By Pat Hinds
For the majority of 2009, I have been working with a large company helping them with a strategy to capture more market share in a vertical that has a significant economic presence in a major market. The company operates in a sector that has been impacted by reduced consumer and corporate spending due to the recession and is also facing new competition that will impact growth and margins. As a result of the changes in the economic and competitive climate the company made the decision to lay-off 5% of its work force resulting in 1000 employee terminations. I have worked for this company as an employee and consultant over the last 5 years and I know many of the people personally that have been terminated, and the changes at the company have impacted the status of my project.
When these types of changes occur they have a significant impact on the people who have been terminated often making them feel they are in a “crisis” situation. Job lose can result in people feeling a lack of direction that was provided by their job; as a result people end up asking themselves, “what is next”? When you start asking, “what is next” it is inevitable you start to focus on the “what if” worst-case scenarios and that is when people become overwhelmed with FUD – Fear, Uncertainty and Doubt. I have made reference to “getting back to basics” in many of my blogs and when you are faced with crisis people need to get back to basics and focus on the action items they can control at that moment. It is very important that people do not spend valuable time and energy on trying to determine why the crisis happened or what is the worst thing that could happen is. As a result of the crisis all efforts need to be spent on what can be done in the moment to change the situation.
We have two great examples of how the US Government addressed crises by acting swiftly and focusing on what they could control. The two examples are the “American Recovery and Reinvestment Act of 2009” and “Troubled Asset Relief Program” (TARP).
American Recovery and Reinvestment Act of 2009
Section 3 of ARRA listed the basic intent behind crafting the proposal. This Statement of Purpose included the following:
– To preserve and create jobs and promote economic recovery.
– To assist those most impacted by the recession.
– To provide investments needed to increase economic efficiency by spurring technological advances in science and health.
– To invest in transportation, environmental protection, and other infrastructure that will provide long-term economic benefits.
– To stabilize State and local government budgets, in order to minimize and avoid reductions in essential services and counterproductive state and local tax increases.
Troubled Asset Relief Program
The Troubled Asset Relief Program (TARP) is a program of the United States government to purchase assets and equity from financial institutions to strengthen its financial sector. It is the largest component of the government’s measures in 2008 to address the subprime mortgage crisis.
People will argue that the US Government has made a huge mistake in printing too much money and down the road this will have a negative impact on the US dollar, inflation, and employment. This may be the case, or it may not be the case, nobody knows for sure. The worst case scenarios have not happened; what we know is a group of some of the smartest people in the world got together, identified a crises and put an action plan together that focused on what they could control (printing money) and implemented the solution without hesitation.
My recommendations to my friends and to myself is that when in crises do not spend too much time trying to figure out why something has happened or thinking about the worst case scenario that may or may not happen. Focus on the moment and what you are doing to change the direction of the crises. This will result in a feeling of a sense of direction that is controlled by your actions. When the crisis is resolved you will have plenty of time to determine why it happened and be thankful the worst-case scenario never happened.