Brand Strategy

July 5, 2010

Lessons Fron The Great Recession of 2009

My parents were products of the Great Depression and they always taught me to “plan for the worst and hope for the best”, which in my personal and professional life has usually proved to be sound advice.

Leonard Murphy

by Leonard Murphy

Chief Advisor for Insights and Development at Greenbook

0

I’m going to go off the beaten path of blogging about MR specific issues here and broaden the scope to look at the indicators of the global economy. The Great Recession sped up forces that had been in play for quite some time that have forced a sea change in MR, but what happens if we go into a double dip or full flown Depression? How will our industry fare in such an unprecedented situation? The 2009 Recession took many by surprise, myself included, and many businesses and individuals paid a high price for that lack of preparation. I am sure we all share the goal of not letting that happen again, and one objective of this blog is to collect and disseminate information that may be useful in getting a read on how global trends will impact the MR industry in order to help us all stay a step ahead.

My parents were products of the Great Depression and they always taught me to “plan for the worst and hope for the best”, which in my personal and professional life has usually proved to be sound advice. As a business owner, it is incumbent upon me to evaluate all of the information available to me in order to run a successful business, and macro socio-economic trends are a part of that equation.  Unfortunately, it can be all too easy to be lulled into a false sense of security when a business is successful and forget that “plan for the worst” wisdom.

And that brings us to the economic news of the last few days. Let’s take the politics out of it for a moment and assume that as a business planning exercise, those who state that we’re in dangerous territory are right. Agree or disagree; let’s put the wisdom of my parents into action and use this info to help plan for the worst.

Ambrose Evans-Pritchard writes in the Telegraph that With the US trapped in depression, this really is starting to feel like 1932. He cites many statistics that paint a grim picture of where the economy really is and what it may indicate about the slippery slope that we are heading to.  Near the end of the article he sums up where all of these data points seem to lead too:

Investors are starting to chew over the awful possibility that America’s recovery will stall just as Asia hits the buffers. China’s manufacturing index has been falling since January, with a downward lurch in June to 50.4, just above the break-even line of 50. Momentum seems to be flagging everywhere, whether in Australian building permits, Turkish exports, or Japanese industrial output.

On Friday, Jacques Cailloux from RBS put out a “double-dip alert” for Europe. “The risk is rising fast. Absent an effective policy intervention to tackle the debt crisis on the periphery over coming months, the European economy will double dip in 2011,” he said.

Fareed Zakaria zeros in a bit more in his article in the Washington Post: Obama’s CEO problem — and ours. Rather than enumerating all of the evidence, he jumps right to the heart of the matter; the symbiotic nature of the consumer/business relationship: companies hire people, people spend the money they earn on the products companies produce, companies hire more people as a result. His conclusion is that we have to kick-start this cycle again, and his question is why isn’t it happening already?

But government spending can only be a bridge to private-sector investment. The key to a sustainable recovery and robust economic growth is to get companies investing in America. So why are they reluctant, despite having mounds of cash? I put this question to a series of business leaders, all of whom were expansive on the topic yet did not want to be quoted by name, for fear of offending people in Washington.

Economic uncertainty was the primary cause of their caution. “We’ve just been through a tsunami and that produces caution,” one told me. But in addition to economics, they kept talking about politics, about the uncertainty surrounding regulations and taxes. Some have even begun to speak out publicly. Jeffrey Immelt, chief executive of General Electric, complained Friday that government was not in sync with entrepreneurs. The Business Roundtable, which had supported the Obama administration, has begun to complain about the myriad laws and regulations being cooked up in Washington.

Rounding out the relevant information is an interview with Robert Prechter, the market forecaster and social theorist in the New York Times. Mr. Prechter is definitely in the “plan for the worst” camp, as this except shows:

Mr. Prechter is convinced that we have entered a market decline of staggering proportions — perhaps the biggest of the last 300 years.

