Having been around for a few decades I’ve experienced several recessions first-hand, unlike the current ’30-something-year-old’ whiz kids who were probably only about 15 years of age when the last recession hit in 2008/9 and not even born when the early 1990s recession took its toll. So instead of being apologetic for being a Boomer, for once it’s nice to be able to share some insights from real-world experience when I was a 30-something-year-old in the 1990s recession, when this generation mostly wasn’t even born.

A potted history of recent recessions

Speaking of not being born in the early 1990s, the internet as we know it hadn’t been born then either! That recession came hard on the heels of the 1987 stock market crash which came just as New Zealand was reeling from significant reforms introduced by the Labour Government in 1984, with massive unemployment and a huge loss of investment wealth. Unemployment rates were over 11% at their worst in 1991. By comparison, unemployment rates peaked at 12% in the Great Depression in 1933! NZ’s unemployment rate is currently around 3.4%.

Economic recovery began at the end of 1991, though there was a brief hiccup experienced in 1998, but overall strong growth continued for the next decade. Our inflation rate in 1990 was 6.10% but had dropped to 2.60% later in 1991.

Thinking back to those days, pre internet, we just had to ride it out and look at different ways to make (or save) money – using technology, as we know it today, wasn’t an option, though for NZ, we were about to enter the www space a few years later, which changed the landscape forever, though it didn’t come without a few set-backs too.

The dotcom crash of 2000 was pretty predictable and not that different to what is happening today - it was triggered by the rise and fall of technology stocks. Back in the day, investors were quick to pour money into start-up companies. Said companies rarely had a business plan, product or track record, so failure for many of them was inevitable.

The tech boom was also fuelled in part by preparations for the new millennium, where dire Y2K predictions had been made about technology not being future-proofed for post 2000. While this was a world-wide issue, the preparations in New Zealand for Y2K were driven largely by the National Government of the day…

“Parliamentary preparation for Y2K began as early as 1998. That year, the Government Administration Select Committee conducted an inquiry into the potential effect of the ‘Year 2000 problem’ on the public sector.

The committee concluded that “the Y2K problem is one of the most serious problems facing New Zealand business and the global economy,” and if nothing was done to minimise the problem, public safety could be at risk. As a result, it recommended the creation of a Year 2000 task force and a national media campaign.

The parliamentary precinct was the base for Y2K preparedness monitoring agencies from 31 December 1999 to 1 January 2000. Working out of a ‘bunker’ in the Beehive, the Ministry for Emergency Management operated a national monitoring centre, assessing incidents related to the millennium bug as 2000 approached.”

Source: https://www.parliament.nz/en/get-involved/features/20-years-on-y2k-and-the-new-zealand-parliament/

Of course, the critics were quick to point out that it had all been a waste of time and money when 1 January 2000 clicked over without issue, but those working in the sector claimed that this result was largely due to all the work that had been done in preparation for it.

The 2008 Global Financial Crisis actually started in 2007 and came about largely by greed and a downturn in the US housing market which resulted in it crashing under an overwhelming load of mortgage-backed securities that had bundled high-risk loans. The financial crisis spread from the USA to the rest of the world through linkages in the global financial system. There was a lack of regulation in the US and European banking sectors, which saw many banks worldwide incurring large losses and many relied on government support to avoid bankruptcy.

While NZ’s economy was seriously impacted, we escaped the worst of it, mainly thanks to the financial regulations in our banking sector, however it did impact on unemployment which increased from 3.6% at the end of 2007 to 6.1% in 2010, and hovered around 6% until 2013. By April 2009 our Official Cash Rate was slashed by 5.75 percentage points to 2.5%. Our recession officially lasted from March 2008 until June 2009, however the effects were felt for three and a half years after the initial onset of the official recession.

Back to the future

As we face the latest impending recession in NZ we are aware of the many layoffs happening in the tech sector worldwide, which appear to be largely as a result of the fallout from Covid. The US economy contracted because of the Covid shutdown in March 2020, however that didn’t stop the US tech giants from taking on more staff to meet the change in demand from a society in lock-down.

Unplanned expansion in technology took the world by storm in reaction to the Covid pandemic, along with cheap money being available during the worst of the ‘locked down’ era. When the world switched from using ‘shop fronts’ to ‘online’ to do their business in 2020, supply couldn’t keep up with demand. This created huge opportunities, especially for tech development, distribution, marketing and communications. There were headlines everywhere of massive labour shortages and jobs were being created at a rapid pace. Growth was phenomenal.

