As painful as this current economic climate is, we really need to start looking ahead to the positive changes that times like these can bring in the long-term when we recover. Recessions normally occur when many years of bad habits culminate, where certain things were progressing down the wrong track and, finally, the bottom fell out of the market and woke us all up. And, this time, the wake up call is a very loud one.
To correct our future, we need to focus on where our future is going to be molded - our young talent.
So how could this play out?
Career expectations will be re-set. I’ve had this conversation with several people across both the US and Europe in recent weeks: one common theme has been about career expectations of our younger talent. I recall graduating from college in 1994 and there were very few “exciting” jobs available for graduates - you took what you could get, and built your experiences. If you ever get me out for a beer, I may share a few of mine...
These days, most of our graduates seem to want to bypass the first couple of rungs of the ladder, not satisfied to get some ground-up experience before making the big dollars. Graduates in China, India, Philippines and Romania don’t seem to mind taking on some grunt work to learn the ropes. It’s not that we’re mismanaging our young talent, we’ve just created an unrealistic environment that breeds unrealistic expectations. You can even buy advanced software today with algorithms to predict when your key staff may quit, but how about doing something about why they may want to quit in the first place?
The globally-integrated economy will emerge stronger. Meanwhile, the eagerness of developing economies to get a taste of the good life has crept up on us – as we discussed here. Unfortunately, for developing nations, their fortunes are very much tied to ours, and are catching the germs from Wall St. But it wasn’t only Wall St, at the center of this crisis, it was the culmination of years of fat-living and overheated expectations. I take heart in the fact we’re all in this together this time – in past recessions, investors would divert funds into new areas of growth, such as the BRIC countries, however, this time the new growth opportunities are being centered on areas such as transforming flagging industries, investing in new sources of renewable energy, in education and research and revamping broken healthcare systems. It’s going to be painful as the demand isn’t there yet, but I cling to the hope that astute stimulus packages will eventually grease these rusty wheels. This time, the governments have become the new investors, not the private equity firms looking for a quick buck.
We now live in a much more integrated global economy, and this crisis is forcing our finance leaders to put their heads together to correct these flaws in our system. With the massive advances we have experienced in global technology delivery, mobility and the Internet, global supply chains, and the availability of global talent, there is an incredible globally-integrated economy waiting to pick itself up. The speed with which the global economy reacts to situations gives me hope that we may be able to recover quickly, once we have found our equilibrium.
Let’s think about the younger generations. When we look back at this episode in the not-too-distant future, I hope we view this crisis as the jolt we needed to re-set expectations, take advantage of the tools at our disposal to create an economic environment that is sustainablee, that doesn’t wreck the environment, that doesn’t breed too much greed, where people can get up for work in the morning with a smile on their face.
I generally feel a sense of guilt when I think of the generation entering the workforce over the next decade. They will be be paying our debts when many of us will be retired. So what if our houses are worth 20% less that they were a year or two ago? Everything else is worth less too. And – heaven forbid - first-time buyers might actually able to buy a property again.
We’ve been talking about this recession for well over a year now, but I sense only now are we really addressing the fundamental issues, after the world nearly went bust. All-in-all, the business world has changed beyond all recognition in barely more than a decade, and the only way forward for our businesses and our career paths, is to grasp how the world has changed, accept the new realities we live in, and carve out fresh plans for growth with fresh expectations. And to coin an old phrase – sometimes a step back is needed before taking two forward.