Remember the unrelenting gloomy economic reports we were fed by mainstream media editors as the 2008 financial crisis unfolded? Now they are starting again.
A banking leader says global money markets effectively froze last week; an economist is even quoted as saying, “We are at the fork in the road and we don’t know which path we are going to take”.
Try to find an article aimed at helping the predominantly small businesses in New Zealand, particularly exporters, during these challenging times. They are few and far between.
I recently attended a presentation by Massey University on Achieving Growth in Difficult Economic Times. It was based on their ongoing study of some 1,500 small and medium sized enterprises, tracked annually.
Results for the 2007-2010 period were tabled. During this period, 43 percent of firms showed no growth in any of the four years. But 50 percent recorded growth in either one or two years. And 7 percent had growth in either three or four years.
These results are not peculiar to New Zealand. In the US, studies conclude that only 10 percent of all publicly-traded companies sustain for more than a few years a growth trajectory that creates above-average shareholder returns.¹
Massey University was able to point to three broad attributes the growing New Zealand firms shared:
flexibility – having a set of different strategies that could be combined to fit the company’s needs and resources
adaptability – being able to constantly change and adjust strategies to fit the dynamic environment
human capital – recognising and acting on opportunities for learning.
If you can tick these three off, congratulations, you are on the right path.
And also take comfort from a further Massey conclusion: that in a recession, vulnerability is not “a given” – some small companies do beat a recession.
You might also like to consider a figure cited by Stephen Denning in his latest book The Leader’s Guide to Storytelling: persuasion constitutes more than a quarter of the US gross national product.² If good storytelling accounts for at least half of that, then it returns over $1 trillion in the US, Denning concluded.
I remember telephoning the leader of an exporter who was taking part in a biotech delegation to Melbourne a few years ago. I asked him if he needed a press release for local biotech media who were attending the conference. “Oh no,” he said. “We’re only going as part of the delegation. We’re not seeking individual attention.” Unfortunately that is how many of our exporters are seen overseas. One Shanghai businessman put it in a nutshell, “New Zealanders seldom make a sound in the international market. They have no passion to introduce themselves to others.”
If New Zealand exporters applied as much diligence to the discipline of storytelling as they do to ensuring accounting compliance, how much more could New Zealand transform itself? And they would save themselves time and travel costs because if they make a strong heartfelt connection on first meeting, they don’t have to keep knocking on people’s doors to remind them they are there.
In troubled times, it’s so much more important to make an impression that works for you – to connect with both heart and mind and get the outcome you desire. When the world gets more competitive, we need to be cleverer.
¹ Christensen and Raynor, The Innovator’s Solution: Creating and Sustaining Successful Growth. Boston: Harvard Business School Press, 2003, page 7
² McCloskey and Klamer, ‘One Quarter of GDP is Persuasion (in Rhetoric and Economic Behavior’, American Economic Review, 1995, 85(2) 191-195