What we had in the 30’s was a healthy society sitting on a sick economy. What we have now [in the 1990’s] is a sick society sitting on a healthy economy. – Peter Drucker
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What we have now is a sick society sitting on a sick economy. That is awfully negative, but I am simply saying what many feel. As we draw near the end of the first decade of the 21st century, the look-back is a little confronting. Even a partial list of corporate deaths and near-deaths is long and distinguished: Enron, Arthur Andersen, Tyco, WorldCom, Global Crossing, Lehman Brothers, Bear Stearns, Merrill Lynch, General Motors, Blockbuster, Wachovia, British Petroleum, Countrywide, Fannie Mae, Freddie Mac, and Toyota. Confidence in big business has fallen the past two decades from 26 percent to a current anemic 16 percent.
It is not just the corporate world. While the metrics are different, according to Gallup only 11 percent of us have a “great deal or quite a lot” of confidence in Congress, favorability ratings for political parties is at an all-time low, and high school graduation rates have fallen to around 70 percent. Only about 25 percent of us trust government to do the right thing – down from 42 percent 20 years ago and the lowest on record; 61 percent believe the country is in decline. Gallup reports the country is even more polarized in their view of the Presidency under Mr. Obama than the previous low record set by Mr. Bush.
The blunders, bailouts, and scandals in the public and private sector coupled with a struggling economy, tough credit markets, and stubbornly high unemployment make for difficult times. It can be overwhelmingly depressing, but actually there is hope and opportunity if we focus on three key points.
First, we are not alone in this. It has happened before and it is currently happening to others around the world. It is bigger than any of us and in a global economy it is bigger than any single country. Some countries are worse off than us (think Greece) and others are advancing out of this faster than we are (think Germany and China). This economic and political morass is a global phenomenon. While our forefathers’ situations were very different than ours, they overcame similarly grim circumstances like the Civil War, attacks by foreign armies, and financial depression. As a country this is not our first rodeo. We have withstood internal and external chaos and attack before. The key is not what happens to us but how we respond. Likewise for our companies, we have overcome hardship before and it usually made us stronger.
Second, unique struggle contains the seeds of unique opportunity. When we are up against it, we are forced to look at things differently, to try new things, and adjust to market and client needs that others have missed. In fact, many seasoned business leaders will tell you when the competition is hunkered down and the marketplace is hurting – is an especially opportune time to make business moves to build the brand, grow market share and differentiate yourself from competitors. Lemonade is made from lemons.
Third, the best context for viewing our current struggles is as a learning model. The key question in the midst of our current angst: what is the marketplace telling us about new or different opportunities today and what opportunities will surface as we work our way out of this? As bankers, how do you reframe your view of credit risk and credit worthiness, choosing and cultivating customers, or technology that works or doesn’t? Nothing is more relevant today than how a country or company responds to feedback. Do they seek it out? Do they learn from it? Do they change their ways by acting on it?
As a country we survived the Civil War and learned how to pull together and heal what had been deep and abiding divide. The Great Depression taught us important lessons about perseverance, regulation of financial services, the role of government, better agricultural practices and business advancement. World War II taught us about aviation, submarine warfare, advanced weapons, manufacturing, and women in the work force. The lessons of organizing, deploying, and transporting large armies and equipment were applied widely in the ensuing decades in businesses. While our government seems dysfunctional these days, it probably reflects an electorate that is also flailing about and at times lurching from one extreme to the next. If we will seek them, this unlovely process can carry us collectively to the next set of lessons and leaders for our advancement.
Likewise companies find themselves in a global economy with new and lower-cost competitors. We have great new technology that is also quickly in the hands of competitors all over the world. Yet in a global marketplace, many customers and employees have lost a sense of relationship and trust with their providers and employers. Given these realities, how will customers remember us during this difficult period, or will they remember us at all? What new needs and preferences will be defined in the next stage? What is to be learned during this difficult time that should inform our strategy, brand and execution going forward?
The key for the country and for our companies in the midst of the turmoil and fear, is to get the context and purpose right. It is learning. These difficult times can be a gift that helps us bridge to new and different opportunities at a time when those around us may miss it. These challenges can be the first step toward tomorrow’s success if we can grasp the learning embedded in our current challenges. Those who learn from this will prosper and thrive. Those who don’t, will disappear. The truth will set us free – but first it will make us miserable. Our job is to translate the misery into new learning and then diligent, hopeful action.
(Column appeared originally in ABA Bank Marketing magazine – November 2010)
By ROBERT E. HALL
Not to be reproduced without written permission. All rights reserved. © Copyright Robert E. Hall 2010
