Dealing with the Recession

More. Bad. News. Every. Day.

The economy is tanking. Automobile manufacturers are on the verge of bankruptcy. We're looking at the prospect of at least a 1$ TRILLION stimulous package that could re-start the economy, but could leave our great, great, great grandchildren in debt until their dying days. Ugliness on the economic front prevails in almost every headline. Well, on the positive side, gas is cheaper. OH, GREAT! We're being encouraged to drive more to hasten the arrival of the time the tanks go dry!

I have believed from the earliest days of what is now agreed to be a deep recession that now is NOT the time to pull in our horns and bury our heads. I believe now is the time to invest, take risks, and grow one’s business. While there can be no mistaking that tight credit, etc. can hamper one’s ability to grow, my approach has always been to depend more on cash than credit. And if you're not in a position to be so sanguine about the scarcity of credit, there's always barter.

Our company is trying to take advantage of a battered marketplace by growing our business. The death spiral to any business begins when it stops investing in its own growth; the businesses that continue to invest and grow in this economy will be much stronger when the economy emerges from this temporary time “in the ditch.”

I acknowledge that my approach carries with it huge risks. Investing money that might be needed later to pay the rent or pay salaries is an enormous risk and it could be a crushing mistake. But I'd rather try and fail than whimper my way to poverty.

That philosophy (perhaps without the whimpering poverty) is just as applicable to associations as it is to for-profit businesses. It is precisely at times like these that associations should take measured, well-conceived risks to help lead their members out of the weeds. Now is the time when associations should look carefully at how the association can help the member bridge the gap between panic and prosperity. Examples abound of panic-induced business decisions that should cause us to question the competence of executives.


For example, despite the unmistakable importance that the sales force is to the success of any large business, sales departments seem to be among the first to be trimmed or to "get the axe" altogether when costs are cut. That's brilliant! Stop investing in selling your products and services. Now, let's see how far that takes you. Or, do what some big businesses do and cut your training departments; that's another example of panic-induced wrong-headedness.

Back to the point at hand. Association can invest in training programs to replace internal capabilities...helping the association weather the equally catastrophic (and remarkably ill-advised) decision to stop spending on association membership. And associations can gently but persuasively remind their members that cutting the sales force is akin to severing the spinal cord.

One thing associations should NOT do is take a leadership role in spreading a message of scarcity and fear. Cancelling or postponing meetings should not be considered unless there is absolutely no alternative. If there are concerns about attendance due to financial constraints, plan for a smaller meeting; take advantage of the situation by videocasting and/or podcasting conference events. The point is this: the association should LEAD the membership and provide guideance and support; running scared and sealing the hatches sends exactly the WRONG message.

Times of economically-induced business panic provide perfect opportunities for associations to experiment, doing things they otherwise might not do. Obviously, all of this is easier said than done. Cutbacks may, indeed, be necessary. Frugality most certainly IS necessary. But neither should be pursued at the expense of leadership and risk-taking and trying to show members a positive direction.

Associations can shine in bad times. Perhaps that's when they can shine brightest.