How to Deal with the Daily Drama of Economic Trends

What is an Economic Trend?

You probably have a more technical definition of an economic trend than I do, but here’s mine. An economic trend is a bunch of dots. If you took all of the economic performances of all of the businesses around the world on a given day and averaged them into a single dot, then you would have the beginning of a trend. If you did that every day for several weeks, months, and years, then you would have a bunch of dots. You could then draw a best–fit curve that represents the flow of the dots. At that point you could say, “We’re heading into a recession,” or “We’re in a recession.” You could then use either of those statements to justify slowing down spending to save capital and to stop investing in creating innovative ways to add more value to customers.

I suggest you don’t do that.

The Importance of Perseverance and Perspective

The more important factor in determining your long–term success as a business is not how the dots are trending, but rather your willingness and the willingness of the people in your business to persevere and sustain your focus. Especially on creating value for your customers and prospective customers. I’ll talk more about perseverance in a moment.

The current economic trend needs to be kept in perspective. Nine weeks ago I spoke to a group of business owners at the Ritz–Carlton in Naples, Florida. We discussed the psychology of the economy. As I was talking about the impact of the recession, I almost started giggling. Here I was standing at a beautiful hotel in a beautiful city talking about a recession with a group of folks who were going to play golf that afternoon on a beautiful course.

This recession is not The Great Depression. My parents were born in 1928 and 1929. They literally grew up in The Great Depression. My grandfathers literally worked their butts off to get any money to put food on the table.

We’re still living in some of the very best economic times in the history of the world. They may not be as amazing as they were three years ago, but they are still pretty spectacular. In the U.S., we all got a little too caught up in the housing boom and now we’re paying for it. Just like when we got a little too caught up in the dot–com boom of 1999 and the gold rush boom of 1890. When we start thinking irrationally and assume we’ve found the secret to easy wealth, we do some pretty silly things and then we pay for it. But we’re going to be okay. That is, we’re going to be okay if we don’t talk ourselves out of future successes.

The Role of the Media

The media’s job is to search for and deliver information and stories. In sports, information is that the St. Louis Cardinals beat the Houston Astros. Information is not very exciting. What makes money for the media is the story that is crafted from the information. So now the media reporter has to find a compelling story to keep the interest of the viewer or reader. Consequently, we might read that Tony Larussa, the manager of the Cardinals, made a brilliant decision to bat the pitcher eighth in the lineup and it turned out to be the pivotal move in the game. (And if the Cardinals lost, the story would have been what a bonehead manager Larussa is for batting the pitcher eighth.)

The economy has replaced Iraq as the lead story in most of the media that I read and watch. And since there are a lot more media outlets than there were 15 years ago, the need for more compelling stories for the media to tell is overwhelming. As a result, we get bombarded every day with bad economic news.

Here’s my advice: don’t let the media talk you out of what you are capable of achieving.

“The only thing we have to fear is fear itself.”

That’s one of my favorite quotes and it’s from Franklin Roosevelt. He said that during The Great Depression. Recently, I thought about that quote in more depth. What is “fear itself”? “Fear itself” refers to the psychologically debilitating perspective that things are really bad and they are only going to get worse no matter what I do.

In other words, the only thing we have to be afraid of is the possibility that a critical mass of people could feel that no matter what they do the economy is never going to get better. If that happens, then we could be in real trouble. That’s called “fatalism.” When people feel they have no control over their future, they stop investing in developing themselves and their employees. They stop trying to innovate and create more value for other people. They just say to themselves, “Whatever is going to happen is outside of my control so I’m going to roll up in a little ball and try not to get hurt.” If that happens, we’re in a world of hurt.

My nine year–old daughter, Sarah, had a sleepover with five of her girlfriends for her birthday. Around 11:30 PM, Sarah came upstairs to our bedroom and said to Barb and I, “We hear keys shaking downstairs and it’s getting louder and louder.” She looked worried. So we came downstairs and looked around. After looking for burglars, we finally discovered that the noise was the zippers on the sleeping bags and the noise was getting louder the more the girls shook around. All they really had to fear was the fear they had of the noise.

