November 2008
Recession, Depression, Stagflation, or Recovery? What Should Business Leaders Do?
As business leaders, we are facing some of the most serious and urgent business decisions of our careers. Locally, we have watched a financial industry leader topple as unanticipated forces outside of his control caused depositors and investors to panic and withdraw their money. It's unnerving when the very institutions that you rely on for financial support and advice are facing their own uncertainties.
For many of you, your business has already been affected by the current financial crisis and related changes in the economy. Even if you have been "lucky" so far, now is not the time to have your head buried in the sand. Everyone needs to stay alert and take a serious look at how they are doing business, monitor their key financial and business indicators, and develop strategies for anticipating and responding to the next challenges we will confront.
As your organizational consultants, we have ramped up our efforts to stay informed of key regional trends and provide valuable advice for local businesses. For us, that means an investment of additional time and money in attending business forecast conferences and business networking meetings, participating in online discussion groups and webinars, collecting articles and data, and sharing that information with our clients.
Members of the Vistage CEO Group chaired by Gail have access to weekly webinars on today's economy and what to do, a worldwide network of members who ask questions and share advice through Vistage View, and all-day monthly meetings in which they act as an advisory board to help each other find solutions for their most pressing issues.
Recognizing that all Vistage CEO group members have questions about what they should be doing to safeguard their companies' financial stability, as well as their personal financial future, we have put together a panel of local financial advisors to address these very questions at the next group meeting, in November. This panel will be made up of a senior vice president of commercial lending from a business bank, a CFO consultant who helps companies improve financial processes and decision-making, a managing partner of a CPA firm serving mid-sized businesses, and a principal partner of an employee benefits and financial services firm.
The CEOs in this Vistage group have made an investment in their businesses by becoming members. If you feel that you could benefit from this type of investment in your business, please contact Gail, gail@winwinworkplace.com, to find out if you would be eligible for this group. There are a few slots available for new members.
We recently attended the Los Angeles Business Journal "CEO Conference and Expo" and would like to share with you a few of our take-aways from this conference in our newsletter article "What Should a CEO Do in a Downturn?"
We also have advice for how you can prepare for the financial uncertainties ahead in our newsletter article "Why Strategic Planning is Needed in a Declining Economy."
Keitaro Matusda — the Director of Economic Research for Union Bank of California and the only bank economist located in California — has recently stated that recession is almost inevitable, and interventions by the federal government will determine how shallow or short it will be. As he noted, we know that recovery is bound to happen; but what is unknown is when and how. Mr. Matusda predicted that in the best-case scenario, we will experience extremely slow growth in 2009, we will begin recovery in 2010, and we will resume a typical rate of growth in 2011.
May each of you successfully manage the uncertainty and be prepared for the opportunities when the recovery inevitably occurs. And remember, we're here to help you every step of the way.
Rick and Gail