Preparing for Financial Crisis

Rob Enderle

One of the difficulties we have with an administration that has cried wolf as often as this one has is taking a real problem seriously. We have a real problem. With the stock market in free fall and consumer spending expected to be at historic lows, it is time to seriously think about protecting your job and your company's security, and maintaining morale. Years ago, I did a lot of training for times like this, and I've been very happy I've never actually had to use it. I'll share a little of what I can remember and recommend that, while this crisis is with us, you play heads-up ball.

 

Realize we likely will have some major strikes and we may have riots before this is over. The full impact of what happened this week is months off, as a market drop like this takes awhile to work through the system. Unfortunately, this couldn't have happened at a worse time, since we're in an election year and right before the critical holiday buying season. Let's discuss what you need to be thinking about.

 

Morale

 

People are watching their retirement money go up in smoke. Shortly, a lot of them will be laid off. Take a lot of people, remove their reserves, and then remove their income, and you have a nasty cocktail for both workplace violence and work stoppage (not to mention strikes). Make sure there is either state or company provided counseling available and that people that appear unstable can be given help or prevented from harming anyone.

 

People have an incredibly hard time being productive when their income, jobs and retirement are at high risk. This is Maslow's hierarchy of needs 101, and to get around this, they need to be distracted from the problems. Things will recover; they always do. If at all possible, avoid fueling the negative sentiment. Instead, form groups that can talk about what to do in the face of these problems. Community can be a very powerful help to folks in pain and the people most at risk are those who aren't close to anyone and don't feel they have anyone to listen to them. Here is a good list of 10 things to do in case of a crisis like this. Often if people feel like they are making a difference, that can offset significantly the personal depression that otherwise might set in.


 

Your Job

 

At times like this, people find out that they, surprise, aren't irreplaceable. Staff jobs are always the most at risk and, unfortunately, IT is a staff job. Line jobs particularly tied directly to either customer maintenance or revenue are probably the safest, relatively speaking. Middle management jobs overall are the most exposed; that is often where the initial cuts take place. If there is an opportunity to move to a more strategic department or position than you are in, take it. Also, my experience is, if the company is offering separation packages, the early ones tend to be the best and the job market will get progressively worse for some time, so think about timing if you can't find a safe haven.

 

If there was ever a time not to be a problem, this would be it. There are two arguments with regard to taking on a layoff management role. One is that your job will be safe while you are in the role, and if you do it well, you are likely to be retained. The other is that you both piss off a lot of people and tend to be tossed as the last folks you lay off exit the door. I've seen both occur. It might be wise to look at the past practices of the decision maker(s) who are driving the process for guidance. Also, here is a good recent story on protecting your job in a financial crisis.

 

It should go without saying that buying or leasing anything on time when your job is uncertain is a bad idea. This could go on for awhile, and your reserves are going to be challenged enough as it is. Cash and liquidity conservation either as a company or an individual is a really good idea right now.

 

Riots

 

Riots tend to happen in large population areas and ones that will likely be hit hardest by a large upswing in unemployment. They could move to areas of affluence; Wall Street itself could become a target. The rule here is to make sure you and your people are someplace else when this happens, and that there is nothing in the area that can't be replaced. Now is not the time to have a major data repository in a city center.

 

Your people should know what to do and where to go if there is a riot. Popular Mechanics posted a good guideline recently. You don't go towards the riot, and if a large crowd is running towards you, the best strategy is to run at right angles to it and not try to outrun it. Otherwise, you could find yourself between the crowd and the police, who may not respond kindly to anyone running at them.

 

Police have a number of new toys to deal with riots, none of them pleasant; you'll want to get upwind and as far away as quickly as you can. Your security organization should have a preparedness plan and you should see how you and your organization fit into it. If such a plan doesn't exist or is out of date, it needs to be updated or created.

 

Wrapping Up

 

Just remember: This too will pass. The mistake to avoid is to go heads down and not look for the changes in your community, your business, or your co-workers. I expect home and business thefts will increase sharply, carjacking will go up, and violence in general will become more of a problem as people reach the end of their resources and get angry and desperate. Keeping your head up and assuring that your family and employees do as well could go a long way towards surviving this financial crisis intact and, once the market recovers, there should be plenty of opportunity to make up much of the financial and career ground that was lost during the downturn. Remember: A lot of very rich people got that way by being alert to opportunities during previous market downturns.

 

Maintaining perspective and not letting your anger or frustration make things worse will be important. Keeping a level head could both help you take advantage of opportunities and minimize the impact. What doesn't kill us only makes us stronger, and being stronger is a good thing. Sorry I couldn't come up with something more uplifting.



Add Comment      Leave a comment on this blog post

Post a comment

 

 

 

 


(Maximum characters: 1200). You have 1200 characters left.

 

null
null

 

Subscribe to our Newsletters

Sign up now and get the best business technology insights direct to your inbox.