Two years ago this month the world as we once knew it came within minutes of total collapse. How it didn’t happen is beyond me. But, are we in the clear? Hah! Define ‘the clear.’
I’ve been in this industry since the ‘70s, and I’ll be damned if I know the answer. What used to be cool is no longer cool. What used to be hot is no longer hot. What used to be profitable is no longer profitable. What used to be normal is no longer normal. How’s that for a definition of the present tense?
That being said, here’s what I do know; business doesn’t suck near as bad this March as it did last March. Business doesn’t suck near as bad this March as it did in March two years ago. That horrible anxiety-knot you get in the pit of your stomach when you realize you might lose everything you’ve spent a lifetime building hasn’t reared it’s ugly head in quite a while now. I haven’t lost money every day of the week for 6 or 8 months now.
Am I rolling in the dough like the old days? No. Am I paying the bills out of current revenues? Yes. Will I return to profitability? I think so. Here’s why.
In emergency response-speak, there’s a term known as an MCI which stands for Major Catastrophic Incident. Historically, all MCI’s follow a very predicable path:
Normalcy phase - you’re living your life and going about your business just like normal
Incident Initiation phase - something goes boom
Incident Escalation phase - the thing that went boom goes boom again and again (also known as the chaos phase)
Incident Mitigation phase - all responders to the MCI get a handle on it and get it under control and eventually stop the escalation phase
Damage Assessment/Rebuilding phase - it’s no longer an emergency, but it’s still a problem to be dealt with and could take months or years
Return to Normalcy phase - just what it says
Even though while occurring MCIs look to the untrained eye like total chaos, it’s not that way to the trained responders. All responders know what phase of the MCI they’re in and treat it as such. Looking back through history all MCI’s have followed this same path.
The crash of the economy and the resulting recession was a bona fide MCI, and I ran my business and changed my mind-set as such. So, what phase of the MCI do you think we’re in? Personally, I think we are at least halfway between Incident Mitigation and Return to Normalcy. That means I don’t think it’s getting worse and hasn’t for a while. We’re not back to normal, but we’re getting to that phase every day, every month, and every year.
So, how does this help you? During an MCI, you have to act and think very differently during each of the various phases. Here’s my personal path during the MCI known as the Great American Recession...
Normalcy - lah, lah, lah... Oh gee, another 100 jobs came in today. Darn, I wanted to take off early. Oh darn, I sold three things out of the case today and now have to re-do my displays to hide the holes. I hate that. Oh look, here comes the FedEx man with more work for me. No leaving early for me today. Darn.
Incident Initiation - Breaking News: “Financial Institution Bear Stearns Collapses” Uh oh, this is where the pagers start going off.
Incident Escalation - Fannie Mae and Freddie Mac collapse (boom), Lehman Brothers fails (boom again), AIG fails (boom again), the housing market collapses (boom), the credit markets freeze (another boom), the DOW drops from 14,164 to 6,469 (BOOM!). And it didn’t stop like this for almost a year. The hits just kept on coming escalating the MCI.
At this point I (like so many of you) was in total survival mode. I cut out every non-essential expense. Hell, I even cut out some essential expenses (but no, I didn’t switch from Bud Light to a cheaper beer... I still had some standards left). I stopped spending money because I didn’t know when the next boom was gonna hit. Nobody did, but the booms kept coming anyway.
Incident Mitigation - TARP, auto bailouts, layoffs, plant closings, and lots of other really hard decisions were being made to get a handle on this thing and turn it around. Eventually the big booms got further and further apart during this phase. Yes, there were a few minor booms like Dubai, Spain and Greece having their problems, but it didn’t force us to revert back to the Incident Escalation phase.
Damage Assessment/Rebuilding - We’ve been in this phase for almost a year now. Things are getting better. If you act or think during this phase like you did during the escalation phase you’re going to get left behind. During this phase I’m adding back services I cut. I’m spending money on things I wouldn’t have even thought about spending during escalation. But, I’m only spending money again for one reason... because my phone is ringing again. People are coming in to shop again. My work box is filling up again. And, I’m personally feeling good again. I never appreciated being busy like I do now.
Return to Normalcy - when I start buying Bud Light by the case again instead of by the 12 pack you’ll know all is right with the world. But, as I ease back into this thing we all want so bad, I’ve decided to make a bold move. Starting today, I’m going to buy the 18 pack. How’s that for knowing where I am on the MCI scale.
Come on 2011, let me re-introduce you to my savings account!
Chuck is the owner of Anthony Jewelers in Nashville, TN. Chuck also owns CMK Co., a wholesale trade shop that specializes in custom jewelry and repair services to the jewelry industry nationwide.