With great caution, we are seeing reports of “Australia avoiding a recession” with claims the worst has passed. And whilst I sincerely hope that is the case and no-one suffers further or unnecessary financial hardship, I do wonder if we as a nation have spent enough time considering just how we will compete and sustain our economy over the long term. Have we invested enough in understanding the global economic crisis? The reasons for the global crash and the questions it raises about our understanding and demands on the companies’ (or investments’) integrity, values and responsibilities that we invest in?
One beauty of financial uncertainty is that it forces us to think about what is important to us. It certainly forces us to review where our priorities and responsibilities lay. In business it brings clarity to what is the true means of competitive differentiation and how best to go-to-market. If your company’s survival is at stake, it forces you to define clearly where your markets are (or could be) and how sustainable they are. It allows you to explore different possibilities and opportunities. And it should be a time where you encourage and promote innovation and change within your organization and empower your team to help find the path to future growth and financial strength.
In the March quarter national accounts, it still showed domestic spending falling by one percent, the sharpest fall since December quarter 2000. We avoided a technical definition of a recession by a GDP expansion mostly due to imports contracting and exports remaining positive. “Overall, GDP growth was positive because imports contracted by an extraordinary seven per cent allowing net exports to contribute 2.2 percentage points to GDP growth and ensuring a positive result” stated Westpac’s chief economist Bill Evans.
Let’s not exhale the sigh of relief that the worst has passed us. Use this time to consider what you need to do to emerge stronger. How can you innovate and compete strongly in the global markets? What is your true means for sustainable competitive differentiation and how do you focus on those?
Back to integrity, values and responsibilities, what does this mean for your company and what (if any) are the lessons here? What should you avoid next time and what do you need to ensure you do next time? What measures need to be in place to help ensure you don’t forget those lessons?
And finally, as we consider the lessons in these times, how in finding your means for financial strength and security will you balance your desire for greater profits against your responsibilities to your employees and to the greater community moving forward?
What will your story of progression post recession (or near recession) be?
As Albert Einstein said “in the middle of difficulty lies opportunity”.