Don’t Overreact! Avoid creating your own economic downturn

Are we doing all we can to weather a difficult economy? In previous articles, I’ve pointed out that some people fare better than others. A few of us are even defiant in our approach. I recently saw a lady wearing a button that read “I refuse to participate in the recession.” I guess that’s better than wearing one that says “I’ve lost the will to live!”

How to survive economic downturnMost of us are doing the best we can, but “the best we can” might not be good enough. We might need to do things better than we can, which means we have to look at how we think, examine what we believe and even get some help.

Do we hunker down, cut back all our expenses, let a few people go, watch the news and prepare for the world to end? Or do we increase our efforts, pinpoint our markets (which means targeting those who actually have money) and make sure our bosses, customers and employees can see our value?

The knee-jerk reaction is to adopt the first approach. The media makes it easy to buy into messages of desperation and doom – have you noticed CNN anchor Anderson Cooper’s really nice way of telling us there’s no hope? Seeing a 40-year-old with a head full of gray hair makes us feel like being overly worried is normal!

We need to avoid behavior that indicates we look at life through loser-colored glasses. That kind of behavior reveals a defeatist attitude that saps our productivity and affects the way other people value us. So beware of those doom-tinted lenses – the dismal view they offer can make even those who work in the public sector begin to question job stability: Are we going to get government money? Will even we have layoffs? Is the job I took because it had more security than the private sector still secure? Will we finally get rid of that employee who’s been here for forty years, smells like Doritos, does zero work and yet can’t be fired?

Unfortunately, sometimes we’re not even aware of our defeatist behaviors, even though they are obvious to those around us. Watch for these five signs that indicate ineffective plans to succeed in tough times:

  • You cry in front of your employees or coworkers with alcohol on your breath.
  • You fire the slightly overpaid “New Guy” for borrowing your lucky stapler (the red one you’ve had since 1992).
  • Your boss keeps uncharacteristically patting you on the back.
  • You’re concerned about how a slowdown in business will affect morale so you cancel the annual meeting in Las Vegas. (Nothing says “Be afraid! Be very afraid!” like canceling the one meeting people actually want to attend.)
  • You decide that keeping the office temperature at 88 degrees will save some money and weed out the wimps. (Our research shows that sweaty people are less productive and more likely to short out their keyboards.)

Let’s not miss the underlying point here: The “we’re doomed” view leeches the value right out of us. It erodes our ability to perform and to lead. It’s easy to spot and long remembered.

Practical Pointers for Surviving a Tough Economy
The better strategy for making it through a difficult economy is not so irrational or overreactive. It involves identifying what opportunities still exist rather than mourning last week’s losses or obsessing about calamities to come. As the value of everything around us recedes somewhat, we want to be the ones who stand apart because we’ve redoubled our efforts, identified opportunities and asserted our value.

I won’t tell you that you need to have positive attitude. Hope and faith certainly help, but they’re not enough to float you effortlessly through a shake-up. So, while a positive outlook is great to have – recommended, even – what we really need are realistic actions that make a difference. I’ve listed a few here.

Hang on to your most talented people.
Treat them well and make sure they know they are valued. Our interviews with top performers showed that many of them jumped ship in the past because, as business slowed down, management made them feel they weren’t important anymore. Some were even let go and then were begged to come back, usually to no avail.
Remember that even in a difficult job market your top people have options. They will leave if they feel unappreciated. The people who suck, however, are yours for life!
Keep things as normal as possible.
Don’t participate in activities that prove you don’t believe things will bounce back. Unless you have a small business with big cash-flow issues, look at yearly costs or longer-term costs. You might decide you have to reduce expenses, but be creative – take time to assess what’s really important. Discontinuing your marketing and sales efforts or sacrificing quality for greater profitability is a terrible idea with a bad track record. To move forward, you typically have to spend some money or inspire more effort from your employees. You don’t get anywhere if you simply tread water. (Let’s face it: Treading water really means controlled drowning.)  Research shows that the best way to influence people is to make them feel valued – important information for those who hope to get more effort from their workforce. Canceling meetings that employees really like or cutting out the best part of the meeting does not make much sense. Our research in this area shows that bad food and bad presenters make attendees think you don’t value them. They will put up with a lesser location and a mediocre hotel because it shows you are mindful of costs. But if you give them bad budget spaghetti and line up Crazy Jimmy from Marketing, who mistakenly believes he is both smart and funny, as the keynote speaker, the meeting attendees will think “Wow … do they just hate us?”

