Home > Change Management, Leadership, Management, Strategy, Unstructured thoughts > Managing Tough Times in 2009 – Grinding it out

Managing Tough Times in 2009 – Grinding it out

I don’t usually and haven’t in a while written directly about things happening around my work environment but it’s been very tough going. I’ve posted a couple of places about managing tough times last year and it’s still tough going.

Following those words, and looking at 36 months into managing like this does take its toll – personally and on the team. The good news is it’s character building and preparation for the future. If you can manage and work through this, there’s not a lot out there the world, life, can throw at you without you fearing it. The old adage, “What doesn’t kill you, will make you stronger” comes to mind.

But the downside is that managing “not to lose” is not sustainable. A friend of mine recently told me how he see’s a lot of the IT world – it’s playing for a 0-0 draw. Hearing that was like a punch in the gut but there’s a lot of truth to that. IT is expected to be perfect 100% and that’s business as usual. One failure or letting in a “goal” then you lose and everyone knows.

For that I like Seth Godin’s blog post called Hierarchy of Success. The 6 items are spot on reminders.

1. Attitude
2. Approach
3. Goals
4. Strategy
5. Tactics
6. Execution

It’s a great reminder when the tough times seems interminable. Focus on yourself, your mind, your path as an anchor and a compass. Then the rest flows.

As one of my favorite quotes says:

“Vision without action is a daydream. Action without vision is a nightmare.”
– Japanese proverb

In any event, the news isn’t getting better and if history is to be judge, it’s downright fugly. While we’re focusing on profits, we can’t forget that Profits = (Top line growth) Minus (Bottom line costs). What the Bottom Line Hides by Paul Lim in a recent New York Times Your Money column notes some frightening historical statistics on this front:

“[Y]ou can only cut so much,” said Howard Silverblatt, senior index analyst at S.& P. “At some point, you need to start seeing the business actually grow. You need to see increased sales” — sometimes called “top line” growth…

While overall S.& P. 500 earnings are still falling on a year-over-year basis, for example, the rate of decline has begun to slow, according to figures compiled by Thomson Reuters…

By contrast, declines in S.& P. 500 sales are picking up speed, according to S. & P. After slumping 14 percent in the fourth quarter of 2008 and nearly 17 percent in the first quarter this year, corporate revenue tumbled nearly 20 percent in the second quarter.

The revenue declines are even more staggering on a dollar basis. From June 2008 to June 2009, revenue of the 500 companies tumbled by a total of $1.15 trillion. “That’s more than the entire fiscal stimulus,” Mr. Silverblatt said…

But Mr. Ablin does not expect a turnaround in corporate sales until at least the fourth quarter of this year or the first quarter of 2010.

And it could easily take more time than that. Historically, revenue is one of the last indicators to recover after an economic downturn…

A recent analysis by Ned Davis Research, the investment-consulting firm in Venice, Fla., found that sales typically hit a trough three months after earnings do — or nine months after a recession ends.
Assuming that the recession has just ended, this means S.& P. 500 sales might not start to recover until next July…

Keep in mind that revenue doesn’t always heal exactly nine months after the economy does. A full year after the 2001 recession ended, sales among companies in the S.& P. 500 — minus the financial sector — were still shrinking by around 6 percent.

Moreover, in the last big downturn, at the start of this decade, revenue declined for seven consecutive quarters. If the market were in store for a similar sales drought, revenue might not start expanding again until the start of the third quarter of next year…

Thanks for that!

  1. October 22, 2009 at 3:43 AM

    Hey, I read a lot of blogs on a daily basis and for the most part, people lack substance but, I just wanted to make a quick comment to say GREAT blog!…..I”ll be checking in on a regularly now….Keep up the good work! 🙂 🙂

  1. October 19, 2009 at 8:27 PM

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