Lessons in Staying Positive – #2

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If you think businesses are struggling, take a look at Tesco: Group sales grew by 11.7% in the 13 weeks to 22nd November.

If you think Tesco’s is alone take a look at Primark: total sales grew by 21% in the year to Sept 13 and profits grew by 17%.

Not bad for an economy that is supposedly suffering badly and a sector that is said to be suffering more than most.

The argument that they have prospered because they are both at the ‘economy’ end of the spectrum is belied by the demise of Woolworth’s. Clearly, piling it high and selling it cheap is no guarantee of survival.

In a similar vein the media, even Governments, would have you believe that banks all over the world are in dire straits and that none of it is due to a gross neglect of duty by the regulators.

Take a look at the Lebanese banks. They are stronger than ever. That’s partly due to the way they conduct business, partly due to strict regulation. Well now, if they can do it, where were the UK Treasury and the US Securities Commission?

And that’s the second lesson: particularise rather than generalise. Generalising is marked by sweeping expressions that allow for no exceptions, such as:

· Everyone & No one
· Everywhere & Nowhere
· Everything & Nothing
· Always & Never
· Best & Worst

Who thinks they have heard reports recently that the FTSE 100 had its worst day ever? And who is aware that the FTSE 100 only started in 1984? Less than 25 years of comparatives doesn’t tell you very much, does it?

Even the FT30 index, which is the oldest continuous index in the UK and one of the oldest in the world, only began on July 1 1935.

Life survived and flourished even though a cataclysmic event wiped out the dinosaurs. The same is true today. Events that are wholly positive or wholly negative are rare events indeed.

Business in Progress

Recently a leading think-tank, the Ernst & Young Item Club, said that the economic outlook for Britain is like a "horror movie".

In my opinion that is a contrived exaggeration designed to catch the attention of the media.

One wonders what metaphor they would possibly have substituted if they had been commenting in 1926. However, there are so many doom merchants plying their trade at the moment that trying to go one better might be expected.

So, just how bad is the economic outlook as seen by the Item Club? What constitutes a “horror movie” these days?

Growth in UK GDP during 2007 was 3.1%. The Item Club expects growth of 1.5% in 2008 and growth of 1.0% in 2009 before it returns to 2.5% in 2010.

Growth????

Oh, yes! Ernst & Young are not forecasting a recession … far from it. They are expecting that the UK economy will continue to grow.

This is about as close to a horror movie as Willy Wonka and the Chocolate Factory.

Even if things turn out worse than Ernst & Young’s choice of prose, professional firms need to get a sense of proportion. In the US Great Depression 1930-33 the reduction in the level of GDP from peak to trough was a fall of some 30 per cent.

That means that some 70% of output was maintained, although the exact figures will have varied from sector to sector and firm to firm. Nevertheless the point is well made that business continued to happen. Some people even did remarkably well out of it.

Therefore, what you can be sure of is that, no matter how poor the economy gets, substantial amounts of business will still get done.

The only question you need to answer is whether you will be among those doing that business.

There is a recognised 3-step process that will help you towards a positive answer:

1. Raise your standards. Increase the levels of service that you provide and the attention that clients receive. Satisfactory is not good enough, either to win new business, or retain existing accounts.

2. Change your beliefs. Who your prospects are, where they can be found, what they want and your capacity to meet those expectations all need rewriting. The world has moved on; you need to keep pace or you will be left behind.

3. Revise your strategies. Whatever game plan you have been following is now familiar to all your staff and most of your competitors. It’s predictable. “A skilled commander seeks victory from the situation and does not demand it of his subordinates” ~ Sun Tzu.

For the outlook to be perceived as bad is nothing new.

Recently, Sam meets his friend Joe in the Arndale Centre and greeted him warmly.

"Hi Joe, I haven’t seen you for some months. So how is the company doing that you set up with Maurice last year?"

"Well,” said Joe, “As I told you then, I put in all the money and Maurice put in all his business experience. But things have changed a bit since then."

"What do you mean?" Sam asks.

"Now Maurice has all the money and I have all the business experience."