I’m quoted in this article written by Geoff Williams in U.S. News & World Report today about the five-year anniversary of the Great Recession. I remember the failure of Lehman Brothers like it was yesterday. Within a week all our business metrics at NetQoS began to turn negative as customers stopped their spending and hunkered down to prepare for the worst. And it was the worst. It was the worst economic period for the country since the Great Depression. Events of that magnitude stay in people’s minds. I remember my parents talking about the Great Depression. It was obvious in their spending and investing habits that those lessons stayed with them for the rest of their lives. My mother’s biggest concern was whether her money was in a government-insured account even if the returns were quite miniscule.
Unfortunately, many businesses react to tough times by becoming too conservative. As you’ll read in the article, I think that people overestimate the chances of events like the Great Recession happening again and use them as an excuse not to take risks and grow. After all, bad performance in one sector one year often leads to great performance the following year.
Another worthwhile article published along these lines today is by Bill Taylor, the cofounder of Fast Company Magazine, who wrote “Playing It Safe Is Riskier than You Think” for Harvard Business Review. Referencing a white paper by Bradley Johnson, director of data analytics with Advertising Age, Taylor says that “…difficult and uncertain times are often the best times for organizations to separate themselves from the pack, so long as their leaders are prepared not to stand pat.” Very true: The key in business is not to focus on the recent past but look for clues as to what might occur in the near future – and then act.