I have served on the board of Motivequest for many years and David Rabjohns is one of the smartest CEOs around. He proved it the other day when he sent an email out to his company called “the best and worst of times”. As any leader does, he wanted to get in front of the bad economic news issue and name the 800 pound gorilla in the room. This is smart for all of us to do with our companies.

In his note he explains:

“We are headed into a recession and that will affect all of our lives. What becomes of us will depend on our attitude and our smarts.  Inevitably we will lose business as it progresses but we can also gain business.  Already several clients are looking at the effect of the recession on consumer attitudes (to finances, food, value, retail, etc). As I am old enough to have weathered several recessions I thought it might be helpful to give you my perspective on things..Recessions come and go.  They are an inevitable part of the economic cycle.  The good news is that “they go” and that if you are smart you can actually benefit from them.

Recessions occur when the market has been going too well for too long.  Just for perspective here is the current crisis in the context of the last few recessions.  You can see that while the correction has been large we are only back to the levels we were at in 2003…

This is a recession and my guess is that it will last between 2/3 years.  It is not the end of the world and is certainly not a depression (in the 1920’s they had no FDIC, no social security and no government bailout).  We, and the economy, will weather the storm just as we have before.

What I have seen during the last few recessions is that spending habits change.  People stop buying luxuries and return to basics (the beer and cigarettes syndrome).  Companies that understand this can thrive.

Many companies stop spending on sales and marketing in a recession.  Those that don’t can make huge gains in market share and typically thrive as the recession lifts. 

The secret to success is to be nimble and find new solutions to the challenges people face as a result of the recession.  Many companies have grown rapidly by doing this in a counter cyclical way (i.e. during the last recession the direct marketing firms cleaned up from the ad agencies because their media was more measurable.)

 Stay calm.  The world around us is going crazy.  We need to project confidence and help them with the challenges they face.

  Nobody knows what will happen (least of all me) but we can be smart about learning from the past.

–          This is not official advice but some will tell you that there is no better time to max out your 401k contribution.  Effectively you are buying really cheap stocks tax free.  If they continue to go down keep buying every month they are getting cheaper and when the recession turns you will make out.

–          Be smart about the little things (turn lights off, buy birthday cakes at Whole foods vs Benisons, they all add up)

–          Be brave.  These are scary times but I can think of no better place than at the center of the digital revolution, to be right now.”

Well said David.