Making It Through The “Financial Crisis”

Sorry for the hiatus --- my wife and I have been moving from one side of town to the other. We had sold a loft we owned and lived in about 3 years ago. This was at the advice of our “C” Level clients and a banker friend. We, therefore, didn’t wind up losing tens of thousands of dollars on it, as we would have if we waited any. Developers have been building literally hundreds of new lofts in the Denver LoDo area, many of which are standing empty.

We then, again with the advice of some very money-wise people, moved into a cracker-box (and rented three storage sheds for our “stuff”) to wait out the housing crisis, which, three years ago, everyone assumed would be over in a year or so. Right. Well, to make a long story endless, when it was clear that the housing crisis wasn’t resolving anytime soon, we decided not to camp out any longer in the cracker box, and got a house that we could actually put our furniture, hundreds of books and other treasures in. And therein lies a column…

No one can predict what is going to happen in a financial crisis. I am very against “Wall Street Welfare.” We are, at least for the time being, capitalists, or, to be more accurate due to decades of encroaching government regulation and meddling, socialistic capitalists. Capitalism means that there will be winners and losers. It also means that, while there are winners and losers, no one has to be a permanent loser.

The alternative, except in a utopia, is either that everyone but the government winds up in mediocre circumstances (Socialism) or that everyone but the government is kept in poverty (Communism) or that everyone but the government and the favored corporations is kept in loss or mediocrity (Fascism…look at the actual definition of Fascism, not how it is currently used by demagogues trying to get your vote…and see why there can never be such a thing as “Islamo-fascism.). Now, call me idealistic, but I am a laissez-faire Capitalist (as well as a Libertarian, but that is a whole other Oprah). Let the free market be free and let it decide. Let there be winners and losers, and let that be determined, not by government collusion or regulation, but by hard work, serendipity and wisdom in investing. Unfortunately, my opinion is in the minority in this country of ours — which became great by the majority of those with influence being of the same opinion I am now…both as a pure Capitalist and a Libertarian.

Back to this current “financial crisis” and executive employment, however.

One thing that you never read much about unless you dig is the fact that many more people became wealthy during the “Great Depression” than lost everything. Unfortunately, my grandfather, who was an attorney and heavily invested in stocks, wasn’t one of them, or I’d be sipping Mojitos under a Caribbean sun right now instead of writing to you. But the fact is that economic conditions do not determine whether or not you’re going to be wealthy. Many other factors do.

One of those factors is making wise choices. For example, our company is actually dong quite well right now. We produced the same amount of revenue by the end of the third quarter as we produced all of 2007. And we expect another record year in 2009. The reason is simple. We have set up our company so that it does well in a boom, in mediocrity or in a recession. We’ve deliberately stayed small enough so that we can swap out “modes” in which we’re working in about a month. And I am a “news junkie” and “policy wonk,” so I have a pretty good idea what’s going on in our country and how it is likely to effect our business, at least in the short-term.

But no one can predict the long-term with any degree of accuracy. Hence, our housing odyssey.

Executives need to remember this and make a personal employment plan similar to the way we run our company. Choosing a company to run wisely is, of course, the best way to assure that your position is safe. If you are currently a CEO or COO, or have influence with these folks, it is a little late, but there is still time to ask what you can do that is counter-recessionary. Virtually any company can make money in a recession, or even a depression. While the time to plan this is during a boom, just like it is best to start networking while you’re employed, it is better to start late than never.

Our clients do quite well in a recession (and, regardless of government figures, there have been several over the last 25 years). They also do well in a boom. There is no great secret here — just good planning and a recognition that economic conditions need not be frightening if you are prepared to prosper from them.

If you are unemployed now, you are probably a little terrified. Relax. There is no reason to be. If you are well-networked, know where the unadvertised (or even as-yet-not-open) jobs are, and can get someone to introduce you to their fellow board members or executives, you will be employed again rapidly. If you are not well-networked, look at a well-connected Executive Transition Coach who can introduce you to the people you need to meet. If you’re in the Front Range/Denver, Colorado area, I’m happy to meet with you and give you some direction. If you are not, ask around to your friends and golfing partners and find a coach who is well-connected, successful, and experienced in dealing with top executives. Even the best coach will run less than a couple of weeks salary for top executives, and is the best investment in your career you can make — so long as you recognize that there are plenty of scams in this business and choose carefully.

All in all, however, don’t “buy into” the panic and fear that the media is generating. This is how they sell newspapers and news shows. Everything is always a crisis. There is always “breaking news” about some disaster somewhere. The media loves the crisis “flavor of the week.”

Getting through this “financial crisis” is not difficult. It just requires a bit of paying attention, managing attitudes and making wise decisions. As always, please feel free to give me a call if I can be of any help.

To a prosperous year,

J.