Whilst it’s totally natural to be fearful of a recession, history reveals that innovative companies make the most of disruption. Entrepreneurs see new customer needs and wants, and create modern products and services to meet them.
The last economic downturn in Australia (and a full recession around the world) was in 2008. Companies that failed to adapt to change – like Blockbuster, Kodak, and Toys R Us, unfortunately collapsed.
It’s hard to imagine life without Instagram, WhatsApp, Uber, Airbnb and Dropbox, and yet they all took advantage of change and low interest rates during the last recession and built billion-dollar businesses. In Australia, start-ups like Airtasker, WeWork, Zoom and Go Fund Me flourished.
Further back, in the 1800’s, the USA suffered a 20-year depression triggered by the Vienna stock market crash. Companies that emerged from this tough period include Eli Lily, IBM, Merck, Gillette and J&J – now billion-dollar giants still thriving today.
In boom times, when everything is going well, few companies change or innovate, as there’s little incentive to do so. The key to surviving change is adaptation, and remaining laser focused on fulfilling customer needs.
I’ve survived a great many things in my life, and I’ve reinvented my business enough times to know how to pivot without getting dizzy. So I’m a very practical realist. But I’m an optimistic realist. Don’t get me wrong, I know that the next few years are going to be very challenging for all Australians. Complacency has been given a boot up the backside!
Technology is laying the foundations for smarter ways of working and offering a global market to Australian entrepreneurs. I predict we’ll become less reliant on imports from Asia as local producers fill the void. Interest rates will come down, taking pressure off homeowners. Retired boomers have more cash than any other generation and they’ll want to spend it while they’re still alive. Fresh-faced new dot.com-driven companies will emerge, and they’ll be keen to partner with contemporary non-profits who have great, emotive stories that inspire their customers.
Companies will need a point of differentiation, and with tighter budgets, will look for ways for their brand to stand out and resonate with consumers. I predict, due to this crisis – particularly during this isolation time - consumers will become more purpose-driven, more compassionate and seek to engage with companies and brands that align with their values. Corporate Social Responsibility and Social Good will become a strategic imperative, not an optional luxury.
Smart non-profits know that to be successful in the long term, it’s vital to balance your time and investment across three areas – short, medium and long-term income potential. So, whilst it’s vital to implement strategies for short-term survival, non-profits must take a long view as well. Corporate partnerships are a medium-term investment, bearing fruit in 8-12 months’ time. Now is the time to skill up and be ready to partner with those companies that are in the process of reinvention and creation.
Will you be partner ready?