When I was young, my older brother could always outdo me in those activities kids did in the days before the internet. He could juggle, he could hacky sack, and most impressive of all he could do amazing tricks with a yo-yo. It wasn’t just that he had great yo-yoing skills—he was inherently better at understanding the trajectory of the Duncan Butterfly than I was.
I’ve often thought that his mastery of knowing exactly when and where the yo-yo was going on both its upward and downward glidepath was an innate skill that might have led him to become a great economist. After all, understanding upward and downward economic trajectories is THE significant tool of the trade for economists.
However, right now, even the best economists are struggling to understand and anticipate the wild ups and downs that our yo-yo of an economy is generating.
Cases in point: Unemployment reduction is still a massive success. Just recently, the State of Oregon reported that we have recaptured all the jobs lost during the pandemic.
However, inflation – which cooled a bit in July – roared back in August.
Yet, gas and other fuel prices have come back down to earth.
Then again, FedEx – a true “canary in the coal mine” for the national economy – made the ominous prediction during its earnings call that global spending is decreasing. The global shipping juggernaut is all but sure a worldwide recession is looming.
So what gives? Is our economic yo-yo rolling down the string toward negative territory, or is it whipping back up toward steady growth?
I hate to say it, but there is significant data indicating that our economy will give us a bit of both. And while that is better news than a full-blown recession, it means that business leaders are going to have to truly up their game in managing through the next year and attempt to navigate the path of the economic yo-yo.
Talking to local business leaders, I’ve put together some salient counsel on how to run a business during such whipsaw-like uncertainty.
One of my banker friends, Mitch Hagstrom, a former founder of Pacific Continental Bank, always advised clients that trying to go it alone during crazy economic times is a recipe for disaster. “Don’t fail alone,” he constantly advised. “You should be meeting with your banker, your CPA, and even your attorney right now to strategize for a potential recession, or a boom economy. Your team of trusted advisors are not only experts in financing, tax planning, and legal strategies, they are also great sounding boards for how your business should operate during uncertain economic times.”
In talking with Gary Rodgers, the general manager of Hole in the Wall BBQ in Springfield, his sage business advice is applicable to running a company as well as living a better life. “Regardless if the economy is going up or down, worry about the things you can control and not about the things you can’t.”
For Rodgers, and so many other restaurateurs, the incredible challenges of COVID really hammered home this lesson.
“I’ll be totally honest,” he recently told me. “I was making myself sick worrying about all the different regulations and requirements that local and state officials were putting in place during the pandemic. Then one day, it truly hit me: ‘just accept that the regulations and laws will come and simply put all your effort into what you can do to meet those challenges.’ In an instant, this weight was lifted, and I could just do my job.”
The other strategy that Rodgers employed during the height of COVID, and still uses during the challenging labor environment of today, is to collaborate with his peers in the industry whenever possible. “Everyone is dealing with the same issues, and it is in your best interest to both communicate with your peers – even if they are the competition – and help each other whenever possible. I can’t tell you the number of potential employees I’ve interviewed in the past few months who weren’t right for me and my restaurant, but who I immediately referred to other places. In uncertain times, it’s best to use your network as much as you can.”
Speaking of utilizing networks, the Springfield Chamber of Commerce is working overtime to put its network to use for all its members. Vonnie Mikkelsen, the President and CEO, spoke with me recently about what the organization is doing to help its large membership. “Locally, we observe that when the ground shifts and businesses need to recalibrate, members look to the
Chamber for support and direction,” she said. “We offer help navigating government programs, and we keep members informed about how changes will affect their businesses. We connect leaders with their peers, and we are a hub of regional resources.”
John Garbett, the Chamber’s Manager of Membership Development, is focusing the organization on providing learning opportunities to businesses to help them overcome the uncertainties of the road ahead. “We provide educational opportunities that focus on top-of-mind issues for small business. For example, in August we offered a seminar on workforce challenges, led by a senior economist with ECONorthwest,” he said.
It seems clear that we will be entangled in a cycle of up and down for the near future. To survive and thrive during these gut-wrenching times, there are a few strategies every business owner and leader can do to help smooth out the ride. Utilizing experts, staying laser focused on what you can control, tapping into your network, and seeking educational opportunities are going to be key action steps for us all.
After all, the economic yo-yo is going to go up and it’s going to go down. To remain in control, we must do our best to understand its path and prepare for its ever-changing trajectories.