Editor’s Note: This is a client letter originally distributed earlier this month.
January 15, 2013
Dear Clients and Colleagues:
By now Christmas is a distant memory, resolutions are either taking hold or fading and the fiscal cliff has been averted. At least for the time being or until the country’s so called leaders re-introduce the next crisis to leave unsolved. That’s not political statement; it’s fact.
Which brings us to another reality that has rendered big business’ credibility emptier in the ongoing melodrama called the zero growth economy, or ZGE for acronym hounds. Companies and boards seem to have forgotten how to evaluate risk vs. reward. Note evaluate and consider, not manage with all due respect to mid-tier bank presidents. In news cycle after news cycle, we read about uncertainty, fear and the “tepid job recovery” as a four-column Wall Street Journal article recently led off a weekend edition. Big business blames government’s inability to get things done that favor them; government blames each other while flying all around the world arguing via cable news feed. The result is nothing generally happens resembling productivity. The newest culprit is GM CEO Dan Akerson who recently said the company can’t really look forward until the next 60-day deadline set to deal with the country’s fiscal matters has been resolved. This from the top leader of a company that was rescued by the government back during the last crash. Akerson is not alone. Sequestered martinis, anyone?
Back in the real world, businesses and individuals try to adapt and grow. Large amounts of cash line balance sheets yet revenues as a percentage or GDP (pick whatever measure suits) remain relatively unchanged. There are obviously exceptions to this reality so please don’t discount the general line for the sake of positive cited examples. Apple’s recent introduction of the iPhone 5 and iPad mini, hardly innovations by the company’s high standard, are welcomed exceptions from an entrepreneurial point of view. So are other companies who have defied the New Normal tendency to do nothing and evolve into something better. Insert your own favorite example.
Leadership comprises many things, but at the core in this context, it’s about knowing when it’s time to take risk and then making the decision to take risk. Or not take risk. Despite whatever personal political beliefs you may have, until more risk is taken, rewards will not increase beyond pre-existing self interest. Which means little will change and the status quo will continue. The litany of ongoing excuses for why risk can’t be taken no longer hold much validity. The election has been decided, the payroll tax has been eliminated and big companies are paying more than ever for Super Bowl advertising. Surely a few of those same ad buyers could hire a few folks to generate some demand on the streets? Wake up, captains of industry. Step up and unlock the risk vs. reward ratio. That means you, you and you. The size of the risk doesn’t have to be large. The marketplace will be a better place if you take the step. Plus you’ll actually feel better about having done something vs. remaining on the sidelines, a place that far too many businesses and their leaders have been for the past five years.
To the doomsayers who say nothing will improve, go see the movie, “Lincoln” and adapt your position accordingly. Negativity may focus the mind and heart in the short run, but it can’t be sustained in the long run. Or at least not with non-risk averse leadership present.
Thanks for your continuing support,