Recession lessons
2008-10-20 08:38
Chris Moerdyk
When the world gets clobbered by a financial crisis and countries head into a recession like suicidal lemmings, the immediate reaction of everyone from big business to the ordinary Joe in the street is to batten the hatches and hope like hell it will all pass quickly.
But when one looks back at history, it is quite remarkable how many companies and smart people looked for the opportunities and didn't just concentrate on the doom and gloom.
The last seriously punishing recession started in the USA in November 1973 and ran wild right through to March 1975. That was when people were hurling themselves out of stock exchange windows as the stock market crashed by almost 50%. Inflation went ballistic and here in South Africa in 1975, in a desperate effort to save petrol, the Government brought the speed limit on national roads and freeways down to 80kph.
But, some people and companies saw things differently and instead of just giving up they looked for opportunities. It was a lesson I learnt as a marketer and right now I am looking for opportunities just as I did way back in the 1970s when my little marketing business really started flourishing.
According to the US weekly, Advertising Age, Frederick Smith launched FedEx in 1973 as jet fuel prices were rocketing.
Bill Gates and Paul Allen started Microsoft in 1975. Think about it. In the middle of the worst recession since the great depression of the 1920s, Bill Gates decides that university degrees aren't for him so he bails out and decides to start his own computer software company.
Lessons
Everything was supposed to be wrong. How can one not have a university degree? How can two youngsters possibly start a new business at the worst possible time?
Bill Gates and Paul Allen taught us all a monumental lesson.
Anything is possible at anytime if you just believe in it and yourself enough.
As US inflation hit 11% in 1974, consumers started buying cheaper products and tried food alternatives such as soy-meat. They stocked up on staples. General Foods rolled out economy-size packages. Freezer sales leapt 26% in 1974. This helped set the stage for a retail innovation: Price Club, a membership warehouse chain similar to our Makro.
Interest-bearing cheque accounts made their debut in banks. Pioneering supermarkets began accepting credit cards.
Change in service
During the 1970s recession, Procter & Gamble rolled out Pringles chips and introduced a new washing detergent. US TV watchers laughed at Happy Days and Good Times. Leisure suits took off.
And then an ad executive imported 24 tons of rocks from Mexico, invented the pet rock and became a millionaire.
I'm not for a minute suggesting you chuck up your day job and go it alone right now. Not unless you are a real entrepreneurial type with oodles of self-belief.
But what does apply to everybody is not to let the doom and gloom get to you. Its times like these that build character, that distracts us from pettiness and that builds relationships and family unity.
It stops businesses from taking consumers for granted and makes them start giving them value for their money.
And service.
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