I think some feel the signs of recovery are a little like Mark Twain’s quote, “Rumors of my death have been greatly exaggerated,” in that “rumors of the recovery have been greatly exaggerated.” It has been weird – lots of positive earnings reports, the market breaking 10,000, but consumer confidence falling. This may be because for the average person, it is still rough and scary out there.
But in the past couple weeks, I have been struck by a couple items which point to a deeper issue. The first was a letter to the editor of T&D, a magazine published by the American Society of Training & Development. The writer was basically disputing the trend data predicting a labor shortage due to retiring Boomers, mainly because all he could see day-to-day was people hanging on to their jobs for dear life. The second was a friend, the President of one of our partner companies, who said that most of his clients said they were planning on spending at the same level in 2010 as in 2009. Really? Your plan in a growth market is to spend as little as you did during the deepest recession in 60 years?! Hmmm…..
I am reminded of the 2005 Cornell University Study by Garrick Blalock, Vrinda Kadiya and Daniel H Simon that found that in the first 12 months after 9/11, anxiety about flying led to an increase in highway travel, and as a result, an estimated 1,250 adults died in traffic fatalities who otherwise wouldn’t have. The point is that when we are afraid, we lose our judgment – in this case, people opting for a less-safe mode of transportation.
I fear that we have been so affected (and programmed) by the 24 hour news cycle and the relentless reports of financial disaster, that many executives don’t see the recovery as it is beginning to happen. Those in the grip of fear will continue to make poor decisions, like opting to drive versus fly…..or failing to invest in your best people at a time you will need them the most.
Scott
I agree! There is a big difference in the outcome when a decision is made based on fear instead of some other factor (such as conservatism, customer requirements, trends, or compassion for others). Fear tends to drive short-term decisions that ultimately will not benefit the company or individuals (customers, employees) in the long-term.
ReplyDeleteLook at some of the major U.S. players, and you will see short-term, fear-based decisions that have resulted in slashing staff, products, and, ultimately, employee and customer satisfaction. I have a dear friend who works for one of the major airlines. He has told me that they have slashed so many front-line employees that one person is now doing the job of four. Services have been cut to the bare bone and most of their employee-empowerment programs have been removed in the interest of saving costs during the recession. He is more stressed than I have ever seen him before and feels that he cannot adequately serve customers because of this. Customers are fully aware of the decline in service and this has contributed to a more stressful experience for them. Is it a surprise that this airlines' customer and employee satisfaction scores are declining?
Consumers remember their experience and treatment regardless of whether there is a recession or not. This particular airline - and other companies that are responding in similar manners - is doing more damage to their brand and image than they will (potentially) be able make up for once consumer confidence rises.
The challenge of course, is to let go of the anxiety and look at the big long-term picture - organizations that do that will take great strides toward improving their profitability and consumer confidence.