The Numbers Tell the Tale
Statistics can be scary stuff. Absent of context, stats—like the ones scattered below—can stymie strategic thinking and wreak havoc on your company's short- and long-term planning. Your challenge is to keep that from happening.
But scary they remain. To wit: According to one survey, 39 percent of companies admitted to laying off workers in 2008—and 23 percent said there'd be more downsizing in 2009. In fact, the United States unemployment rate hit a 15-year high in November; the number of temporarily laid-off workers hit a 17-year high.
It gets worse: U.S. automakers posted their biggest annual sales drop since 1974. The Consumer Confidence Index hit an all-time low in December, the same month U.S. factory activity fell to a 28-year low. Not even counting the subprime-mortgage fiasco, the drop in home values has erased $4 trillion of American wealth—and some analysts suggest that figure may double before we bottom out. Meanwhile, in one of those statistical quirks that make bad news sound rosy, household debt dropped for the first time since 1952—a sign that people are hoarding what little cash they have, further stifling the flow of capital.
It's not all numbers—some dire phrases are being thrown about, as well. "The bleakest economic outlook since World War II," said Lawrence Summers, picked to head the new president's National Economic Council. "This is an economy that is in absolute free-fall right now," said Nigel Gault, chief U.S. economist at Global Insight.
But this, too, shall pass. All recessions end, so prepare for what's to come. Oh—and don't be scared.
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Here's a quick link to more of this month's special coverage — The Recession Issue.
Spend Your Way Out!
Counterintuitive as the notion seems, sometimes the only way out of a financial crunch involves spending more to make more. But how do you make your spending more strategic?
Hold Onto Your Customers!
In a recession, making the most of the people and technology you already have—and maintaining the service they provide—should be your top priority.
Create Your Own Upturn
A shift from managing volume to managing relationships.