Monday, December 8, 2008

How NOT To Think About the Recession

A success coach named Della Menechella is recommending formula for thinking about the recession that is fundamentally unsound.

Her advice is rooted in the sandy soil of many years of easy times, times that have come to an abrupt and surprising end. There is more than a little economic illiteracy underlying her assumptions. Yet, it is the approach most Americans are comfortable with: if I look ahead and stay positive, things will stay essentially the same, because I am a successful person.

But that is not what a subset of Americans I call "super-copers" does in a crisis. Research over many decades shows that decisive, resilient people, be they CEOs or widows, FACE UP TO threats and crisis, go through (and get through) a phase of panic and depression,and shore up their situation against the threat. THEN AND ONLY THEN do they look to the future, and what they do about it is different too.

But before we get to that, I need to debunk the pervasive view that Memechella's article passes off as sound advice.

I want you to not only stay afloat in the difficult year ahead, I want you to thrive. So let me help you recession-proof yourself by helping you replace soft thoughts such as hers with robust, resilient, recession-proof thinking.

ADVICE: Don't read news coverage of the economy.
Everywhere you turn you hear that we are either heading into a recession, we are already in a recession or we are on the brink of a depression. It is enough to make you crazy. While it is true that we are experiencing financial challenges in our world today, it is also true that the constant talk about financial ruin is helping to create those very conditions.
WRONG! Make sure you understand what is going on, and once you have formed your opinion, then control your daily news diet or eliminate it. To just turn away because "it makes you crazy" prizes mental confort over honesty.

ADVICE: Don't let fear stop you from spending.

When people only hear about how bad the economy is, that layoffs are imminent, that we are going to have money problems for months, if not years, they become fearful of spending money. When people don’t spend money, the economy worsens. It becomes a self-fulfilling prophecy.

WRONG! Confidence and trust are essential elements of any economic system. Consumers lack confidence in their job security, their investments, their housing values. Cutting back spending is prudent advice. This recession is caused by excessive consumer debt-fueled spending that is no longer sustainable. Retrenching consumption is part of the solution, and it will take a recession to achieve it.

ADVICE: Don't worry because you will be one of the lucky ones.

Whatever success you are currently enjoying is yours because of who you are. It is not an accident....Just because the economic conditions are changing, that does not mean that your success is about to be pulled out from under you. You have a consciousness of success and that will help you to find success in the evolving economic climate.
SHALLOW: What if you are not? Are you willing to assume once a winner, always a winner? The economy is not growing. Those who were successful for the 20 years when growth was easy are not necessarily of the temperament to succeed in a recession. (That is the point of this whole article, really!). Some investment advisers do better in bull markets, others in bear markets. Not many do well in both, because each kind of success requires a different kind of thinking. Since this will be a deep and long recession, wouldn't you like to learn more about how those who prosper in a recession do it?

ADVICE: Think it and it will be so.
Continually hold a picture of yourself being successful in your mind. See others offering you wonderful opportunities for which you are abundantly rewarded. Does this seem like a fantasy? It isn’t. It is a very powerful success practice....By continuing to hold a success picture in your mind, you will unconsciously be sending out signals to others that you are a success. Your continued success is sure to follow.
PUH-LEEZ! It's hard to know where to start on this one. First, success in business always starts when you provide value to someone else. The resilient thinker asks: how can I increase my value so that when I am one of 100 applicants (instead of just one of, say 10) I will be able to bring the most value. Second, as you notice with all of these tips, they are completely self-centered, about propping up your own thinking about yourself. Resilient people are made of sturdier stuff; they act and connect.

ADVICE: Control your thoughts
I have learned from my own experience and the experience of other successful people that when we take control of our minds, we take control of our destinies.
YEAH, AND THEN? Of course we have to control our thoughts, not take counsel of our fears. But that is just the beginning.

This recession is full of opportunities for growth and joy. They won't be the same opportunities that we had in the last 20 years, which were amply funded by a debt-inflated economy.

Everyone to a person will face a decline in their financial well-being. Some of us, like this writer, are so wedded to identifying as "successful" that we may cling to appearances rather than accept our losses with grace and move on to the next part of life.

But the resilient thinker -- whoa, she is off for a wonderful adventure that depends more on her imagination and guts and less on her bank account. Ah, but her story is another blog post away.


Elizabeth (Beth) LaMie said...

I lke the formatting you use in this blog. It makes it much easier to follow your main points. Once again you have an article that is both relevant and useful in this uncertain economy.

Conner Coaching said...

Hi Sue, I see ur on twitter and decided to check out your blog!

You and I are on the same page when it comes to making informed decisions as opposed to burying your head in the sand. Excellent work!