US$800 if the G20 Finance Minister’s economic stimulus package was already passed its use-by date.
Second, even the discount merchants are finding that sales may be up but profits are well down and even the up-market stores are cutting inventory as people are saving and cutting down on their credit card debts. Leading retailers report their last quarter sales fell up to 15%, dampening hopes of a sustainable recovery.
Third, employers are hanging on to their good staff by cutting back hours and asking employees to use up their annual leave credits as they find that their forward order book is heavily reliant on deals in the States as the soon to finish “cash for clunkers” scheme evaporates. And in Australia the domestic construction subsidies – homes and schools- also hit that use-by date without any sign of significant private sector investment. Gary Morgan and Michele Levine point out: “Today’s ABS figures (13.9% under utilisation rate) are a ‘giant leap’ forward for understanding the Australian labour market – it is time that Australia’s politicians started a real debate on how to find jobs for more than 1.6 million Australians looking for work or more work”.
So that is the rationale for my belief that smart companies are those that will act early, appropriately and against the tide of disbelief by having strong marketing plans, close relationships with their significant customers and a willingness to attract and retain quality team members who shape and share the vision for expansion as the recovery becomes a reality.
Dr Colin Benjamin
Entrepreneurship and Strategic Thinking Consultant
Marshall Place Associates offers a range of strategic thinking tools that open up a universe of new possibilities for individuals and organisations committed to applying the processes of innovation, creativity and entrepreneurship.
Email dr.colinbenjamin@marshallplace.com.au
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