COLUMNISTS Spring is a season for hope and renewal. All that stands between us and an end to gloom and doom are...the facts. But perhaps it is time to give optimism a try. Perhaps all the negativity is being overdone. Clearly, it can be self-fulfilling. Leaders should not be moping about, feeling sorry for themselves and spreading misery.
According to Peter Shaw, a partner at the coaching consultancy Praesta, when one chief executive asked his chairman what was the most important thing he should be doing at a time like this, his answer was: “Smile”.
Wishful thinking is no use. It is irresponsible. But there may be grounds for more positive thinking. Here are four reasons for managers to be cheerful.
Things will stop getting worse, probably
There is only one Jim Cramer, host of CNBC’s popular finance show Mad Money. His latest notable outburst came a few days ago: “Right now, right here, on this show – I am announcing the depression [is] over!”
He is going too far, again. But recovering stock markets are anticipating better times. Traders seem to believe that the extraordinary measures taken by central bankers and finance ministers in recent weeks must have a beneficial effect. They may, at least, have helped to avoid catastrophe. Some credit is beginning to flow again.
Sensible business leaders should never be taken in by the oversimplified labels of boom and bust that are used to describe markets. Some companies fail even in buoyant times, others succeed in recessions.
Unemployment – a lagging indicator – will continue to rise, but economies have not totally seized up. There is still business to be done, demand to be met, and customers to be served.
Opportunities as others retreat
Without risk-taking there can be no business. But instinctively many managers will believe that now is not a time to be making big bets, or indeed to be making many bets at all. But this must be wrong. Business leaders do not have the hedgehog option open to them: curling up into a ball until the danger appears to have passed. Potential customers will pass them by. They must still be entrepreneurial even when the prospects are poor.
‘The best opportunities often arise during downturns when distressed sellers offload valuable assets at bargain prices’
Donald Sull, professor of management practice at London Business School, wrote recently about seizing the upside of a downturn. “Most managers look for golden opportunities when the good times are rolling,” he said. “This is a mistake. The best opportunities often arise during downturns when distressed sellers are forced to offload valuable assets at bargain prices.”
If others lack the stomach to go into battle right now, that leaves more space in the market for you and your business.
Time to innovate
Tom Nicholas, an associate professor at Harvard Business School, points out that, during the Depression, many companies were reluctant to maintain investment levels. The growth rate of US patent applications was far lower in the 1930s than it had been in the previous decade.
But not everyone kept their heads down. DuPont backed its researchers right through the 1930s as they worked on neoprene, a synthetic rubber that was finally launched in 1937. “By 1939 every automobile and airplane manufactured in the US had neoprene components,” Mr Nicholas wrote in a recent McKinsey Quarterly article.
Other businesses kept spending to build a more profitable future. Procter and Gamble became a big sponsor of radio programmes – “soap operas” – at this time, building deep brand awareness. Other great consumer brands, such as Kellogg’s, priced themselves cleverly into the market and are still here in strength today.
Good things happen to positive people
A final reason why managers should try and stay positive right now: it works. As Lynda Gratton, professor of management practice at London Business School points out in her new book Glow, energetic and successful teams have often been inspired by leaders who radiate positive feelings and stimulate greater creativity.
These leaders tend to have certain things in common. “They have built deeply trusting and co-operative relationships with others,” Prof Gratton writes. “They have extended their networks beyond the obvious to encompass the unusual”, and they have a purpose “that ignites their own energy and that of others”.
Optimists rule. That earlier advice about smiling may not be so stupid.
It is not easy to abandon a lifetime’s scepticism and embrace positive thinking. But perhaps too many decision makers in business have got used to expecting the worst. We need to snap out of it. Anything is possible. Why, even as media groups in the US shed thousands of jobs, applications to study journalism at Columbia, Stanford, New York University and other schools are all significantly up, Forbes magazine reports. Hope springs eternal in a young journalist’s breast. And in one or two older ones, too.
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