Think of it this way: If you are at home eating a bad TV dinner with arctic freezer burn when your cable goes out, leaving you stuck watching what appears to be a very fuzzy Fantasy Island rerun, it does not matter how comfortable your couch is, how realistic your artificial plants look, or how much your spouse tells you to get over it. You’ll still feel miserable.

Refrain from talking too much gloom and doom at the office.
One woman recently told me her boss instructed her department that they could discuss rough times at lunch but anyone caught going on and on about it in the office would be written up for dragging down morale. While that policy might have some freedom-of-speech implications, it does reinforce a sense of accountability: We are responsible for our own emotions, and we must look closely at the effect our emotions will have on others. If the words we utter won’t solve things or brighten things, why utter them again and again? It only opens us up to something I call implicit quicksand: When we believe we have the right to draw others into our personal pain, they naturally assume the right to draw us into theirs, and we all get sucked downward deeper and faster together (sounds like an episode of the TV show Lost).  Those of us who let bad news dominate our thoughts should remember that whatever we focus most of our attention on is what our life looks like. It’s like asking people in their eighties how they’re doing. Because they probably don’t work or spend much time anticipating the years ahead, the answer will likely involve a physical ailment.
Check the motivation of your sources
Don’t listen to the media or investment gurus about the state of the economy. The media makes no money with good news. If the news is really good, we just change the channel. And as I’ve stated in other e-news bulletins, their information is false. Despite media assertions that we live in a depressed, crime-ridden country, crime is down 37 percent since 1980, and we are not in a depression. A depression is when your non-FDIC bank loses your money forever, driving you and your flapper girlfriend to drown your sorrows at the local speakeasy. The worst crime sprees occurred in the early 1930s, when everybody hated banks so much that when you robbed one, people actually helped you escape.  In other words, what we’re experiencing now is a mere shadow of worse events in our history, not some new, uncharted course into a darker future than we’ve ever seen. History repeats itself only if we don’t create safeguards to prevent it – and we did. We might experience some new problems, just not the “Oops-the-bank-lost-all-your-money!” problem.

It’s equally important to remember that some investors tend to drive the stock market down with bad news because they hope to buy low and sell high. They are motivated to give the worst news possible. Don’t listen to those guys! When times are tough, listen to rich people in the twilight of their lives – they’ll be the most honest. Billionaire Warren Buffett doesn’t need your money, and he’s old enough not to care what the public thinks of what he says. (People over 70 tend to lose their filter, I’ve noticed.)

For example, last month on CNBC, Buffett said our economy had “fallen off a cliff” but then emphatically stated his conviction that “everything will be all right. We do have the greatest economic machine that man has ever created.” A few days before that, he wrote in his annual letter to shareholders that “our country has faced far worse travails in the past,” including a dozen or so panics and recessions in the 20th century and unemployment rates of up to 30% during the Great Depression.

“America has had no shortage of challenges. Without fail, however, we’ve overcome them,” he wrote. “Though the path has not been smooth, our economic system has worked extraordinarily well over time. It has unleashed human potential as no other system has, and it will continue to do so. America’s best days lie ahead.”

Tough economic times are just part of the journey we go through to get wherever we are going. We always say it’s the worst ever when we are in the middle of it, we are always glad when it’s over, and it always eventually is over! The key is not to take such drastic action that our solutions become worse than the problem we’re trying to solve. We want to avoid overreacting to the point of causing our own personal economic crises. Our reactions are what we have the most control over … although watching reality TV shows may cause us to question that.

We happen to be at that place in history where the economy got bad again. It does that every now and then. We usually have about five good years, five mediocre years and five tough years. There is a name for that – they call it life.

2 Responses to Don’t Overreact! Avoid creating your own economic downturn

  1. I wonder if there is any chance Corporations read your blog. If they don’t they should. I hope those who DO read it take this message to heart. It is time to be proactive and do MORE not pull back and do less, thereby making sure business declines!

  2. Peter Mathews says:

    I really enjoyed this article. Thank you for putting that part in about morale. I sent this article to a few fellow employees. It drives me nuts when they complain about everything. They wonder why I spend so much time in my office. I’ve also started a few things on the internet so that I can spend more time at home with my kids. One thing I’m doing well with is a business system that comes with all the software you need to get your business stared and keep it running. It’s pretty neat. freedombusinesssystem.com

    Again, great article!
    Peter

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