The 2008 Election Break in Recession Turnaround Efforts

This is the third of a six part series, running this week, on why you can expect that the downturn will be deeper and longer than currently expected by most. Each day, I will post about one of the six reasons why I have come to this conclusion. Here is Reason #3.

Turnarounds are all tough stuff. And the turnaround of the U.S. economy, faced by our government, is as large and complex as I have ever seen. By far!

To stop the snowball effect of any distressed situation takes an intense effort by a group experienced and skilled in the nuances of turnarounds. The intensity of the effort needed for success cannot be overstated. Because of the snowball effect, the natural pattern is for more and more things to go wrong.

Well, speaking of going wrong….here we are at full crisis mode and voila we interrupt this for an election. An election that will result in a new President, many changes in Congress, and a whole new administration.

Even if some of the key turnaround players are retained in an unusual bi-partisan collaborative effort, our federal government is, through no one’s fault, about to have a massive change of players.

So here we have a turnaround effort that is already struggling to get traction about to enter into a period of change of hands. Ouch!

The "hands" scheduled to leave Washington in January have to be focused on their own personal situation especially with job prospects so generally poor. The incoming hands will be looking to get situated and can be expected to be cautious about making decisions for which they can later be criticized. That is a lot of focus on other than the economic crisis. More ouch!

Now, there is no one to blame for this situation. It is not anybody’s fault that the economic crisis coincided with a Presidential election. This is just the circumstance. And, a circumstance that must be factored into any assessment as to how deep and how long this downturn will be.

Turnarounds seldom, if ever, happen in a perfect situation. That is, in part, why they are so difficult to effect. That is why the snowball of problems so often continues to pick up speed notwithstanding well intentioned efforts by executives, and restructuring professionals.

And, that is why this long time restructuring professional believes the downturn will, regretfully, be deeper than most currently expect and longer in duration. I wish it were not so…and I truly hope to be wrong. Very wrong.

Up Next: The fourth of the six reasons for pessimism about the duration and depth of the downturn; Problems Causing the Recession Are Complex. Follow this series all week as I layout one of the six reasons every day. And, remember that although I believe that these are tough times, I believe that…with the right actions…the agile can prosper. Stay tuned to next week when each daily post will address specific ways businesses can prosper in these tough times.