.

A Consultant's View

Prairie Trail Software, Inc. ............................................................. May 2009

The Paradox of Economic Recovery

The local newspapers are trying to call for recovery. The business pages point to up ticks in the market as signs that we might be in a recovery. They point to certain banks actually having a profit as proof that "things might be turning around". They are desperate for some signs that the end is near. Unfortunately, their hope won't be fulfilled.

It is one of the paradoxes of the human condition that when we have such a bad economic downturn, we won't have recovery as long as a lot of people are searching for that recovery. Why is that? We are in a major restructuring of our economic system - these happen on a regular basis. But, each restructuring will require major changes by many people in our society. But, people are not willing to make these difficult choices as long as they have hope that the situation will "recover". We all would like to continue to operate like we did before.

As humans, we like to have things "the same way". Just look at how neighborhood associations try to keep out developments or try to manage what people can do with their homes. People do not like to change.

However, the world is not static. It changes year by year (and sometimes month by month). It changes economically, politically, and our environment changes year by year. If we do not change, those changes will add up to be enough to either destroy us or leave us in the dust.

There are a number of small towns in Europe that have a medieval town square. Those towns were prosperous back then, but failed to participate in later prosperity. For example, Bruges was a major trading town in northern Europe and became wealthy through that trade. They built a fancy square. However, they failed to respond to the river silting up and the trade moved on. The town was an economic backwater till tourism found it again. Similarly, Japan has been criticized in the economic press for not taking the painful steps to change their economy after their stock market crashed. The result has been many years of stagnation.

It is very difficult for people to make major changes. Instead, we drag out the decisions we need to make and drag out the time it takes us to do the painful changes it takes to have an economic renewal. If we see hints that things might "recover" to how they were before, we put off the changes we would need to make. Thus the looking for recovery delays the real recovery.

Because the changes needed are not enjoyable, many people and many companies need help in making those changes. This is where bringing in a consultant can be helpful - helping you identify those changes you truly believe that you need to make. If you would like that help, give us a call.