This post is actually a bit late for me. It’s something I’ve been talking about with friends, family, and colleagues for quite some time now but just haven’t gotten around to putting it into words. Well, I will procrastinate no longer.
I’m sure we have all come to the conclusion now that phenomenal growth, year after year, is unsustainable. It is simply unfeasible for a business, country, or anything else to continue to have double digit growth year after year and not have some sort of meltdown. While the problems that plague our economy are quite complex, one of the basic weak points in its failure is that plans were made only for continued expansion, and no one ever thought to plan for contraction.
It wasn’t just modest expansion either - no, we collectively as an economy planned for big expansion. The future was so bright that we had to wear those proverbial shades just to manage to walk out the door in the morning. People would always need our services, and markets would always be expanding. The thought that things could ever go backwards completely seemed to slip our collective minds.
Then we awoke from this dream-like state. We now realize that things can’t go up forever, and like Newton discovered almost 400 years ago, what comes up, must come down.
Companies, like ours, that lived within its means, didn’t take on substantial debt, and stuck to single digit year after year expansion just might have the fortitude to weather this storm. Companies and individuals that lived beyond their means, bought more than they could ever hope to afford, are in trouble. For years I told colleagues that slow growth was best and patient, simple business principals with low-cost but sensible means of self-sustainable would be the way to go. A lot of people agreed with me, but in general that business model was thrown out the window several decades ago.
Now I don’t want any of this to sound like an “I told you so”, because its not. But if any of what I’m saying seems to come off as that, then it’s probably repressed frustration from years of hearing about how a company like ours would never become big time because we weren’t outsourcing and taking on a huge debt load or investors to grow 30-50% year over year. Both directly and indirectly, I was told, “You’re too small”. Well, so we were. Big deal!
Now being small and agile seems to be an advantage. We’re not exposed to complex debt instruments or nervous investors. Sure, some of our clients are, and we’ll invariably suffer in this depression recession, but I don’t think we’ll be in such dire straits that many firms twice or three times our size will be.
That said, there’s no way to know what the future holds. We are all in for a rough ride for sure, but one thing is for certain: The pattern of unsustainable growth is simply not an option anymore. If you want to grow as a business or even an individual, you have to work to make it happen, prove why it should happen, and be able to back that up with the need for it to happen. The economics of my grandparents and their parents are back, and this is a good thing.