Last week I attended the American Staffing Association’s Staffing World 2011 conference in New Orleans and heard a particularly interesting speaker, Zachary Karabell, an author, money manager and economist. He talked about media coverage and the effect it has on confidence – consumer, business, market, etc. One of his main points was that hearing that something bad has or might happen, or that everyone is not doing something, like hiring, becomes self-fulfilling. Our 24 hour news cycle, with its endless need to create crisis and drive ratings, may be contributing to our inability to get back on track His blog post in June, The Optimism Deficit, covers some similar territory. He writes:
“The belief that the future holds possibilities better than today is a necessary precondition to investing, starting a business and taking risks – all of which are key to a dynamic, vital economy.”
and also warns that…
“The United States, as well as the Eurozone, is mired in a funk, with many convinced that the dream is dead and the future is bleak. Both attitudes can be self-fulfilling, and in a competitive world, the optimism deficit, not the budget deficit, may be the one that sinks us after all.”
His comments are insightful and, I think, right on the money in many ways. I have a growing sense that American businesses are running scared, or rather sitting scared. I keep hearing the word “can’t” but maybe it really comes down to “won’t.” We keep being reminded that small business owners are the backbone of the economy, the biggest employers and the ones who usually create jobs and economic growth. The past few years of economic turmoil and the inability of our government to act as they should are certainly concerns. But if we wait until our elected leaders act with the good of the nation in mind and not their re-election chances, we may wait ourselves right into a worse recession. Of course we need to continue to press Congress and the President to find real solutions to some very key issues but Karabell’s speech reminded me that we hold an important part of the solution in our own hands. We can change our pessimistic attitude by taking stock of where we really are, recognizing the many real positives that exist and act with optimism as our operating principle. If pessimism can be self-fulfilling than so can optimism.
How do we put optimism into action? Well, let’s consider hiring. Can we only feel confident enough to expand our workforce after business increases? How do we expect to grow without investment? In my own business, we hired an additional 10 people over the past year and plan on hiring 10 more in the coming months. That’s a headcount increase of over 30%. I know there is opportunity out there and it would be great if it arrived on my doorstep giftwrapped but that’s not how it works. My staff was already working at capacity and we needed to bring in additional resources in order to find new business and be ready to properly serve the new client accounts. 10 jobs may not seem like many but each new hire in our economy has a ripple effect and as I wrote last week, if all businesses expanded just a little, that ripple could turn into a wave.
Is our pessimism holding us back from finding creative solutions to our problems? It’s not holding back everyone. Starbuck’s CEO Howard Schultz unveiled an innovative idea to get credit flowing to small businesses and it involves citizens lending to citizens, bypassing the banking industry. I’m intrigued by his suggestion but I’m even more impressed by his optimism and can do attitude. Instead of waiting for the credit market to change, he invested his own company’s time and money to come up with a new idea for credit. Will it work? Time will tell. But for starters, being confident, willing to think outside of the box and take a risk is something we need more of. What can you do in your own sphere of influence to help?
President and CEO