Then, in 2022, the world started opening up again and surprise, surprise, people started going back to the shop fronts to do their business. After several years of being locked down (or restricted) and relying on technology such as Zoom to meet and communicate, and using social media to stay connected with their communities, people wanted to be face-to-face again. Many of the early lay-offs happening in the tech space affected distribution and marketing channels. The current ones affecting those in the IT development space are probably as a result of ‘right-sizing’, rather than ‘down-sizing’.

Added to the mix, in early 2022 Russia invaded Ukraine, which has created supply issues and huge increases in the cost of energy and some foods, such as grain, world-wide, which in turn has fuelled inflation. In order to tame inflation, the cost of borrowing money has sky rocketed with western governments trying to cool spending. This has a flow-on effect for everything - wages, transportation, mortgage interest payments, food, energy etc.

In New Zealand, add in a few natural disasters to bump up insurance premiums and the horrendous cost and drama to rebuild, and instead of living in what was once ‘God’s Own’ we find ourselves living in the perfect storm, economically speaking.

Surviving the storm

So, after all the doom and gloom above, how can we survive the next months (hopefully not years) of recession? We should all know the answers to this.

Reducing debt is the obvious one, if you can, and reducing spending is also desirable, but probably unrealistic, given everything essential has increased in cost and will continue to do so.

Instead of adopting a ‘scarcity’ approach in the last several recessions I’ve lived through, the organisations I was involved with instead looked at how they could use opportunities to their best advantage. This usually involved looking at ways to offer new products or services, or how we could do things differently to breathe fresh life into what we did. Some of it was subtle and involved tidying up our collateral and systems, some of it was around strengthening our relationships, and it also provided a great opportunity to review our communications and branding. We also looked at how else we could add value to our members or customers using ‘outside the box’ thinking.

When things are busy, we rarely have time to stay on top of things, but when it quietens down, we’re in a good position to catch our breath and do all the tasks we’ve been putting off. For some of us, Covid lock-downs provided a good chance to do the things we’d not had time to do previously. But the time for spring cleaning our lives has moved on. Been there, done that. We now need to look further afield.

For starters, now would be a good time to review the content of your website. Check that everything is up to date, perhaps rearrange the navigation to make it more intuitive or easier for visitors to find what they’re looking for, and add new content, such as blogs, awards received, new photos etc. And don’t forget to update your testimonial section. If you can’t add lots of new ones, at least consider rearranging the ones that are there already. They could be displayed on a revolving banner, placed alongside your products or services, or simply re-ordered in how they display.

If you aren’t already using social media in your business now would be a good time to start, as potential customers are more likely to trust an organisation with a large following on social media, especially if you have plenty of good reviews. Social proof is more important than ever in these turbulent times as it provides emotional comfort to future customers and reassures them of the value you will provide.

With Expert’s MoST software, updating content and adding social media links can be done inhouse, thereby keeping spending to a minimum.

Depending on how old your website is, or how much resource you have available, now might be a great time to look at a reskin or a redesign of your site. Websites usually look good for the first three or four years, but after that they can tend to look a bit tired or dated. With a good design, intuitive navigation and concise content structure, a well-designed website can last for as many as eight to ten years. Like anything, a regular tweak can keep your website current, relevant and up to date.

Bigger-picture

In terms of what you can do to position your organisation to grow during a recession, rather than merely survive, bigger-picture steps include

·         Streamlining operations – look at improvements you can make for your whole organisation, not just your website

·         Innovating your culture – engage your staff to help find better ways of doing things or finding different things to do

·         Investing in talent if you can afford to – more candidates are likely to be in the market during a recession

·         Investigating mergers with similar or competing organisations – this could mean a stronger outcome for those involved

·         Bringing in experts – identify where you might benefit from a different viewpoint or expertise

·         Network outside your comfort zone – Covid and e-meetings software killed face-to-face contact; it’s time to start meeting people away from a screen

In closing

It pays to remember that recessions don’t last forever and this one will soon fade away. But don’t expect to read about the ending of the recession and the improvement of the economy in the mainstream media, as everyone knows that positivity doesn’t morph into click-baits.

As Sir Winston Churchill once said “Never let a good crisis go to waste.”. Use this ‘opportunity’ to your best advantage.