The Sources of Perseverance

What are the sources of perseverance? I think there are two factors: confidence and enthusiasm.

Confidence

Confidence is the degree to which you believe you’re going to succeed in an upcoming situation. The more you believe you are going to succeed in an upcoming situation, the more likely you are to persevere.

Over the past 20 years I’ve read on average 30 books a year or approximately 600 books in all. I’ve learned so much from these wonderful books. However, on the topic of confidence, the business literature is pretty pathetic.

80% of the books never mention confidence as a factor in generating long–term success. 10% make fun of the topic and say that “confidence” is a soft skill. 5% say that to develop self–confidence you should pound on your chest and repeat aphorisms like, “I am great.” These aphorisms do not increase your belief that you will succeed in an upcoming situation. All that happens is you get a really sore chest. 4% say that self–confidence is a very important factor in long–term success, which isn’t very helpful because we already knew that. Then about 1% of the books actually talk about how to strengthen self–confidence, which is the piece that is really useful.

Strengthening self–confidence is a two–step process: review past successes and preview future successes.

Recall a time in your life when you overcame the odds and did something that you or somebody else didn't think you could do. It could be at any age level. What was your goal, what were the obstacles, how did you persevere, and what did it feel like when you won? What lessons did you learn from that experience that you could use in your current situation? Don’t just think about this exercise, actually do it. Write down your answers. Reading what I wrote will have no impact on your confidence going forward. You actually have to stop and recall one of your past success stories. Share the story with another person. Self–confidence is built on previous successes, but you have to pause long enough to actually recall those stories.

Then to tighten up your confidence, focus on a future success. Answer these questions: what do I want to achieve, why do I want to achieve it, and why do I expect to achieve it? Write your answers down. Don’t just think about the exercise.

Enthusiasm

I learned a lot from Dale Carnegie, both from his books and his classes. However, I disagree with him on one thing. He said, “To be enthusiastic, act enthusiastic.” I think if you act enthusiastic when you’re really not you will come across as a fake. People will doubt your sincerity.

I think developing true enthusiasm is a two–step process:

First, clarify the purpose of why you do what you do for a living. What is your purpose beyond the paycheck?

Second, focus everyday on fulfilling that purpose.

I’ve been asked many, many times over the past 23 years how I maintain my enthusiasm. The truth is I have a clear purpose. My purpose is to work with people so they achieve great performances. That was my purpose when I was a college soccer coach, when I was a high school math teacher, when I worked with someone as an executive coach, when I gave a keynote or a seminar, and when I wrote an article or a book. And it’s still my purpose today. I’m writing this article with enthusiasm because I’m focused on my purpose. I want you to achieve an extraordinary performance in whatever you do for a living.

Stay Focused on Your Approach

When Trevor Immelman won the Masters Golf Tournament a few weeks ago, he said that during the final round on Sunday he never looked at the leader board until he was standing on the 18th green. He said he didn’t want the results of the other golfers to affect his approach for each shot. He knew he was in the lead going in to the final round, and he had already decided on his approach to each of the holes. He maintained his focus all the way to the end.

As you look to the remaining months in 2008, decide on the approach you are going to take to deliver value to customers and then stay focused on delivering that value regardless of the results of other people around you.

Maintain a Historical Perspective

I spoke at an international sales conference last week in Nashville, and had lunch with a person from Australia. I was whining about $4 per gallon gas prices, and he woke me up. He said, “Four dollars is cheap. In Australia, it’s more like seven dollars.” Then he really hit home. A six–pack of beer in the U.S. that is $5 costs $16 in Australia.

During my seminars, I usually ask folks to turn off their cell phones. One day a man took a call and stood up. He gathered his papers to walk out. I thought, “My gosh, can’t these folks get away from work for a few hours to concentrate on their own effectiveness.” Then he said to the group, “My wife is very sick and she’s in the hospital. I have to go be with her.” Wham. Instant perspective. No matter how serious the economic trends become they are not as serious as life or death.

In order to deal with the daily drama of economic trends, maintain your perspective and continue to persevere.