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October 07, 2009

Live from World Business Forum: Apocalypse Now Has Become Apocalypse Put-On-Hold

The science fiction flashing of green lights, and the collapsing of mountains and overflowing of oceans and rivers until cities are engulfed, won't happen—at least for now. It may have seemed like the end of the world a year ago immediately following the financial collapse, but thanks to government intervention, the end isn't quite so near, economist Paul Krugman said this afternoon at the World Business Forum. "Apocalypse Now has become Apocalypse Put-On-Hold," he offered with as much optimism as he could muster. 


The great thing about Paul Krugman is he doesn't pretend things are OK. If it made you feel better to think how lucky we are compared to the Great Depression, you may want to reevaluate those feelings. It's better in most ways, but in the case of world trade, the topic Krugman focused his talk on, it's worse. With world economies more integrated than ever before, the "synchronized financial crisis" that hit a year ago sent global trade plummeting in an unprecedented way. It's "fallen through the floor in a way that's never happened before, including during the Great Depression," he said. 

He showed us a chart with one line denoting world trade before and after the Great Depression and another denoting world trade before and during our own era's crisis, and what we saw was bleak. Our world trade dip was, indeed, worse, and what's worse, our world trade recovery appears to be going slower. 

Over the last 10 years nearly every company I wrote about described itself as "global."  I never knew what they meant by that term, and whether they could truly afford to be an international company, and, if they could, whether it would even make sense for their niche in the market and company profile. Now I'm especially curious about the allure of labeling your company "global."  

First, why would you want to given the crisis global trade is up against, and second, if you really are a global company, how are you currently coping?  Would it be a good time to emphasize a different part of your strategy?  

From a workforce management perspective, how do you continue to keep your employees thinking globally when you may have needed to pull back some of your global resources and investment?  One idea is to continue brainstorming global strategy even if you're not able to immediately implement the plans. It's important to show workers laboring under a hiring and salary freeze, and being told "no" all too often to ideas that would cost your company money, that their ingenious, big picture thinking is still welcome, and that as soon as possible, your executives will begin looking for ways to reinvest or continue their expansion abroad. 

In addition to continuing to encourage global thinking, consider reinvesting in prudent trips overseas. The last thing you want is to develop a next generation of leaders who are provincial. You don't currently have the budge to send them on business trips to China or Brazil every month, or even every few months, but what about twice a year for your budding leaders? Instead of reserving travel during the current crunch for top executives only, extend the global education where it's needed most—to those who will lead your company through, and hopefully beyond, the global recovery. 

It may be time for a global trade mentorship program at your company in which 100 or so (depending on how big your company is) top up-and-comers are invited to tag along with executives on trips overseas. Beyond accompanying executives on the trips and during the meetings, these junior global mover and shakers would sit in with the same executives before and after the trip to hear about and contribute to the global game plan. 

Your first priority is survival through the "recovery." But if you pull back on your global expansion and investment to a degree that's too sharp, and smacks of fear, then ultimately you'll box your company in with young leaders too provincial to understand how to grow globally when you're finally able to. Apocalypse Deferred will morph back into Apocalypse Now, with new executives suffocating in the tidy domestic business boxes you created for them.  

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