It’s December already. Time to close out the year that’s soon to be behind us and look to the year ahead.
For me, the end of this particular year has been particularly nostalgic. As I was clearing cobwebbed path in my garage that leads to the holiday decor, I came across a script I had written many years ago. I was working at Egghead Software at the time. To get the troops energized for the busy holiday season, I proposed that we do a play for the holiday party. Not content with a small skit, I offered up a full-blown, three-act production called “A Dickens of a Christmas.” It was, as you can readily guess, a sendup of Dicken’s A Christmas Carol and it starred the entire senior management team.
Like any retailer, the holiday season was always a make or break for the retailer. By 1993, it had almost become do or die for Egghead. Somewhat prophetically, I wrote a Ghost of Christmas Future scene where the company’s mascot, Professor Egghead, was standing under a streetlight holding a sign that read: “Will trade software for food.”
The industry was changing. The Dot Com Boom was about to become a Bust, which triggered a recession a few years later. To its credit, Egghead had been experimenting with the idea of electronic delivery of software and digital licensing at the time, innovations that decades later would become commonplace. If only they had invested more heavily in these new ideas instead of cutting corners trying to save a nickel here and a dime there.
In uncertain economies, it’s tempting to pull a Scrooge and become miserly in your business strategy. When the bull turns to a bear on Wall Street, holding back on new investments, new hires and bold expansions seems wise. But is it really?
In some ways, all this “sky is falling” bluster becomes a self-fulfilling prophecy. Holding back on spending creates a trickle-down effect that robs vendors of new orders for equipment and supplies, strains your operations with artificial scarcity of resources and staff, lowers financial outlooks, reduces the GDP, increases unemployment, and finally, helps fuel the recession you were worrying about in the first place.
Yes, it’s important to have cash reserves and to be fiscally responsible. But sitting in your office counting all the money you’ve saved while your suppliers and employees are forced to be Bob Cratchit – scraping by and making due on scraps – isn’t necessarily the smartest course either.
I know. I started my business in 1994, just as the Dot Com Bubble burst. I was actually a victim of Egghead’s downfall, being outplaced in the first of what was to become many cost-cutting death throes before the inevitable but all too predictable fire sale.
I still remember the day they brought me in to give me the old heave-ho. At some point I leaned over to the VP of Human Resources and said, “Pretty good casting in my play, eh Jim?” The guy laying me off was our Grim Reaperish Ghost of Egghead’s Future.
Right now, the economy is still chugging right along, but there are a few storm clouds on the horizon. There is the uncertainty in Europe’s economy, unsettled trade wars with once-friendly nations, a downturn in manufacturing, impeachment proceedings and less foreign investment in the U.S. economy.
It’s easy to justify pulling back on the reins when you’re surrounded by such uncertainty. Put off the purchase of the new delivery truck “temporarily.” Postpone introduction of that new product you’ve been working on for the last two years. Leave open positions unfilled, hoping your existing staff can pick up the slack. And hold on jealously to every George Washington until the poor guy almost chokes.
Truly great companies (and by association, truly great CEOs) continue to take risks in these seminal moments. Calculated risks, true. But risks just the same. If uncertain times are indeed on the horizon, think about acting instead of reacting. Remember, your competitors are probably rethinking their plans too. They may be circling the wagons right this very minute.
This is the time to strike, not retreat. As Sun Tzu says in The Art of War, “Let your plans be dark and impenetrable as night, and when you move, fall like a thunderbolt.”
Let your competitors be lulled into thinking you are just as concerned about the marketplace as they are. Make plans quietly, consider new opportunities that may arise in the coming years, energize your workers, get everyone on the same page, tighten your belt here and there if you must, and then strike like a thunderbolt.
In the same year my company was founded, another company took shape. They had the crazy idea that people would shop online. The company? Cadabra. This was back in the day when you had to put an AOL or CompuServe disk into your computer and dial into the Internet with your landline phone (remember those). Very few people even knew what the World Wide Web was, let alone that you could shop on it.
Cadabra changed everything, including their name. Today the company is known as Amazon. I don’t have to tell you how that roll of the dice turned out.
For my own small business, the recession turned out to be a godsend. As bigger companies reduced costs, they increasingly contracted out their communication projects. I was more than willing to take up the slack. Large agencies were cutting expenses and corners too, so my nimble little creative agency was more than happy to fill the void.
How we respond to uncertain economic times is what separates the true entrepreneurs from the wannabes. The truly great advance while the weak winnow.
As our dear friend Sun Tzu once said, “In the midst of chaos, there is also opportunity.”
Add in a few ghosts and I think Scrooge would have to agree.
In the Emerald City, having a Dickens of a time with The Art of War,