Its not as if the senior managers of today had no experience at all with handling tough timesthe dotcom bust, the WTC terror attacks, and other crises are less than a decade old. What is special about 2008 was the intensity and frequency of bad news that kept pouring in, leading to a rather sudden change of mood from optimism, to caution to mostly pessimism. Each event of the month, whether global or local, started delivering more and more pain. As GDP growth projections got revised downwards on a regular basis, new records in inflation, fuel prices, IIP, interest rate, factory output were created. Famous quotes such as its gonna get worse before it gets better were generated and got repeated several times. Even the bravest of us started getting jittery.
A holiday to practicality
The funny thing about unusually challenging times is that decisions not considered all right in the past suddenly sound legitimate. While all of us have heard of the phrase self fulfilling prophecy, somehow, individually we dont feel we ever contribute to something like that. So avoiding risk, maintaining status quo, got branded as practical. Its almost as if people were creating quotable quotes first and then adjusting their own behaviour to suit those quotes. The same marketers who wanted consumers not to cut spending, cut spending themselves to save for a better day. Financial services, airlines, realty and auto marketers, got hit for obvious reasons and started conserving marketing investments. Some, allegedly, cut their budgets below 2007 levels, although I am not sure how much of that is true. Many companies delayed planned brand launches, or expansion initiatives.
Two time-tested and dangerous fallaciesthe Fallacy of Composition and the Fallacy of Hasty Generalisationwere used repeatedly by managers to explain their irrational behaviour away as rational. Instead of understanding and predicting how consumers are likely to respond, many of us pre-judged consumer behaviour on the basis of insufficient evidence and applied a convenient version of what to do in tough times learnt from western business and economic history. Cutting training and developmental spending, freezing recruitments, not making bonus payments, all sounded like perfect slowdown management tactics.
What do you do inside a tunnel
A tunnel is a funny thing. In life, there is no road sign telling us how long the tunnel goes. Some tunnels are dark, some may be a bit bumpy. Sometimes you hear water streaming down the walls. When you honk inside a tunnel, the sound of your horn gets amplified and it appears someone else honked. All those things are scary, but all real. I have never met anyone who has ever come out of tunnel by freezing up inside. Stopping inside a dark tunnel not only delays you, it may actually mean the car behind you may hit you. I believe we are inside a tunnel. We dont know how long it will take to come out. We dont know how bumpy it gets ahead for us. Its a bit dark already, but we still dont know how much darker it will get. Naturally, we are afraid and feel like freezing up every now and then. Once in a while, we get this thing flashing in our mind that says I should have seen it coming, I should have been more prepared. We feel disappointed in ourselves. We have company around to seek help from, to take courage from, but to most parts, we are on our own.
This too shall pass
Hope and conviction is what gets us moving inside the tunnel. We need to keep driving. Carefully, yes. But we need to keep driving. Its easy to blame the banks, mortgage financiers, traders and their greed and over leveraging behaviour. Or our Government for not keeping us safe from the terrorists. Its not difficult to blame hyper-competitive markets, and fraudsters for many of our woes. I am sure each of these contributed to our suffering. But these are all real, blaming will not help.
Sure, there was no road sign telling us about the tunnel ahead, but even that would not have changed the existence of the tunnel. On the other side of the tunnel, the highway continues and there is sunshine. Once we are out, we will pick up speed again. That seems like a practical thing to do in 2009.
The author is CEO, South East & South Asia, Starcom Media Vest Group