During the COVID-19 pandemic, it’s important not to lose hope in the fate of our businesses. We can still thrive during and after the pandemic. It’s because we’ve learned throughout our history that businesses overcame the challenges of economic crises. It all depends on how businesses operated and made decisions.
As the Miick Method said about businesses, it’s all about “[Working] on purpose, guided by values…to create, maintain and expand excellence. Building the brand from the inside out.” These are the most important lessons that we can learn from three major economic crises. These are the 1930s Great Depression, the 2001 Dot-com Crash, and the 2008 Financial Crisis.
The 1930s Great Depression: Frugality Is Key
Before there was the Great Depression, there was the Roaring Twenties. The United States’ economy was booming. People celebrated that wealth with decadent lifestyles. Mass consumerism created a culture of people thriving in excessive spending.
But that all came crashing down when the stock market on Wall Street crashed in 1929. It put an abrupt and troubling end to the Roaring Twenties. Because of this crash, investors lost their confidence in companies. The value of businesses declined. Production in factories had to slow down and even stop. People started losing jobs. And if they didn’t lose their jobs, they suffered from cut-down wages. The masses’ buying power went downhill.
An essential thing that people learned from this era is the importance of being frugal. They spent years living in the culture of excessive spending in the 1920s. But, come the 1930s, they were forced to cut down their expenses in every way imaginable.
Being frugal is a valuable lesson for businesses. Yes, investing in resources such as space, equipment, and human resources is crucial. But it’s also important to be very careful with our spending. We have to make strategic decisions first before we even take out some money.
The 2001 Dot-com Crash: Making the Most of Available Resources
Before the dot-com boom of the 1990s, the internet has been around for many years already. But it was only in the 1990s did it become more available to the public. Suddenly, people could have computers at home. They could access the World Wide Web whenever they pleased.
Buzzwords such as “e-commerce” and “the internet” were consistently mentioned. People were excited by the prospect of a big payoff from the dot-com boom. By 1999, there were 457 initial public offerings (IPOs). But when the dot-com crash happened two years later, 457 went down to merely 76. The top ten companies with the most losses from this crash lost over $2.7 billion.
But there were tech companies that thrived despite the economic crisis. Apple is one of the companies that accomplished more after 2001. They launched the iPod, the iTunes Store, and the Mac OS X. And it’s because they became flexible. They transformed their businesses to make use of one valuable resource: the internet.
This movement’s called the Consumerization of Information Technology (IT). It made IT and technological devices a common resource for the public. Thus, tech companies were encouraged to make technology more accessible to the public. They created apps, websites, e-commerce services, and devices.
The 2008 Financial Crisis: Committing to Business Goals
It’s been a little over a decade, but the 2008 Financial Crisis is still fresh in people’s minds. It was the worst economic crisis that we experienced since the Great Depression. It literally changed people’s lives for the worst. They suffered over 8.8 million job losses, eight million home foreclosures, and household wealth amounting to $19.2 million disappeared.
This kind of challenge made us more resilient and careful. In response, the government dealt with the aftermath with several pieces of legislation. It helped various industries survive the damage that the crisis caused. It also helped that the U.S. was also getting fresh leadership under the then-newly elected President Barack Obama. He laid out fiscal measures. The most significant was the American Recovery and Reinvestment Act of 2009.
The 2008 Financial Crisis reminded us of how important it is to remain persistent with our business goals. It reminded us to stick to our long-term investments. But this, in turn, taught us to be more careful with our decisions. It urged us to consider first all of the stakes before investing. And it also made us carefully consider first what our investments could lead to.
With all of the business closures and job losses over the last couple of months, it’s been hard to stay positive. But what’s important is that we’re always looking for ways to keep our businesses alive. Our history taught us that the economy would always overcome its recessions. And the experience always imparts lessons. It’s good to know these lessons so we, too, could survive the ongoing economic crisis.