Thursday, March 5

Owning Communication: Be Your Own Voice

While an increasing number of people are wondering if we are headed toward a depression, fear-mongering seemingly in fashion (the only good reporting comes on the front end with Sweden telling GM that their taxpayers will not fund them), and the deficit for this year expected to reach $1.7 trillion, it now seems everyone could use a little good news. You can find a little (but not all) good news in a recent report from global consulting firm Watson Wyatt.

According to the survey of 245 large U.S. employers conducted last week, 52 percent have made layoffs, up from 39 percent two months ago. However, the number of companies planning layoffs has fallen 10 percentage points from 23 percent to 13 percent. Fifty-six percent do, however, have a hiring freeze in effect, an increase from 47 percent in December’s survey.

“Companies have come to terms with the fact that this recession is going to last and that they can’t slash their way out of it,” said Laura Sejen, global director of strategic rewards consulting at Watson Wyatt. “Many companies are putting the drastic cuts behind them and are now focusing on smaller, more sustainable cost-cutting actions.”

So, the little bit of good news seems to be that fewer companies are willing to apply leeches to cure their ailments. Now, if only these same leaders could clear their heads long enough to believe they can manage the destiny of their companies. Considering just less than 10 percent of those surveyed believe that we have already hit bottom, not enough do.

In fact, according to the same report, 38 percent believe the economy won't hit bottom until late 2009, and 28 percent believe that the recession will likely last through 2010 ... and beyond. If these company leaders are not careful, they will talk themselves right into the worst case scenarios when what they really need to do is hit the lead key.

If they don't hit the lead key, then they perpetuate the problem. As it stands right now, some polls show that 37 percent of all Americans, nearly 50 percent of Democrats, believe the nation is already in a depression. If that number hits 50 percent of the total population, then the public will unknowingly create a self-fulfilling prophecy.

Some Fresh Facts In The Dour Economy.

• The University of Virginia showed the trouble is mostly focused on four states — California, Florida, Arizona and Nevada — where home prices were the most overheated in the US housing boom. That implies that the housing crisis is overstated. Locally, in Nevada, the market is already showing movement and stabilizing despite what economists are saying about data that is more than two months old.

• After the fiasco faced by Northern Trust, expect more banks to come forward to proclaim they did not need the TARP money. The government ASKED healthy banks to accept the money because they wanted to shield true bailout banks from being singled out, because many banks are paying as much as 5 percent interest on that money, and because good banks accepting TARP helped protect the taxpayer-subsidized funds (hedging against the government funding only losers). The banking crisis may be overstated.

• The crisis on Wall Street seems to be lock step with every time the federal government proposes a new plan. Even when President Obama, who usually carries a message of darker days ahead, encouraged investing, the stock market sank further. It will likely continue as long as regulation and "strings" are part of the package. Several states are even expected to reject stimulus money outright, citing that the money either creates future fiscal problems or that some funding encourages money where it is not needed or critical.

Tactics To Employ As Individuals.

While there are some economic constraints, the real rub is twofold: a lack of leadership, especially from companies that only perform well in ideal conditions; and consumer confidence, which is unfortunately hinged on public and private leadership. It seems to be becoming increasingly obvious that individuals might look to themselves, rather than people outside their homes, for leadership.

• Capitalize on “individual action.” Focus on what you can manage at home, rather than the state of the global economy. The state of the economy is less important to an individual than their place in that economy.

• Establish a clear direction. Know as much as you can about your household's situation, specifically how a two income household might consider what would it take to operate as a one income household. Some people are surprised to learn that in a worst case scenario, they can still pay all their expenses. Knowing this will likely give you peace of mind.

• Cut expenses that appear to be fixed. Expenses such as electric, gas, cable, etc. that appear to be fixed, are not. You can manage all of these expenses, reallocating these funds for social activities, which you need to remain positive.

• Engage your community. Choosing to be active in your community will empower you. It gets you out of the house, provides social engagement, and reinforces how much of a difference you really can make.

• Be honest with yourself and family. The number one communication breakdown in families, much like companies, is a lack of communication about unknowns. Be authentic, even if it means talking about things just to put worries aside.

• Put passion into your job. Focus on satisfying customers over internal challenges or lackluster leadership. The worst case scenario is that you will position yourself for advancement when the economy turns around. Of course, if your company is too dour, look for a new company where your employer will be in the 10 percent minority that knows how to navigate any financial waters. There are some companies out there that are growing more than bemoaning the economy. I know because our client roster includes several.

• Plan your next adventure. Who cares if you don't want to take a trip now. Start planning a trip or some other distraction, even if you do not have a date to make it real. People always perform better when they have something to look forward to.

Much like companies, individuals are better off when they focus on "what is" and "what's possible" as opposed to "what if worries." So, what I'm really suggesting here is that if your employer cannot communicate the level of leadership you need, then consider looking to yourself to provide it.


indefatigable on 3/6/09, 12:43 AM said...

You have got great research on companies and their economic structures. I am glad to find you and will keep following your new posts.


Rich on 3/6/09, 8:38 AM said...

Hey Avadhoot,

Thanks so much. We're very interested in how communication is shaping the economic crisis.

While I generally skew toward communication, some economic data keeps surfacing that apparently goes under reported. It makes me wonder, are people helping to create the economic downturn?

It's certainly a contributing factor.

Thanks for the comment.

All my best,

Anonymous said...

Good advice in a well-observed post. Thanks. There is undoubtedly great opportunity in times of recession for those of us who can survive ... well, unless our politicians take decisions that catapult us back to the stone-age ...


Debby on 3/7/09, 8:36 AM said...

As usual your post is informative and provides constructive means to cope with our world today. Most media is just wallowing but I do see a few places that are focusing on how to navigate now. We would be in a much better place if that was the norm.

Rich on 3/7/09, 11:39 AM said...

@OTM My theory is pretty sound. Find the opportunities because if the government knocks to the stone age, then we're all living in tents anyway. :)

@Debby Thank you. I'm becoming more and more disinterested in watching our country talk ourselves into the bad. When the economy is good, bad, or indifferent, the cow still needs to be milked.

All my best,


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