In a series of phone conversations and e-mail exchanges last week, he said that no other forecaster was likely to accept his reasoning, which is based on his version of the Elliott Wave theory — a technical approach to market analysis that he embraces with evangelical fervor.

Originating in the writings of Ralph Nelson Elliott, an obscure accountant who found repetitive patterns, or “fractals,” in the stock market of the 1930s and ’40s, the theory suggests that an epic downswing is under way, Mr. Prechter said. But he argued that even skeptical investors should take his advice seriously.

“I’m saying: ‘Winter is coming. Buy a coat,’ ” he said. “Other people are advising people to stay naked. If I’m wrong, you’re not hurt. If they’re wrong, you’re dead. It’s pretty benign advice to opt for safety for a while.”

Now certainly there are ample analysts out there who claim that things are not as bad as they seem; to me they fall under the “hope for the best” category, and I think we all know how to do that. The exercise here is asking what if they are wrong? How will the MR industry respond to the potential of further global economic slippage? It’s a question we all need to be asking ourselves, and we need to be aggressive in planning for that contingency. 2009 taught us that MR is not recession proof, while also showing us that it is resilient. That resiliency is what will help get us through future hard times. Out of a modicum of prudence we better start stretching now!

0

businessmarket research industry trends

Disclaimer

The views, opinions, data, and methodologies expressed above are those of the contributor(s) and do not necessarily reflect or represent the official policies, positions, or beliefs of Greenbook.

Comments

Comments are moderated to ensure respect towards the author and to prevent spam or self-promotion. Your comment may be edited, rejected, or approved based on these criteria. By commenting, you accept these terms and take responsibility for your contributions.

More from Leonard Murphy

The Next Wave of Disruptive Technology that Changes Everything

Research Technology (ResTech)

The Next Wave of Disruptive Technology that Changes Everything

There have been a few big inflection points of societal disruption driven by technology in the last 50 years: One was the introduction of the Internet...

Leonard Murphy

Leonard Murphy

Chief Advisor for Insights and Development at Greenbook

Quantifying the Impact of Insight Innovation

Insights Industry News

Quantifying the Impact of Insight Innovation

We previously announced the milestone of our Insight Innovation Exchange (IIEX) conference series’ 10th anniversary, celebrating a decade of identifyi...

Leonard Murphy

Leonard Murphy

Chief Advisor for Insights and Development at Greenbook

How Generative AI is Changing the Research Industry

The Prompt

How Generative AI is Changing the Research Industry

ChatGPT (GPT meaning “Generative Pre-trained Transformer”) is a chatbot launched by OpenAI in November 2022. It has quickly exploded in public awarene...

Leonard Murphy

Leonard Murphy

Chief Advisor for Insights and Development at Greenbook

Celebrating 10 Years of Innovation with IIEX

Insights Industry News

Celebrating 10 Years of Innovation with IIEX

Editor’s Note: The following is a joint statement from Lukas Pospichal, GreenBook’s Managing Director, and Lenny Murphy, GreenBook’s Chief Advisor for...

Leonard Murphy

Leonard Murphy

Chief Advisor for Insights and Development at Greenbook

ARTICLES

Moving Away from a Narcissistic Market Research Model

Research Methodologies

Moving Away from a Narcissistic Market Research Model

Why are we still measuring brand loyalty? It isn’t something that naturally comes up with consumers, who rarely think about brand first, if at all. Ma...

Devora Rogers

Devora Rogers

Chief Strategy Officer at Alter Agents

The Stepping Stones of Innovation: Navigating Failure and Empathy with Carol Fitzgerald
Natalie Pusch

Natalie Pusch

Senior Content Producer at Greenbook

Sign Up for
Updates

Get what matters, straight to your inbox.
Curated by top Insight Market experts.

67k+ subscribers

Weekly Newsletter

Greenbook Podcast

Webinars

Event Updates

I agree to receive emails with insights-related content from Greenbook. I understand that I can manage my email preferences or unsubscribe at any time and that Greenbook protects my privacy under the General Data Protection Regulation.*