A 35,000-Foot View Doesn’t Show the Recession Ending. How Can We Succeed?

I just reviewed a number of unrelated research documents that show a common thread: The light at the end of the tunnel isn’t very bright. Review the facts, and then decide what you can do about it.

The Selling Power 500: More salespeople, a drop in sales, and lower productivity

I just received the preliminary numbers from our own research department. Every year we identify the largest sales organizations in America. We rank sales forces by the number of salespeople they employ. The good news: The SP500 companies employ 1.1 million more salespeople for a total of more than 21 million employed. (Drill down and you’ll see that this increase came mostly from the direct-selling industry). The bad news: The SP500 companies’ sales volume was down $600 billion to a total of $6.4 trillion. More bad news: The service sector showed a 14.3% drop in productivity per salesperson. The final report will be published in the October 2009 issue.

Silicon Valley - the cradle of creative business bubbles and sharp investor needles.

Today’s San Jose Mercury News reports that 20.5% of Silicon Valley’s commercial real estate is vacant. The cover shows empty buildings as visible monuments of layoffs and mergers and dashed hopes and dreams turned into nightmares. The skinny newspaper underscores the miserable July unemployment rates of 11.8%. In Palo Alto, there are people sitting at a small Starbucks checking job sites on their computers. There is no big lunch crowd at the Four Seasons in Palo Alto. A year ago, it was a hot place for deal makers.

The job market is not improving. Productivity is up, but pay is down.

According to the US Bureau of Labor, the number of job openings in the US has declined by 1.3 million in 2009 compared to this time last year, which represents a 33.6% drop in job opportunities. The number of people hired was the lowest since 2000. When you dig a little deeper, you realize that American workers produced 6.4% more goods and services in the second quarter of 2009 than in 2008. But the unit labor cost fell by 5.8%. This means that the employees who remained on the payroll are making up the work performed by those who have been laid off. Since many companies had to cut pay, it means that the extra work yields a smaller paycheck.

Fake work: work that creates no value.

The recession has caused more useless meetings than ever before. Today’s purchasing process involves more people, absorbs more time and often leads to a “let’s wait” decision. "Analysis paralysis" has become the norm, not the exception, in many companies. What’s paradoxical is that companies that brag the loudest about creating value for their customers are often those who diminish the value of their employees by having them jump through an endless series of hoops before they get clearance on any initiative that involves spending money.

Employees are experiencing increased financial stress.

According to a recent research report by Financial Finesse, the signs of an economic recovery on Wall Street are not showing up on Main Street. Here are a few alarming findings:

More people were worried about their finances in Q2 than in Q1.

More people experienced high or overwhelming financial stress in Q2 than in Q1.

A friend in New York, an executive in the financial services industry, told me that his company has laid off 60% of the staff and changed the compensation package to commission only, which caused him to reduce his personal expenses, dip into his pension fund, brown-bag lunch, stop eating out, and defer the planned summer vacation.

Gallup tells us how happy or how stressed we are in America.

The Gallup Organization measured "the percentage of Americans who, reflecting on the day before they were surveyed, say they experienced a lot of happiness and enjoyment without a lot of stress and worry." Gallup also tabulated the percentage of people who say they "experienced daily worry and stress that far outweighed their happiness and enjoyment." Here is how happy/miserable America was on August 29th, 2009:

Fifty-six percent of people said they experienced a lot of happiness and enjoyment that outweighed their stress.

Ten percent said they experienced a lot of stress that far outweighed their happiness.

How can we succeed in this stressful, negative, and irrational environment?

First: Think your way out of the box called recession. Adversity is nothing but a wake-up call for creativity. Necessity is the mother of invention. We live in a time that makes it necessary to reinvent ourselves and our strategies, and it begins with our thinking.

Second: Increase your emotional fitness. Accept what you are powerless to change. Don’t stew, go out and do. Action creates motivation. Apathy gets you nowhere. The upside of disappointment is that you can turn it into the cradle of ambition.

Third: Our future doesn’t depend on today’s circumstances; it depends on the choices we make today. Nobody can take away the power of choice. We cannot choose the direction of the economy, but we can choose the direction of our thoughts.

Fourth: We are stronger than we believe we are. One of the biggest challenges we face is to let go of the mistaken notion that life is too strong and that we are too weak to succeed. What do you think is more beneficial, buying into your fear of failure or selling yourself on your capacity to succeed?

Fifth: Success is a game of confidence. We all gravitate toward people who have great confidence. It doesn’t take a huge amount of confidence to succeed. All we need is the confidence to take one step forward. Once we complete that step, we can reinvest the same confidence into the next step.

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[Beth N. Carvin]

The great thing about sales is that good sales people are always in demand. If you become the best of the best you will never want for a great opportunity.

From an organization perspective, an economic change is just a shift from A to B. Smart companies don't look at is as good or bad - it's just different. The needs of our clients and prospects change when the economy changes. It's our job to identify the new needs and re-tool our offerings and our presentations to meet those new needs.

Stay sharp, be creative and you'll be the one in your industry to come out on top.