Changing the Narrative: Choosing Accession Over Recession
*Disclaimer – I am no economist, just a simple man with a simple idea. This is not financial advice.*
We all have heard the doom and gloom of a “pending recession”, and many people don’t know what it is, yet they fear it.
A recession is “a significant, pervasive, and persistent decline in economic activity for two consecutive quarters.”
During a recession, spending slows down, and so does the economy. Due to this, companies may have to lay people off and cut budgets.
Economists measure a recession’s length from the prior expansion’s peak to the downturn’s trough. Recessions may last as little as a few months, but the economy may not return to its former peak for years.
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The New Zealand Reserve bank has predicted that the country will tip into a recession in 2023, with the official cash rate lifted by 75 basis points to 4.25%. It is predicted that the cash rate will continue to rise and peak at 5.5% next year, where it will remain for 15 months before dropping.
Recently, it has felt like the world has been on fire. We have had a global pandemic, supply chain issues, labour shortages, wars, and even the All Blacks’ losing streak. These things all take a significant toll on our emotional bank balance. Then on the flip side, we have had high wages, huge mortgages, and low-interest rates.
What causes a recession?
The simplest (remember, I’m not an economist) cause is less spending, which means less money is going around.
But what really drives this?
If I look back over the years, typically, something like this happens:
People are spending a lot, the economy is good, wages are high, unemployment is low, and inflation starts to creep in. Inflation is a decrease in the purchasing power of money, reflected in a general increase in the prices of goods and services in an economy.
We then start to hear cautious tales of spending and potential economic ruin pending through the form of “recession” in the media. The stories begin quietly, with subtle warnings from the reserve banks, economists, and media, telling people to be cautious. Then as inflation grows, the noise and the seriousness of the impending recession do too.
As things heat up, companies start to implement their survival measures. They are told to revise and strip back unnecessary spending, right-size the staffing resources, put some cash away, and become risk-averse.
For what it is worth, all these things are good things to do if you run a business, not just when there is a recession on the horizon.
Essentially, we start to believe what we hear, the doomsayers get louder, and we react accordingly. Again, in many cases, being cautious is not a bad thing.
However, the recession is driven by people not spending and revenues decreasing, so being overcautious only furthers this.
What happens if we flip this on its head?
Have you heard the story of the chicken who believed the sky would fall?
The moral of this story is to not go along with others just because someone says something is true.
As a business owner, I like to pave my own path. I believe that recessions offer opportunities for change.
When you have a solid business plan in place that encompasses a slow market, then the future becomes less scary and, instead, full of possibilities.
Rather than letting the markets be driven by emotion, what would happen if we started to react differently?
Instead of using the word recession, what would happen if we changed this to a different term? Perhaps “Accession.”
- The attainment or acquisition of a position of power.
How would you make decisions in an Accession?
Many marketing companies will tell businesses that they should spend more money on marketing to survive a recession. There is plenty of research to support this.
But to be blunt, what people sell doesn’t matter. To survive a recession, people need to sell more of their products/services.
I’m not saying throwing all your money at marketing won’t work. But I believe it is important to think with a clear head without emotions being involved. Understanding that if the market is shifting to an opportunity to attain power – what moves on the chess board do I need to make to enable that?
You may need to reflect on your budgets and ensure that every part of your business performs as it should to achieve your return on investment (ROI). Reflection is a more powerful tool when it is part of your day-to-day business operational strategy rather than a last resort when people claim the skies are falling.
How can positive sentiment help?
Economic performance and sentiment are directly related, but ultimately, history has shown that it will be a sentiment that powers us out of a recession.
First written by John Maynard Keynes, it has been widely recognised that economic performance and sentiment are directly related – whether amongst consumers or businesses. Without positive sentiment, economies stagnate.
At Attain, we have decided to change our mindsets, and every time we hear the word recession, we change it to Accession. It is our time to attain power, and it can be yours too!
We don’t look at our business from a “we must survive” mindset. Instead, we look for opportunities, we double-check the ROI on investments, and we ensure that we keep moving forward instead of blindly following what others are doing. Rather than being anxious about what the next 12 months may bring, we face them with excitement and determination.
We are not participating in this so-called “recession”. As business owners, we have the power to make a change. It starts with each of us taking action to make our businesses more resilient and looking to attain more power.
If you want to join our Accession to attain power for your business, contact Attain today to drive your revenue goals.
Sharn Piper – CEO
M: +64 27 733 4333
Having successfully led numerous sales teams, built multiple successful businesses I know what it takes to create a sales process that is robust, repeatable and produces consistent results when applied in a consistent way.