The Snowball Lesson

Today, a client senior executive expressed surprise at the fact that to-date the US government had not yet invested the first dollar in the $700 billion rescue plan. I shared that I wasn’t surprised in the least given the people and processes that need to be put in pace to intelligently administer this program. He lamented that implementation needed to happen at 100 mph less the economy slide further into the doldrums.

In fact, I do expect the economy to slide further into the doldrums because of my 25+ years of observing troubled companies…up close and personal as the saying goes. Initially as head of workouts for a major East Coast bank, then as a financial advisor to distressed companies for almost 20 years, and more recently as a consultant to leading Restructuring professional service firms, I have been involved in the turnaround efforts of many major companies.

If there is one thing I have learned about troubled companies, it is that when the proverbial snowball starts rolling downhill, it gathers momentum and thus speed. The longer recovery efforts are postponed, the longer they take to begin having an impact and the more difficult they are to implement.

The U.S. government is late in addressing the ills of our economy. The snowball has been gathering speed for many, many months. As much as I wish it was not the case, I believe that recovery efforts will take many, many months. And, more likely, it will take some years based on how long comparable situations took to stabilize in Japan and Sweden.

Devising a personal and/or corporate strategy for prosperity must begin with a realistic assessment of the likely environment in which you will operate.