Recession: Is it a state of mind?

December 22nd 2008, Christmas celebrations in London like many other cities in the Western world were muted – The all pervading sense of gloom was palpable. .The weather was bitingly cold, December time UK climate can be very frustrating. Stephan Raj was looking at the signboard “Closing Today – Must Sell” outside his Asian Store. He was seen thanking his son Michael who had just finished his MBA from a top notch B school in Pennsylvania state, USA for the timely advice he gave one summer evening in the month of June 2008.

Stephen is a Sri Lankan Tamilian by birth and had sought asylum in UK in 1986 when the Eelam war in his motherland forced millions to take refuge in European countries. He thanked his stars for having found a right mentor in Chandra Nadar – a retailer by profession in East Ham. Nadar taught Stephen the tricks of trade and sold the shop to him when he decided to move to Australia to settle with his children. Stephen did not have any formal education and everything he came to know was from his mentor. Nadar had taught him that the key to success in Retail is “AVP”. He followed this mantra religiously till June 2008. Stephen never showed any interest in business affairs or world news but for keeping himself updated on the Eelam War. His heart was always with fellow brethren fighting for what he thought were their just rights.

His philosophy to run a successful store is to ensure that products needed by the customers are always “Available”, kept “Visible” at the right place and store is “Presented” in a clean manner. Customers who walked into the store always left satisfied since they could always get what they wanted and there were never “stock-outs” in the store. He knew that he was serving a large South Asian community with a mix of Sri Lankans, South Indians and Gujaratis and he also had loyal patrons from local Brit population even though their numbers were dwindling every year. The racks in Asian Store would always be full and he was a nightmare to retail giants like Tesco and Sainsbury in East Ham area of London since he was doing better numbers even though his store area was much less.

Financial Markets all over the world were in a tizzy by the middle of 2008 and there were talks of recession all around and just then Michael came back after completing his MBA in Finance. He told his dad that it would take few months for him to find a job in Investment Banking firm since all the companies were downsizing. He was shocked to see the stacks at Asian Stores full although he could spot a lot more customers in the store compared to other places. He rushed to his Dad and told him, “Dad, Aren’t you aware of the impending recession and you are still ordering so much stuff and stacking it full”. He told Stephen about how the banks are closing down and how employees are losing jobs across the globe due to Financial congestion. He said people’s buying power is coming down everyday. He instructed his father to reduce the inventory dramatically. Stephen being an uneducated person found sanity in the words of his son and ensured that his orders remained bare minimum. More and more customers left the stores with dismay saying to themselves and their friends they did not get what they wanted and the numbers were dwindling. Finally it led to Stephen Raj deciding to close down the store since he found it unprofitable to run the store with such a less patronage from his customers. Stephen was thanking his son for saving him since he was sanguine that all the stocks in the store would be sold by EOD and his losses would be minimal.

I would like to ask you if Stephen closing the shop was a result of state of economy or his mind being influenced by his son. Economic recession is in our circle of concern but our thoughts are in our circle of influence.
Case in point from personal experience: It was in 2007 that I began my training at Europe for a single client and to execute the training I made a few trips. By the middle of 2008, I could see the potential in a tiny nation called Gibraltar and decided to start Training operations in October. Many of my friends were of the view that since recession had hit UK very hard it was not the right time to start and were giving doomsday predictions but my logic was simple.

If I can offer a value for money proposition in training people and convince the clients that Quality & Value of training from me would be of Global Standards then this is the best time for the clients to choose me. I went about demonstrating my training skills and the results that can be achieved. On my first pitch that I gave at a meeting organized by Gibraltar Chamber of Commerce, one of the largest Sports bet company in UK and the world’s 7th largest Accounting firm signed up with us and we have been adding clients since then. World calls it a recession but it is up to us to process the same as a recession in our mind or an opportunity to encash. No wonder history says many billionaires are born out of every slowdown.

Again when I came back to India in November many of the large corporates said they are canceling all training projects due to budget cuts. I knew I am going to be left with no business from the market that we were serving for over 8 years. Looking at the business climate I realized that companies which were actually reporting better numbers even when BSE Sensex was crashing were the PSU Banks and I directed my energy towards getting a big assignment from this sector that was never on our radar. Within a span of few months a large PSU bank gave me a project to train over 1500 Managers on Managing Change & Innovation across the country.

Again let me repeat “Economic Recession is not in our control but our state of mind is in our control”. Refuse to take the former as an excuse and look for an opportunity and we shall get one.

When we hear the Finance Department of companies saying that we are going to announce huge budget cuts, what do you think the sales guys in your company are saying? They would take this as an excuse saying all my clients are also announcing cuts and hence we cannot meet our targets. Just change the language instead of saying our budgets are going to be slashed announce we are going to be more prudent in spending and economy need not drive prudence in spending for I believe that should be a constant striving.

It is said “As you sow, sow you reap”, same way as you think, so you act. Hence let us decide to think differently and irrespective of economic situation let us look for opportunities to progress. I believe Recession is as much a state of mind as much as a state of economy and Abundance is also a state of mind as much as state of economy. Process Abundance in thinking and shun the other one.

Wishing you an year of Abundance of Bliss, Peace, Good Health, Love, Wealth & Spiritual Energy.

Loving you.

JVC Sreeram

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