REFLECTING ON AUSTERITY

Long before anyone thought of fashioning chocolate into the shape of an egg, Easter signified the end of Lent, an austere 40 days of fasting, self-denial and reflection that Christians observe before celebrating the resurrection of Christ.

Religious our not, we’ve all been enjoying a bit of Lentish austerity of late, thanks mostly to our friends in the banking industry and our elected representatives in Government.  It’s almost four years since Lehman’s collapsed, ushering in an era of austerity that the sternest Catholics might consider a bit, well, worthy.

While it would be insanely and irrationally optimistic to suggest that the global economic recovery has begun, there are early signs that suggest we might be at (or just past) the worst.  If we are, maybe it’s time businesses reflected on a global economic resurrection?

Many businesses have acted honourably throughout the tough times, looking after their customers and employees as best they can.  Others haven’t.  All businesses have had to make difficult decisions – the difference is that some did so because they had to; others did so simply because they could and thought they’d get away with it.

Politicians know better than business leaders that the decisions they make today will either ennoble or bite them in the future. It’s the thing that keeps political parties awake at night.  Voters have long memories and scheduled elections help them exercise those memories.  Trying to explain away the sins of the past is a key reason electoral candidates walk the streets and knock on our doors.

Customers, partners, shareholders and employees have long memories too. Just because they don’t vote in business elections doesn’t mean they’ll forget.

If you’re a bank, did you cancel lines of credit for perfectly solvent businesses, just because you wanted to improve your balance sheet?

If you’re an IT company recruiting staff, did you treat those that applied for the jobs they badly needed with contempt, because you felt it was a buyer’s market?

If you’re a mobile phone company, did you inflate your monthly contract costs without warning just a week after a new customer signed up on a two-year contract, and then point to the smallest of small print to justify your decision?

A business’ brand and the values its brand represent should be honoured whatever the weather. Just because the economy turns stormy and revenue, profits and cashflow come under pressure doesn’t mean that brand values can be parked out of view somewhere until the storm passes.

That means that if your business brand identifies improving the experience it delivers for customers as a key differentiator, don’t jack up prices every time revenue looks likely to fall short of the market’s expectations.

If your business brand identifies people as its most valuable asset, don’t insult them with 0% pay rises simply because you know that the state of the economy makes it highly unlikely they will go on strike.

If your brand is predicated on building long-term relationships with its customers, don’t leave them in the lurch at the first sign of trouble.

If ethical sourcing and treatment of suppliers is a differentiator, don’t make your suppliers wait beyond the contractual limit before paying them simply because you know your to important for them to do much about it.

If you have responsibility for the brand or reputation of your business, ask yourself whether you business has been making difficult decisions during difficult times because it needs to, or because it can.  If it’s the latter, maybe this week is a good time to start a new conversation with your boss?  Who knows?  Maybe corporate resurrection will follow?

Share