Thursday, October 9, 2008

Shut Up and Lead

I was having lunch today and (as usual) listening more to the conversation behind me than the one I was in. I know - it's a bad habit - I'm working on it - yada, yada ....

Anyway, there were three guys sitting behind me talking about the economy. 'The stock market has lost 2 Trillion dollars in value in the last week and a half...'No banks are ever going to lend money again. 'The recession is going to last for years,' etc. By the time they asked for the check I was ready to pay their bill for them so they could just pack up their bags and march off to doomsday.

I'm probably the dumbest guy you ever met, but I don't think that's the right way to see all of this. Yes, the market is way down and that's bad. Yes, there is going to be a worldwide economic slowdown. Yes, some fortunes have been lost. I feel especially badly for people who's retirement was all in high growth stocks. Acknowledging all that, I still think there is another way to see this.

There is little question that the financial markets worldwide have been an overly efficient value-creating engine for the last several years. So much so that the value they created clearly outran the worth of the underlying companies. What we're seeing is first the acknowledgement of that and then the decrease of the markets associated with a loss of confidence in the system. It can be described with lots more words, but that's really the essence of it all.

What this means to me is that for the people with the guts to quit complaining and lead there is a massive opportunity looming. In the last several major market adjustments, going back to the depression, leaders who saw, grasped and drove opportunity created enormous wealth by getting ahead of the crowd during rebuilding. The funny thing is, I don't think that takes all that much luck or skill. I think most of these people simply chose to look for stuff to fix instead of dwelling on what was broken.

For all of us, the timing of the current market situation creates an opportunity, if we choose to see it in a different light. It's an opportunity to shut up and lead. To step up and cast a vision and give the people around us a cause for hope and to drive that energy into organizations that shine because in a time of pain and darkness they exhibit light.

To be sure, the path isn't easy. We have to be smart about the paths we take. The good news is, we are smart! We simply have to decide that we are going to focus on solutions instead of problems; on ups instead of downs. We have to take that message to the people we lead and we have to overcome the noise by showing people a way out. While the rest of the world sits around their own old town Pasadena lunch table dithering away the days with gloom and doom we'll be gathering momentum. By the time they look up, we'll be on our way. By the time they rally, we'll be gone.

I had a call today with an investor. I'm raising $5MM to get n54 moving. The guy I was talking to was in New York, in the financial center - the center of the maelstrom. He was interested in the technologies and I could tell he was intrigued, but I could also tell that he was a little troubled. We got to the end of the call and I said, "what's on your mind?" He said, 'look, I'll be honest, I think you guys have a good idea here and I think there is an opportunity. I'm just not sure what the economy means." I said, "Hey, here's the way I see it. For the companies that get their dollars now and get moving there will be an enormous opportunity. After 9/11 there were a few companies that got going fast and those companies were all big winners because the markets got everyone else distracted while they were blazing ahead. I want to do the same thing." There was a pause. He said, "that's a good way to see it and you're right."

I'm no genius and I'm not saying this to blow my horn. I'm saying it because this was a hardened investor in the middle of the market. He had every reason not to hear what I was saying. If I'd said nothing our conversations would have been over. I just took a different view and he listened. In a way I handed him a lifeline. We can all do that and if we do, we may start to crack the iced over stratosphere of potential ... At least that's the way I see it.

Onward!

1 comment:

Ralph said...

Jim, right on the money my friend. Judy and i talked about this exactly this am regarding stocks (even before i saw the LA Times article) that this would be a great time to buy. not sure we are at bottom yet, but a great opportunity.

and beyond money, the fiscal crisis has ripped up the landscape for new opportunities - the ground is already being cultivated. let's lead the way!