There are massive challenges to get the global economy back on its feet – repairing ruptured supply chains, managing cashflows that have gone into reverse, and dealing with the ongoing issues of social distancing. None will be easily overcome, and many businesses will sadly fail.
But ultimately, history has shown that it will be sentiment that powers us out of what is being predicted as the biggest economic depression in almost 100 years. Since first written about by John Maynard Keynes, it has been widely recognised that economic performance and sentiment are directly related – whether amongst consumers or businesses. Without positive sentiment, economies stagnate, and under the current scenario, a short term rebound in activity could rapidly sink to a long-term depression.
Our recent study into the sentiment of global business decision makers reflects the speed with which the crisis is evolving. Take a look at the charts on this link and you might be surprised at the speed and scale of recovery in sentiment amongst business leaders, shown as emerging across APAC.
As this cruel virus has tracked westward across the globe, we’ve seen sentiment drop dramatically as measures to control it have been brought in, locking down economies. But as economies like China’s are opening up again, there has been a significant up-tick in business sentiment taking place over just a few days. In my view, this is just the start of a wave that will sweep east to west as lockdown effects on economic activity in Europe and then the Americas are relaxed.
How we behave and how we communicate now are critical – we either propel or kill the wave.
If positive sentiment is the way out of potential depression, the business community has a role to play in building and maintaining this wave of emotion. And maintaining communication with our markets is going to be key. I have said from the start of this crisis that historic data shows that going dark on communications is not an option for businesses that hope to emerge in a position of strength. What I am now considering is the important role of communication in accelerating our recovery by acting as an emotional catalyst to reinforce both business and consumer confidence.
This brings me back to our 4 phases of a crisis – Respond, Reimagine, Rebound and Recover. It’s so important that we don’t get stuck in the first phase of communications and we must now be actively planning how brands should be ready to move the conversation forward. We need to shift the message and tone of voice from the situational and empathetic to delivering an optimistic tone, even as far as a rallying cry.
My fear is that most businesses in the West are still focused solely on dealing with issues they face today and are not yet looking forward. The danger is that the wave of optimism subsides before we respond. We need to stay agile, lead with emotion, building the momentum and keep the wave strong and moving forward. Then, yes, I believe it will be emotion that will power the global economy out of recession.