(Blog entry originally posted on March 27th 2009)
We are not strangers to each other. We have met before. It was March 2000 the month marked as the collapse of the Dot.com firms dragging with them the whole ICT industry. At the time I was a Director of Operations in a Dutch software firm with great products but wrong timing.
For those of you that joined the rat race after 2000, I can tell it was an amazing time back then, whereas just anyone could get an investment for any technology idea or a concept for a Dot.Com firm. The new firms were traded in much higher values they represented and a catastrophe was inevitable.
When the IT bubble exploded, the NASDAQ that have reached above 5132, collapsed, avalanching the industries of IT, investment and global economy into a deep recession. And if that wasn’t enough, September 11 came the next year and did the same to the Travel, airlines and insurance industries. It took years for the economy to recover.
The world economy took a steep dive and I found myself with no job, just like many others. It was right after, in 2002 that I established my company Endeavour Enterprises N.V. against the advice of my lawyers and accountants. They were right, it was not the time to start new enterprises nor it was the time for bold Endeavours, however I preferred that than just waiting.
It was back then when I looked into the economic crisis straight into its eyes. I was just hoping it would take more than just few years before we meet again.
Let’s admit it; we all are taking economic growth as a given fact. We plane life accordingly, assuming growth in sales and increase of our investments’ value. No wonder we are so helpless when being hit by a major recession. The damage is enormous and is visible in our daily life: people losing their jobs, not buying many of the things they planned to, losing their savings and even their houses.
It is my opinion that we should deal with the human factor, the one that is partially responsible for this misconduct. If irresponsible managers and brokers contributed to the creation of the fall, we should hold them responsible and more importantly, create a better, more balanced and secured brokerage system.
What do we do now? Here are some thoughts:
Last week I found myself looking at my favorite shoes, half priced at a local store. I was just about to buy the shoes when a thought bothered me: in the middle of the worst world slowdown, I am buying shoes which I really don’t need just because they are on sale…
I can’t blame our surplus society and culture cultivating purchasing as a hobby or even leisure. I am guilty as one can be. When supermarkets are selling none-food, cheap merchandize at the entrances, they have people like me in mind… I can’t take that corner without buying something. I call it Buy-me corner.
Nevertheless, I was standing in the middle of the shop with the fancy shoes in my hand, pondering what to do. I took an unprecedented decision not to buy it. I thought that it would be extremely immoral to buy half priced shoes I don’t need at this time. Funny, I resisted my shopping urge because of the time we live at. My secretary would be proud of me. She knows better than to send me for office shopping.
Walking back home empty handed, my beaten shopping urge tried its last attack and another bothering thought came up: ok, great. 12 points for morality but did I actually helped someone by not buying the shoes? What happen if the rest of the world will do that on the macro level? We all actually contribute to the recession, not eliminating it.
Looking around me, we are already doing it. Everybody is just waiting for the recession to pass. On the professional level we stopped hiring long ago, we fired the unnecessary employees and we did not sign the suppliers contracts. In the personal consumer level, we buy only what we really need. Well, most of us… and by doing so, we are helping the crisis to hold tighter to our economy.
Increased governmental investments & spending is the answer economists and heads of countries are giving us. The idea is to inject enough investments & spending to move the wheels of the economy forward. You can imagine an old coal train needing a major push forward or a jet engine rotating on its electric power before it catches up. So is the economy which is built for speed but need the injections of investments to move these giant wheels forward. It is only a question of time before that happens. Never before in the documented history, amounts of such scale where invested and deployed by countries and organizations in order to change the tide.
What we feel now is the fear and hysteria that is a byproduct of that crisis. The fear that we did not even reach the bottom is the strongest one and I admit it is not easy to live, let alone manage, in such scenario.
Here is what I am going to do as a consumer: I am going to make sure I spend some money on things important for me in places I like. I am going to make more lunch meetings at my favorite restaurant and have more time spending outside the office. I have few restaurants and bars owners here that have been friendly to ma and hence have direct responsibility to the few extra kilos I gained. This time I am refusing any free meals and food, I am paying also for the last few good years. I can’t save all of them but I can help a few.
To other manager I call to think it over once again before dismissing people. I remind you that not all costs related to dismissal can be quantified. Demoralization, training of new people, stress and other associated actions are mostly not being assigned to the cost of dismissing people.
This is the time to find people other tasks within the organization even reduce positions to part-time, encourage people for study part-time, anything but layoffs.
Some of the public firms that I am a member in their board of directors decided this year to avoid paying any bonuses to management and all directors voted for a cut of 10% in their own salary. This is a clear message sent to some Dutch and American financial firms but moreover, it is the right thing to do.
Whatever happens, do not lose hope. Economy is the strongest drive known to mankind. It brought us so far, it will take us further.
David Dekel, CEO