All week we’ve been talking about the mistakes principals make in a market downturn. But there are different cycles and not every business goes through the same journey at the same time.
Topic – 5 big mistakes made in a recession
Mentor – Jacob Aldridge
- Forget the media
- The business lifecycle
- Know where you are in relation to the market
Kevin: How quick a week flies! We made that comment during the recording of these sessions. Jacob Aldridge has been our guest all week, and he’s the man behind Real Reach.
Kevin: These weeks just fly by, don’t they?
Jacob: Time flies when you’re having fun, and I always have fun getting a chance to chat with you, Kevin.
Kevin: Yeah, it is always good.
Kevin: Let’s talk about cycles, mate. Because we are talking about how many cycles there are in the market. There’d be some markets that are really booming along very well now, some that are maybe suffering. As we identified yesterday, the best time to build market share is in a downturn. We’ve talked about the cycles, but there are different cycles and not every business goes through the same journey at the same time.
Jacob: And this is the mistake. I like to simplify the economic cycle into four phases. There’s the downturn, there’s a drag along the bottom where it feels like it’s never going to change, there’s the release where suddenly it feels like there are green shoots in the economy, and then there’s the upswing that leads us all the way up to the boom which then drops down into the next down period. And so at any point in time, your market, your local economy is going to be somewhere in that journey.
Jacob: It is the case that a lot of big markets in any country will often absorb a lot of the media. In Australia, for example, you’ve got Sydney and Melbourne and what’s happening there, which at the moment is a bit of a downturn, dominates the national media. In the US, places like California and Florida come into play, South and West London dominate the UK media a lot more than what might be going on in Manchester or Edinburgh, and so you can start to buy into the wrong story.
Jacob: You can start to see like your market is suffering, just because other markets are suffering and getting all of the news when your local market might be going great, and therefore what you as a business leader need to be doing is acting in good times not in a recession.
Kevin: And, of course, different businesses will be better placed. Some might cruise through a downturn.
Jacob: Yeah, well, you and I spoke, I think it was last year, actually, in terms of how fast time flies. We were talking about the business life cycle, and that comes into play. Businesses that are above the line, that are really energised and enthusiastic. Maybe they’ve been scaling up and growing for some time, they’re going to be much better placed when the local market turns than a business that’s already in a bit of a hole or stuck in a brick wall.
Jacob: That’s why knowing where you are in the business life cycle, knowing where your market is on the economic clock and combining those two can give you a much richer picture about what you need to do with your business.
Kevin: I know. You and I talked off-air as we were getting ready for this series, and you talked about how excited you get about a downturn because you can see good businesses almost embracing it or embracing the opportunity, and that’s when people like you, as coaches and mentors, actually come to the fore.
Jacob: If you’ve got the experience … It’s an interesting thing in the Australian market, Kevin. If you’re under the age of 47 in Australia, you have never led a business through a recession, and if your accountant or your lawyer or your business coach is under the age of 50 and has only ever worked in Australia, then they’ve never actually themselves worked with clients through a recession.
Jacob: It was one of the reasons why I moved my business to the Northern Hemisphere during the global financial crisis was because I could see the opportunity to really apply what I had learnt in my training into a market that really needed it. And it’s part of the reason why I am somewhat excited about the fact that inevitably Australia will have another recession, the world will have another recession, because I know that I’ve got the runs on the board to actually help businesses through that, and so my business will grow. And, as we said, you create market share in a time when your competitors are struggling not at a time when everybody’s doing well.
Kevin: Yeah, that’s the lesson for the week. And it’s been a great week, too, with Jacob Aldridge. Jacob is the brains behind Real Reach, a great programme. If you want to elevate your skills as a leader, if you’re looking at getting into the leadership role, I thoroughly recommend you have a look at the programme. It’s almost like going to leadership university. It’s called Real Reach.
Kevin: Hey, Jacob, thank you for your contribution for us this week. I know it’s ongoing in the shows, but it’s great to have you here for a full week. And congratulations, too, on what you’re doing with Real Reach. I’m a great believer in it. Thank you for your time.
Jacob: Absolute pleasure, Kevin. Look forward to the next opportunity.