In short, a lot of businesses have floated on the rising tide of prosperity. And to put it even more simply, what goes up must come down. And then come back up again. Eventually.
The good news is the "creative" part of creative destruction. The effects of the recession will be the cause of the recovery:
- labour costs are coming down
- capacity is reducing as uneconomic companies go out of business
- this means that survivors will be able, in time, to put up their prices and thereby recover profitability
- the consumer will take their hands out of their pockets, though they won't spend as freely as they did during the boom
- companies will come up with new ways to entice customers to spend by offering value appropriate to the their needs today
This is the most interesting thing I'm finding as I work with individual business owners. I get to interact directly with about 40 business owners every month, and the conversations I've been having this month are about finding new products, repackaging existing products, price fighting strategies, new brands for different segments, acquisition of struggling competitors - all big questions. And actually quite exciting.
It really is true that times of greatest change create the greatest opportunity, because yesterday's incumbent is today's straggler. When all the old assumptions no longer hold, the answer to the question "why not" is not what it used to be.
Even given the pressure that most of us are under, we can feel a growing sense of possibility and excitement about what might lie ahead. We may be innovating only because we have to, but who's to say that today's desperate measure won't become the mainstay of our future business?
Given that no one knows the future, it's as logical to be optimistic as it is to be pessimistic. In which case, choosing to be optimistic makes a lot more sense. Let's face it: the only wrong thing to do is to do nothing.
Dr Mike Ashby