Business Insight Zone

More to the point, what if some of the foundations of our economy — the American one and the bigger global one — have cracked?

(Stick with me here — my point isn’t to sink you into a state of despair.)

A little while back, I talked at length about a Boston Consulting Group report that showed just how underprepared many businesses were for the onset of the current downturn. The report suggested that, as of this spring, many companies still weren’t dealing adequately with the implications of the downturn.

Since then, I’ve read a lot of daily headlines that suggest just how much the world economy is being whipsawed. In a single week, you can look at a jumble of good, bad, and indifferent trends in consumer sentiment, manufacturing numbers, new home sales, existing home sales, foreclosures, the price of oil, consumer prices, et cetera ad nauseam — and come away none the wiser about where the economy is headed.

Meanwhile, I’ve also read a fair number of sobering analyses that convince me that we should at least entertain the possibility of a long haul of slower growth, tighter financing, and, in general, a departure from the easy-money days of the past couple of decades. A sampler of those analyses:

• bizzXceleration blog — The Vast, Ignored Difference: Economic Bottoming vs Recovery
• Christopher S. Penn — The eye of the storm
• Floyd Norris of the NYT — Feeling Good? Read This
• Knowledge@Wharton — Economic Recovery: Are Happy Days Here Again?
• WSJ MarketBeat blog — Ambivalence in Bond-Land

Please keep in mind that I’m an optimist at heart. I think it’s quite possible — and likely necessary – that we take a hard look at all these unpleasant analyses and think through how we’re going to succeed in business anyway. The major alternatives to that approach would be (a) to ignore reality, which is always a bad idea, or (b) to give up, which I certainly won’t do.

Without giving away any secrets, and without wanting to sound too much like an advertisement, I can tell you that current market conditions have sharpened our own thinking here at Hoover’s. We offer great information and great tools that help businesspeople get their jobs done quicker and better. That’s a winning proposition in a down market. And more than ever, we’re enabling our users to access what we offer in the midst of their daily workflow, whether that means coming to our own site, tapping in through their own CRM, or using our information as it’s folded into the offerings of our partners.

Beyond that, I can tell you that we’ve honed our plans and dialed up the intensity of our efforts across the board, all without predicting — or needing — any huge rebound in the economy. In other words, while we share guarded optimism about the direction of the economy, we’re also prepared to succeed even if things don’t get better anytime soon.

I take the time to say all of this because I keep hearing some folks in the business world talking about how things must be getting better by now, or how the bad news is over-reported, or how things will be better for their business “now that the economy is picking up.” I think that’s a horrible way of looking at things, because it violates the key tenet of the Stockdale Paradox that you must face the bad news — or the possibility of bad news — head-on.

By all means, believe that things will get better at some point. I bet they will. By all means, hope that the recovery comes sooner than later. I do. But be prepared to succeed even if that point is a long way off.

Equip yourself appropriately.

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Related:

• Beware “unexpected”!
• Readings: “Collateral Damage”
• The big economy and your economy.
• David Granger on “The Best of Times” currently underway.
• Back to the ethic of the farm?
• What if the economy is worse than you think?

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Photo by Phillip Capper, used under a Creative Commons license.

Category: Economics, Hoover's