Delivered to the Public Relations Institute Association Breakfast, 3 March 2010.
I should say at the outset that I don’t plan to make any predictions about when and how the current crisis will end. I don’t know and I don’t think anyone else does either. In the immortal words of Sam Goldwyn – it is always dangerous to make predictions, especially about the future.
But I will make some tentative suggestions.
For years up until 2007 I kept saying that all this just couldn’t keep going on. I expected to be scoffed at because basically I have always been a contrarian – when everyone is saying something it is the time to start thinking the opposite is true or, in the word of J.K.Galbraith – the conventional wisdom is always wrong.
During the Roaring 20s stock market boom in the US Joe Kennedy (a notorious bootlegger and insider trader who was appointed by Roosevelt to head the SEC ) expressed it a different way when he said that when lift attendants and shoe shine boys start giving you stock tips its time to sell. There aren’t too many lift attendants or shoe shine people around these days but perhaps a modern day equivalent is that that when PR people – who you know are innumerate talk – about the growth potential of financial PR it’s probably time to sell.
So I can really only give two pieces of general advice. First, given the conventional wisdom being wrong approach it might be that everything is not going to get dramatically worse, as everyone thinks, but might start to get better sooner than we think. Second, if you haven’t sold already don’t sold now. You are probably better off riding it out and waiting for the recovery.
The ad man Siimon Reynolds recently wrote an article “five reasons why doing business in a recession is better than in boom times”.
I can only assume he has lived through fewer of them than I have.
Indeed, I’m not to sure how many booms and busts I’ve been through. I can remember the 1961 credit squeeze; started my career in PR during the Poseidon mining boom of the 1960s; saw the 1970s stagflation; the 1980s and 1990s recessions; the dot com boom; and the most recent boom and bust.
I can even remember when the song I will survive was in the hit parade and think it’s not a bad anthem for today.
As a general rule – up until about the late 1980s – Reynolds would have been right about PR if not about advertising. PR was traditionally counter-cyclical and the big growth of the Australian industry came during the 1961 and 1972 downturns. But today our industry is just as cyclical as any other. That’s bad news for most in the industry – but bad news which can be tempered by making some good strategic decisions about your life and your career.
WHAT HAVE I LEARNT
There are some PR specialisations which tend to be relatively recession proof. They are:
- Issues management – reputation, problems become more acute and more damaging.
- Government relations – more regulation, seeking favours from government, working with government as the major player in the market.
- Marketing communications – need to protect market share (Myer), need for creative and cost-effective strategies and tactics. Quote Neil Shoebridge horror at suggestion that PR was better because it was cheaper.
- Insolvency practice – Royce Communications
- Crisis communications – failures
- Financial PR – at high strategic level
- Social marketing – governments always wanting to be seen to be doing things.
The catch – if you haven’t got that expertise then it’s a bit hard to get overnight but you can plan ahead (see later).
WHAT CAN YOU DO AS AN INDIVIDUAL?
My advice here is a mixture of personal and professional.
- Admit there is a problem and start thinking about it strategically. Only the paranoid survive and those who plan for the worst-case scenario are always prepared for when Black Swans turn up. Hope for the best but prepare for the worst.
- Reduce debt. You don’t need a plasma TV nor a new Beemer. If you spend money, or have to borrow, make sure it is for an investment (like education) on which you will get a return.
- Take the opportunity to upgrade your qualifications – as Masters, a PHd by courseworks, short courses – anything which will make you more employable when the market turns.
- Understand the bottom line. In the next year or so the world will be divided into those who do understand and those who don’t. Those who do will survive those who don’t ….. won’t. You simply – if you can’t now – must learn to read a P&L, balance sheets, sets of account, budgets, corporate governance, corporate law etc. AICD has a range of publications which will let you undertake self-directed learning in these areas.
- Upgrade your technical skills – spreadsheets, project management tools, Power Point. Excel, etc etc. Now is the time to go beyond being involved in social networking to arrange your social life and understand how it can be used as a targeted and effective comms tool.
- Learn management speak. Speak the language and understand the import of management theory. The AICD bookshop will help there too.
- Follow politics and government – if you don’t understand politics and the system of government you won’t understand how many of the most important decisions which will be made in the next few years will get to be made. Political decisions may result in the life or death of your organisation.
- Be generous with others – charity work, help friends, see people who are looking for jobs, make suggestions. Altruism is good business and good networking. Favours in tough times are embedded in people’s minds. Mike Wooldridge.
- Work really hard at being more creative.
ADVICE FOR CONSULTANCIES
I was reminded the other day, by Angela Scaffidi, that in one of the recessions in the late 1980s or early 1990s I had said to the Turnbull Fox Phillips staff that whatever happened no-one would lose their jobs. A big call and we managed to keep our promise. Obviously if you are suffering severe financial pain you can’t do that, particularly as your bank won’t let you. But there are some things you can do – some of them the same as individuals need to do.
- Reduce debt
- Share the pain and the successes– on the one hand: four day weeks, salary cuts skewed to the more senior giving up more. Freezing senior salaries so more junior people can get more and keep what they have. On the other – gifts and bonuses however small when things do go well.
- Ever day say to yourself – debtors, debtors, debtors. How do I reduce the size and time of my debtor profile.
- Develop new products – LM and myself in the reputation and benchmarking area.
- Invest in staff training to address the needs discussed in my advice to individuals. Get your own experts to pass on their expertise.
- Be generous – see all those people who send you CVs, see if you can help eg Six Apart in San Francisco free blogs and set up help to unemployed journalists.
- If you build it they will come – Start building for the upturn now as well as coping with the downturn.
- There is always someone, somewhere who needs help telling a story. -Communications and PR are always needed. Problems, opportunities, new products, old products, crises, issues, insolvencies, government intervention – all of them have comms implications. Need to be confident that you can advise in these situations.
- Understand what serendipity really means – be flexible, well-trained, well prepared with a wide range of skills and knowledge.
Remember Charles Darwin – 200th anniversary last month. Not survival of the fittest but about resilience.
And that is the basic piece of advice for those who want to survive the recession – work on the things, the attitudes, the skills, the abilities which nurture and re-inforce resilience.
It will not only help you survive but also help you prosper in the inevitable upturn – and make you ready for when it all happens again.