Economic Recovery Is Coming; Are You Ready?

Might Come Later Rather Than Sooner, but You Should Have a Plan

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Phil Johnson Phil Johnson
Although I still lie to my children about my age -- I like to keep it in the 38 to 42 range -- I'll admit that I can remember three major downturns during my career. Each hit most agencies like one of those thunderstorms where everyone makes a mad dash for shelter. Agencies ultimately adapt and develop new business models and positions, but not before embracing more cautious versions of themselves rarely seen in good times. Pretty soon that caution becomes a reality that everybody accepts. What we forget is that there's a flip side to a bad economy. This may be counterintuitive, but just as you must retool your business during a recession, you need to plan for an economic recovery. I think it's time to start planning.

Maybe it's that the sun is shining, the garden is in full bloom and I'm writing to you from my deck, but I can feel the beginnings of a thaw in the air. This past week I got two e-mails that I haven't seen for a while. Both were from agency presidents looking for people to hire due to recent wins. I had lunch with a couple of magazine publishers, and they weren't crying anymore. My VP of business development says we're getting more inquiries. I know this doesn't mean the dark days have passed completely, but it did get me thinking that sooner or later there will be good times ahead. And we had better be prepared.

To a lot of people, anything looks better than the last 18 months. But there's an art to managing the transition out of a recession. First, you can expect some aftershocks. Employees who kept their heads down and worked hard may want to take advantage of new mobility in the job market. Suddenly, those people you wanted to hire aren't available. Clients that may have appreciated the cost savings you offered in leaner times may decide to do an agency review. To add insult to injury, a bunch of those tiny agencies that launched during the past two years may start nipping at your heels.

There's a bunch of stuff we can do right now to position ourselves for a recovery that goes without saying. Reward your best people, whether you can afford to or not. Focus on the work environment. When the market picks up, if your shop still feels like a 19th-century workhouse out of a Dickens novel, you can expect an exodus.

But there may be less obvious steps you can take. You should be asking: What will my clients need when customers start spending again? They may be grateful that you did some low-budget campaigns when times were tough, but they'll be looking for creative lightning and innovation when the market recovers. Make sure they know you can deliver.

It takes energy to switch gears and think about growth after a long spell of belt-tightening. Start to plan now for investments you want to make. It may be time to move on some of the technology purchases you've been putting off. And if you do want to hire people, maybe do it now. People will remember the confidence you showed by investing in them.

Look closely at your own marketing strategy and messages. What may have sounded confident and appealing for managing the downside may sound timid and small-minded when companies become more ambitious. As budgets return, clients will want more bold thinking from their agencies. You don't want to lose opportunities because you've still got a depression mentality.

In fact, mind-set may be the biggest challenge that we need to face. Congratulations, you survived. You got through the toughest economic crisis in the past 75 years. Now it's time to dust off those ambitions you had before the markets ground to a halt. Give yourself the freedom to think big.

No one knows whether a meaningful recovery will get under way this summer, or in a couple of quarters. But there will be rewards for those who are prepared. And, if we're smart, we'll hang on to some of those lessons we learned in 2008 and 2009 so that we'll be ready the next time around.

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You can follow Phil Johnson on Twitter: @philjohnson

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