Business Insight Zone

Who ya gonna believe?

You could be forgiven for experiencing whiplash from the latest economic headlines:

• Bernanke Says Economy May Slip Into Recession
• IMF cuts forecasts for U.S., global economies
• Wall Street Shows Optimism That Crisis Is Fading

Check that last headline again: Just when you think you’re getting a grip on how badly the economy’s doing, something — a good day on Wall Street, a favorable economic indicator, etc. — gets people wondering whether things aren’t quite that bad. It’s hard to know what to think about where the economy’s headed. But clearly . . . it ain’t that good.

Especially since I’m a business-news junkie, I have to be careful not to spend too much time reading the economic tea leaves. And given my interest in 20th century history, it would be fascinating to spend all day deciding whether I agree with the IMF that the current financial crisis is the worst since the Great Depression.

Ignore the forecasts; stick to the knitting instead.

But who cares? Sure, economists do, and regulators should. Talk about the chances of a recession with your friends over dinner, if it interests you. Button up your portfolios, if you haven’t already. (Although it’s a wee bit late, by this point.) But you know what? It’s not worth that much worry — not for most people.

I submit that most of us are better off more or less ignoring macroeconomic data as it applies to us personally. Sure, think about what it means in terms of your company’s strategic and tactical approaches. Lean times call for different measures — both offensive and defensive — according to what business you’re in, and according to what business function you perform. But does it genuinely matter to the marketers and product managers sitting around me here at Hoover’s World HQ whether we’re technically in a recession or not? No. It’s enough to know the basic trajectory and how it affects our customers.

And it’s still more important to serve customers well and to act on their feedback. I know I’m not telling you anything you don’t already know, but given the flood of financial reporting that threatens to drown us, it bears repeating: the macro-economy is usually nowhere near as important to your career as the quality of your relationships with your customers and the quality of your business execution from day to day.

Execute, execute, execute.

I’m in the same camp as Tom Peters when he says that getting your strategy right is a really important first 2% of business . . . but that the “other 98%” of execution is much more important, because that’s where your business actually stands or falls.

Great businesses have been started in every sort of economic weather. Somewhere, there’s an entrepreneur who’s starting a business that will be very successful despite current business conditions, or maybe even because of current business conditions. Heck, I have a buddy in Northern California whose real-estate business is expanding rapidly right now. He has more work than he can keep up with, even in one of the toughest geographic markets — and toughest periods — the real-estate business has ever faced. And what does my buddy do every day? Focuses on his business. Executes the details.

What YOU do to your business is more important than what the economy does.

My advice: Keep an eye on those storm clouds. Glance over those economic headlines. Batten down your financial hatches as necessary.

But then pull on a poncho and get to work.

~

Previously in this vein:

• Landscape and weather in the business world.

~

UPDATE, Thursday morning: Wordpress isn’t cooperating with me, so I’ll add here the comment I tried to add in response to dblwyo’s comment below:

Hi, Dave – Great to hear from you.

I don’t disagree with your point. Yes, folks need to be aware of what’s going on in their own industry and in the economy at large. For that matter, they need to understand the “weather” that’s affecting their company and their role within that company, since the two could easily diverge.

But I guess what I’m reacting to is the nonstop stream of media coverage that hyperventilates a la “Recession! Depression!! Meltdown!!!” or “Actually, an Obscure Indicator that Doesn’t Affect You Suggests It Might NOT Be a Recession”.

The trends we’re facing now in the economy have been building for a long time, as you rightly point out. NONE of this should come as a surprise. Okay, possible Bear Stearns folks weren’t AS aware as they should have been about the company’s periolous state, but we’re also talking about maybe the worst meltdown ever experienced by a major financial house in this country.

And again, many people will *worry* about this as they worry about rejiggering their personal stock portfolio from day to day, when in fact they would be better served to keep the economic weather and the state of the stock market in their peripheral vision, but to FOCUS on their own work.

Executing well in your own function, in other words, often covers a multitude of failings in macro-conditions.

~

(Photo by iowa_spirit_walker.)

Category: Economics, Management