Why optimism might not be the best strategy

For the last four weeks, since it became clear what the growing impact of Coronavirus was likely to do our economy, I have had one nagging phrase going round my head. “The optimists died first”.

I wasn’t sure where it came from but I recalled a story about GIs who survived the terrible conditions in Vietnamese prisoner of war camps. 

But I couldn’t place where I’d read about it. Google had the answer of course. 

It’s almost 20 years since I read Jim Collins “From Good to Great”, one of the most widely read business books of all time. The “Stockdale Paradox” is just one small part of it but the message of survival is one that can be translated to business in times like this. And it’s one that stuck with me and helped me help my clients through the financial crash of 2008/09.

James Stockdale’s observation was that the optimists died first because they put unrealistic timescales on when they would be freed. When those timescales didn’t happen, they gave up. According to Stockdale, they literally died of a broken heart. 

The pessimists were next to go. They had no hope at all so eventually the fight drained out of them as well.

The paradox is that optimism is a necessity if your business is going to come out the other side. But it must be mixed with a healthy dose of pessimism about how long this is going to take. 

It’s less than two weeks ago that someone suggested to me that the closure of pubs and restaurants would only be for a couple of weeks. If that was true, then we’re halfway there! I don’t think so.

I’m no medical expert but you don’t need to be to realise that one of two things is going to happen. Either we go through a catastrophic couple of months with hundreds of thousands of deaths and our NHS totally unable to cope or we all stay cooped up at home whilst this thing slowly works its way through the population at a rate where the NHS is able to cope with those who are unable to fight the infection without some help. 

I think we all hope it’s the latter. But the latter means that this thing is going to severely impact what used to be normal daily life for a minimum 3 months, more likely 6 months and maybe even 12 months. Who knows? Anyone who attempts to try and put a timeframe on this is at best offering an educated guess.

And after it’s all over (and it will be over), the country may have radically altered. The choices we make, the products we buy, the way we buy them, the way we spend our time – all changed. And we may be in a global recession.

Against that backdrop, at A4G we have spent the past two weeks creating a new normal. For us this includes a 7.45am meeting (on Microsoft Teams) for our 6 Board members. These include occasional interruptions from various children asking about their breakfast and occasionally from Daisy the dog. There are new challenges every day but the service to our clients has continued uninterrupted. 

The things we are helping our clients with has dramatically changed. Ten days ago, I thought “furloughing” was something that only happened in America when the Republicans and Democrats were unable to agree on a federal budget. Now I’ve got 15 qualified accountants who are experts on it. 

But what’s your new normal? 

Or are you still trying to find it? Most owner-managers are.

Friend of the firm Steve Backley OBE recorded a little video for us (from home of course!) earlier today about the four stages of change which we think may help you get to wherever your new normal is going to be. The password is BackleyBlack. 

Wherever you are on the change model, I’d like to think we are helping you on your journey. Our new normal includes sending out technical updates on anything and everything that will help our clients from Sunday to Thursday. On Friday and Saturday nights, I get to go rogue and write my thoughts for the weekend. 

Tomorrow I will cover some practical ideas on what you as a business-owner can do if you find yourself with time on your hands. 

And then on Sunday, we will be following up our guidance earlier in the week with some of the finer details that you need to get right if you are furloughing staff next week. After that, who knows? We have at least 30 topics that we’ve been asked to cover, and we’ll try and get some content out there based on whatever we think is the greatest need.

If our articles are helping, please forward them on to other business owners you know. In the meantime, stay optimistic that we will come through this but remember this is a marathon not a sprint.

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