For the last one year or rather specifically, the last 6 months; I have been witness to the some of the most momentous changes in my personal and professional surroundings, both in my immediate circle and my extended entourage caused by the global recession and the consequent financial meltdown. Many friends I know have lost their jobs, some have been downsized or forced to take pay cuts. Worse is the case of a few schoolmates of mine who have lost their mortgaged homes and seen their savings wiped-out.
Many of our competitors have shut shop. Fortunately or perhaps, my good karma, we are still very much in business. And unlike other companies, we are fairly busy with sufficient orders that will last the next couple of months but things are still not what they seem.
Big transnational clients who used to pay us on time default these days at an alarming consistency, cheques bounce infrequently or we get requests to delay their deposits. One of our client, a large publishing house which has shut down owes us several thousand dollars while an other of a similar stature has gone bankrupt virtually guaranteeing no payment for the foreseeable future. Comparatively smaller customers and SME’s are on better league but want contracts to be reworked and rates reduced or politely tell us to look elsewhere. The only saving grace being a handful of old clients with solid fundamentals who seem to weather this storm and new contracts from agile start-ups who signed up with us in the recent weeks.
I have been to several business transformation seminars, especially the expensive ones at posh hotels where business gurus in fancy suits promise utopian formulae’s to cut costs and create profits; where celebrated business consultants and management experts talk about Darwinian “Survival of the fittest” - that all companies should “innovate”, cut “costs”, think “outside the box” and hire “the best talent” if they wish to weather this global crash.
What they conveniently ignore and sidestep is the fact that every god damn thing they talk about requires MONEY. For example, it’s impracticable for any company to retain its best talent that would lead the innovations when you have to thrive in a cutthroat atmosphere where it is critical to preserve liquid cash and cut costs. Bright employees deserve and demand more and if a company can’t fulfill their wants and needs, they would inevitably leave. No matter what many wish to believe, this recession want go away soon. It will accelerate the demise of all companies short on cash as credit is a now an expensive and rare commodity these days.
I can vindicate my argument. I personally know at least three companies including a loss making competitor who seem to be completely unscathed by the slump as they are well-funded and moneyed with cash. A former colleague - David works there. I recently met David who is now a Senior VP, and in all frankness, he admitted he was blessed enough to work there. Even though his company was unprofitable, he said their investors were still quite confident on a turnaround and were also willing to pump in more money if it warrants. Lucky them!
I was genuinely impressed by David’s candor. You don’t find many ex-colleagues who speak the truth especially when you are the competition. So without further ado, how should a company survive? Maybe, get fluky and win a lottery or go hunting for a loaded investor who can bail you out. You could then perhaps, write “Survival of the Richest”!