Economic dislocations like the one we're currently experiencing, while painful, are healthy. They are the natural, salutary, built-in responses of economic, political, and social systems to the stress of unnatural rates of growth.
In my last post, I wrote that it is our belief about our challenging circumstances right now, not the circumstances themselves, that will determine our success as leaders. In this post, I go one step further. I believe that economic dislocations like the one we're currently experiencing, while painful, are healthy. They are the natural, salutary, built-in responses of economic, political, and social systems to the stress of unnatural rates of growth.
As I write these words, the US stock market has entered bear territory. Historic inflation, global supply chain issues, the lingering effects of the pandemic, and the bursting of a bubble fueled by excessive government stimulus and unsustainable private and public company valuations are causing leaders to reevaluate every aspect of their businesses. I have lived and led through the past several downturns, and I've had my own career upended by economic disruption. We can and must attend to the very real human costs that accompany economic recessions. And yet, these inevitable dislocations represent unique opportunities to reevaluate business models and personal careers. Economic crises allow (indeed require) leaders to challenge all aspects of their strategies, cultures, and business models. Individuals have the opportunity (indeed may be forced) to confront their own career plans as they will be asked to do more with less at a time when people already feel stretched and overwhelmed. Is this what I really want to do? And if so, how do I need to evolve so that I have the capacity to deal with greater complexity and uncertainty?
The hard questions being asked by businesses and individuals right now are a good thing. They demand a certain level of thoughtfulness and rigor that doesn’t come naturally in times of exuberance and growth. The result is the reallocation of our precious sources of capital – financial and human – to the right uses. Some of the most rewarding moments of my career have been in times like these. As challenging as the next 12-18 months may be, I look forward to them. This is what leadership is. This is why I lead.