In recent times, the current economic state of the world is being references to the 2008 GFC (Global Financial Crisis). As a result, organizations should study how the economy recovered and implement the lessons we learned from the past to speed up the post-pandemic recovery.
GDP (Gross Domestic Product) is defined as the total production of goods and services in a country. The Reserve Bank of Australia explains that it can be measured in volume output (the amount of product produced), or price (the dollar value of goods produced), or expenditure on goods and services.
Despite the world in a similar environment to post-GFC, the pandemic raised a whole set of its own issues leaving a high number of unknowns left to resolve.
One of the fundamental differences in the two periods was that whole sectors of the economy were shut during the pandemic and certain goods and services simply could not be traded because governments ordered people into lockdowns and curfews.
Associate Professor Mark Melatos, of the University of Sydney, says “n the GFC case, people chose to reduce spending because they were scared. In the COVID recession, people were forced not to spend, even though they could afford to.”
Australian Prime Minister, Scott Morrison said that this pandemic recession is 30 times worse than what we saw in the global financial crisis (GFC). Treasurer Josh Frydenberg went on to comment that, “this [pandemic] has been the biggest economic shock since the Great Depression. It has created a huge hole in the economy.”
Frydenberg stated he was “very conscious” Australia is now heading towards $1 trillion worth of debt.
Lessons from the GFC that organizations can implement post-pandemic:
Keep money within the business to survive:
- The Government is more supportive of businesses by providing grants and keeping businesses open depsite lockdowns and curfews.
- The key thing was to get money into Australians’ hands immediately. This ensures the economy keeps moving and businesses can pivot their business to increase sales.
- The GFC created a swell of innovation and we can expect to see that again as companies adapt to a fast-changing landscape.
- This push for innovation will help businesses survive, and for some, it will be the catalyst for huge, market-changing growth.
- The 2007-2008 crisis created massive shifts in the way people worked and did business: Uber, Airbnb, Square, Slack, and Dropbox all launched during or just after the GFC.
- Already during the pandemic, Zoom saw sales soar 326% to $2.6bn in 2020, with sales expected to rise more than 40% in 2021, reaching more than $3.7bn.
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- Pivoting to an online offering, tweaking existing equipment or building an entirely new digital solution can create efficiencies and reveal new sources of revenue.
- Technology has a huge role to play in toning down the COVID-19 crisis negatives and scaling up the positives.
- While external marketing and messaging pivots are the most visible of these, getting your internal business management systems connected could make your ability to adapt so much faster.
- Integration, where there was none before, could dramatically improve your efficiency, save costs, improve customer service and unlock critical business intelligence.
Pivot Business Opportunities for Growth:
- There’s money and consumer need out there, you just need to work out how to win it.
- Your opportunity might be in a new target audience – socioeconomic, ethnic or community groups that you haven’t yet tapped.
Perhaps one of the most important lessons we have taken from both the GFC and COVID-19 is that nothing is permanent—the need for change and innovation is ever-present. We must adapt to every change sensibly, strategically, and decisively.
While the current crisis is different in many ways, it represents a similar turning point for Australian businesses.
In such an environment, adopting a “set it and forget it” strategy guarantees only one thing: failure. As they say, failing to plan is planning to fail.
As business owners, we need to learn from experience because history has a habit of repeating itself. Take these lessons from the GFC and see how your organization can implement these strategies into a post-pandemic world.