What the Great Recession Can Teach Us About the COVID-19 Crisis
Stay away from negative people – they have a problem for every solution!Albert Einstein
Everything right now is about the COVID-19 crisis. And I do mean everything! It’s an echo from the Great Recession. But the two are not the same.
What we’re looking at right now is a 3-to-6-month situation. Three months of lockdown and then four to six months to return to ‘normal.’ What that normal looks like is what we don’t know.
We will see changes in behaviour, that much’s for sure. Most international scholars estimate that +80% business will find back to a new normal within this timeframe. Hopefully, this new normal will have much more respect for sustainability and an organic growth perspective.
And just FYI, the arguments in this blog post are based on an international study made in 2010; a study I participated in collecting data through interviews.
Psst … need help getting your business through the crisis? We can help. Schedule your consultation right here.
How the two crises are different
When comparing the current situation with what we went through during the Great Recession, it’s crucial that we keep in mind how the situations are different.
Back in 2008, the general financial situation was no way near as solid as it is today. No one could predict how long the devastating situation was going to last.
Governments did not respond or offer support as quickly as what we already experience today in some countries.
Gaining market shares will never be cheaper!
One thing the two crises how in common is how businesses behave. Now as then, business has become paralysed and consumer behaviour has changed overnight.
Another similarity is in management behaviour. A key reason for this is that we have younger CEOs; people who were not part of senior management ten years ago.
Many CEOs simply dropped off the map due to lack of stewardship, lack of determination, lack of creativity, and poor people management.
From a business perspective, what they all failed to note back then was how cheap it was to obtain new markets shares.
Why? Because they spend all day, every day, explaining the figures, using the same excuse over and over. (But as a CEO or chairman, you’re actually not allowed to use the same excuse more than once!)
10 lessons from the Great Recession
During the Great Recession, management across businesses made the same mistakes. Here’s what we can learn from those mistakes to get through the current crisis:
#1: Forget about numbers (for now)
You need to acknowledge zero-sum expectations for three months at the time. With no financial expectations, leadership can focus on other important matters.
#2: Make the tough decisions
You need to be tough when it comes to cancellations and cutbacks. Don’t ‘expect’ better times around the corner.
#3: Be clear
Many businesses during the last recession were too soft and not daring to discontinue the people necessary. Leaving staff not knowing whether they were in or out.
#4: Trust your team
If there ever was a time to believe in staff being able to come up with solutions to the challenge, it’s now.
#5: No excuses
Don’t hide behind the same excuse (‘due to the recession’, and so on).
#6: Know your (true) edge
Your true competitive edge has nothing to do with your product or your brand, it’s got everything to do with your relationship and employees.
#7: Learn what to improve
Establish protocols for future crises (because it won’t be the last).
#8: Break out of the silos
Set up task forces to prepare to take market shares. Allow your team to do anything remotely strategic or tactical.
#9: Don’t just save yourself
Senior management shouldn’t think about how to keep their own job; they lose all ability to focus and uphold stewardship.
#10: Hire right!
Everybody that hired consultancy support during the Great Recession hired the wrong support.
Key takeaways of this post
If you go upstream, do the unexpected, you might very well become the category leader of tomorrow. Those that did during the Great Recession were mostly smaller companies, focusing on relationship and service.
Make sure that your company has a pulse. Make sure that you’re stronger than ever online. But think wisely on how you present yourself!
If you need our help getting your business through the crisis, we can help you. Learn more about what we can do and schedule a consultation here.
And please, don’t (only) tell the world that you are following the COVID-19 rules and regulations. That goes without saying. It’s just like saying you don’t really have anything to offer right now.