Wednesday, May 13, 2009

Talking Ourselves Up and Down

In almost every conversation we have these days we’re asked, “What are you seeing?” They mean, of course, “Are you noticing any positive economic signs?” It’s not so much what we’re seeing but rather what we’re hearing that gives us some hope.

For nearly eighteen months we have, in part, talked ourselves deep into recession; clinging to the words of the nation’s anchormen and news editors and economic pundits and politicians and select business leaders. That’s not to imply that our economic troubles haven’t been real. Just that the reality of those troubles is always hyped by others with a vested-interest and exacerbated by our anxiety about them.

Talking it Up

Now, we may be talking ourselves back-around. What we are hearing now is:
• “Fed chief: Recession may end this year,” May 6 headline on front page of USA Today, Money Section.
• “Metro restaurants’ business a bit better,” May 7 headline on front page of Atlanta Journal Constitution Business Section (Note: Stephen Boyd of Luckyfish quipped about this, “Yeah, that’s because alcohol sales at the bar are way up.”
• “U.S. sheds fewest jobs in 6 months,” May 8 headline from Reuters news service
• "We are, as far as growth is concerned, around the inflection point in the cycle," European Central Bank President Jean-Claude Trichet, May 11, 2009
• “World Regains Taste for Risk Investors are aggressively returning to developing-world markets, driving stocks up 50% since the beginning of March,” Wall Street Journal Headline May 11, 2009
• Reports last week indicated of eleven retailers reporting April sales for stores open at least one year, 60-percent are doing better than Wall Street had hoped.
• “Nation ready to be lied to again about the economy,” recent headline from The Onion… (OK, this one’s just kidding folks)
• “In April we had one of the best months we’ve ever had,” Michael Kogon, CEO of the internet development and marketing firm, Definition 6.
• “Two new deals starting, so things are getting busier,” a professional with a private equity transaction advisory group e-mailed last week.
• Smaller, locally-focused, specialty firms that can deliver superior service at competitive rates are “in” and doing increasingly well. (Note: Billy Ching of the law firm Nelson Mullins commented, “Cost consciousness is the new sexy.”
• Scott Kriscovich of TrueBridge Consulting voiced the mantra, “Flat is the new Growth” but despite the economy, Scott’s business has been on a growth rampage with not “flat” in sight.
• "Many of my clients are starting to spend money on research and planning to ensure they are in good shape for the upturn they feel is coming," says Andy Abend of M is for Marketing.
• "I'm seeing positive turnaround signs everywhere, from increasing technology budgets to overall culture shifts. We're getting closer . . .," Mark Butler of IT services firm, Zertia, told us.

The Glass Not Yet Half Full

On the other hand…we’ve still got plenty of skeptics and it’s hard to say their viewpoint isn’t well founded.
• “CEO's who were once prospects are now contacting me to help them network to find new opportunities,” one of our human resource consulting friends told us the other day.
• “In its latest letter to investors, Elliott Management, a hedge fund run by Paul Singer that specializes in distressed investments, warns that the current wave of government bailouts and stimulus spending will not work and could ultimately make the economic situation worse,” the NY Times blog, Dealbook, posted on May 8, 2009. (note: Distressed assets, huh? Could Paul Singer have a vested interest in seeing more distressed investments coming on the market?)
• “I think we’ll see unemployment at 10 to 15% before its all over,” said the Managing Partner of a major turnaround management firm at a recent executive gathering. Perhaps, the turnaround guys benefit from keeping the downturn down too?
• “Worst may be yet to come,” reads Chicago Sun Times reporter Terry Savage’s post on May 11, 2009. After providing more advice of the Elliott variety, he adds, “Sorry to spoil your day with these unpleasant forecasts. We'll only know in hindsight if the bulls or the bears are right. But it's always dangerous to get caught up in the euphoria of the bullish crowd. We learned that lesson already, didn't we?”

What can we say?

So, how should professional services advisors participate in conversations about current economic conditions? We’re paid to provide our clients and colleagues with a complete vision of reality in order to deal with it most effectively. So, perhaps we should always answer the “What are you seeing?” question with a perfectly balanced “good and bad” analysis. At the same time, we’re also paid to enthusiastically lead our clients and colleagues from darkness to light; from difficult situation to success. And, we’re paid to attract clients and grow them…not just dispassionately advise them. We get hired for our likeability as much as for our capability. Client perception of our likeability almost always correlates with an advisor’s positive, optimistic enthusiasm. Further, our own persistent action correlates with our optimism. The classic book, "Learned Optimism" by Martin Seligman, confirmed that the most successful salespeople were had the most optimistic mindset. So,if we are at risk of misleading the client with either too positive or too negative an assessment of what we’re perceiving in the marketplace, it is in your best interest and the client’s to lean toward the positive. It turns out that hope IS a strategy. Talk it up.

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