[Recession Recovery] ‘VW’ Ride Coming?

Posted on | September 25, 2009 | 2 Comments

Great Recession - are we in for a bumpy VW recovery? “What kind of recovery does the group expected now?” – this was the key business question asked by a Partner in a Toronto based mid-sized accounting firm in the group discussion phase of the TEC Trusted Advisor meeting I attended earlier this week.

Here’s what came back from the employment lawyer, commercial landlord, retirement pension consultant, marketing consultant, headhunter, and finance and financing consultant.

4 Great Recession Recovery Scenarios

We face uncertain times and there are a range of potential recovery scenarios:

The ‘V’ Recovery – the typical post WWII one we’ve come to expect

This recovery is characterized by a sharp downturn and a confident rebound – what you might call: short term pain but long term gain.

The ‘W’ Recovery – the choppy one

This recovery is characterized by a sharp downturn but an unconfident rebound that is full of set backs – what you might call: one step forward and one back, never seemingly getting all that much real long term gain.

The Reversed “” Recovery – the ‘dead cat bounce’ one

This ‘square root’ recovery is characterized by a sharp downturn followed by a recovery that levels off at a new lower level of economic activity – what you might call: get used to having less.

The “VW” Recovery – the ‘excessive hope’ one

This recovery is characterized by a sharp downturn and an over confident rebound that leads to a continuing series of false starts and set backs – what you might call: misplaced hope for an early return to long term gain.

Recovery Pros & Cons

The factors arguing for a sustained recovery are:

the stimulus spending by governments world wide is boosting confidence and driving economic activity the group chair reported
new-hire executive contract negotiations are on the rise the employment lawyer reported
other than in Calgary, no commercial real estate vacancies of note the commercial landlord reported
business is decent to good reported the headhunter
the stock market has recovered a whole bunch reported the marketing consultant
pick-up demand for new cars expected to start taking hold before year end the finance and financing consultant said

The factors arguing against a sustained recovery are:

the stimulus spending is close to running out the group chair suggested
unemployment is expected to run higher the employment lawyer said
consumers are sending less because those who are still employed are paying down debt or saving more should they too lose their jobs mentioned the finance and financing consultant
government leaders and central banker always over play positive news commented the marketing consultant

Group Conclusion

Everyone in the TEC Trusted Advisor Group expressed caution and skepticism about any quick or direct return to happy times. Our general conclusion was that we should embrace the third millennium’s new normal: too little economic vitality, and too much uncertainty and sectoral hardship. So, get ready, we’re likely in for a VW ride!

© Blog.TonyJohnston.biz & Compass North Inc. 2009

Article by –

© Blog.TonyJohnston.biz & Compass North Inc. 2009

Article by –

Tony Johnston, CMC, CGA, MBA, BA (Econ)
President
Compass North Inc.
18 Balding Court
Toronto ON
M2P 1Y7
Office: 416-342-5652
Mobile: 416-346-4140
www.CompassNorthInc.com
www.CNiRapidResearch.com

Tony Johnston is a results-oriented executive & management advisor with success in 4 turnarounds and many significant other business accomplishments to his credit who helps companies drive:
› top line growth (revenue)
› bottom line improvement (profits)
› cashflow management (credit line control)
› growth strategy (more / new)
› financing & stakeholder relationship management (debt / equity)
› enterprise value maximization (mkt price)
› acquisition planning & execution (find / close)
› divestiture preparation & execution (prep / negotiate)
› information gathering (competitive intel / market research)
› crisis control (turnarounds & wind-downs)
› enterprise leadership (CEO / CRO / CFO)

Compass North Inc. is a management & advisory services firm that helps companies access and use money brilliantly so they achieve important, challenging goals. Examples of what we do include helping companies and their owners:
– make better decisions by providing customized competitive intelligence,
– grow by crafting strategic plans and implement them,
– get turned around by dealing with their debt or other business problems,
– borrow more money and/or raise more equity, and
– plan, prepare, negotiate and close acquisitions, divestitures and ownership
transitions.

Bottom-line: The benefit that Tony and Compass North Inc. deliver is helping company owners maximize both what they earn while they own their business and what they bank when they sell.

> Follow me on Twitter @CompassNorthInc

Comments

2 Responses to “[Recession Recovery] ‘VW’ Ride Coming?”

bizsugar.com
September 25th, 2009 @ 2:05 pm

[Recession Recovery] ‘VW’ Ride Coming? | Biz Money Matters |…

What kind of recovery should we expect now from the Great Recession? This is a key business question of interest to business leaders everywhere. What do you think? To find out what one group of senior business leaders and consultants thought as of Sept…
Donald
September 29th, 2009 @ 6:15 am

Hi Tony -
I’ll be looking to buying a new VW Golf, I guess: they’re quite efficient and economical to operate. Puns aside, it’s an interesting paradigm that you chart out and I think all businesses should be ruled by an ‘a lot with a little’ mentality for the near future, big recovery or no big recovery.

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Tony Johnston
President
Compass North Inc.

Tony provides executive management and advisory services that help companies get MORE !!

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financing / exit valuation

Tony delivers the leadership or leadership support needed that can make remarkably outstanding results happen operationally, economically, financially and in the eyes of customers, lenders & transaction counterparties.

If you are a decision maker in a company that wants MORE, give him a call at 416-342-5652 or check out the Compass North Inc website [click here].

Tony's ability to help companies achieve important/challenging goals is well demonstrated by his long record of success, which includes:
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  from biotech cofounded & lead
  as CEO
- $12 mil/3x investment gain
  in 2 years delivered for
  VC partners
- $2.5+ bil in public & private
  market debt, equity and
  M&A deals done
- 1 successful company IPO
- 4 new businesses organized &
  grown: Biotech; Securitization /
  Mortgage Servicing; Third-Party
  Logistics (3PL); & Consulting