04 Oct RECONOMICS – RESILIENCE TO RESURGENCE
The biggest question we all have today is the Impact of the Pandemic on the Global Economy, what is the recovery scenario and what kind of lasting structural impact it would have on the Financial Markets, Trade, and GDP. It is a fact that over 180+ countries out of 193 UN Member countries have closed national borders during the past month, impacting trade, travel, tourism, and literally everything has been under lockdown. It is also a fact that the Pandemic has caused Economic Destruction, Devastation, and Disruption across the World.
The Projections / Indices / Forecasts won’t be able to answer the big question of the Impact on the Global Economy. The effectiveness of Forecasts of GDP etc. are certainly not accurate, when we are unable to estimate the results of the containment efforts of the Pandemic.
The reality is that there is no single number that can credibly capture the Impact of the Pandemic on the Global Economy.
We have estimates from the latest trade report of the United Nations Conference on Trade and Development [UNCTAD] saying that the world economy will go into recession this year with a predicted loss of global income in trillions of dollars.
Another Forecast from the UN Department of Economic and Social Affairs (DESA) says that the global economy could shrink by up to one percent in 2020 due to the pandemic.
The trade impact of the Top 15 most-affected economies as per UNCTAD in the chart below:
The Impact of the pandemic on Global Stock Markets, have eroded the wealth of Investors across the world.
World Trade Organization [WTO] Forecasts that Global trade is expected to fall, between 13% and 32% in 2020. We also have the World Economic Forum and IMF echoing similar forecasts.
McKinsey in their analysis of Economic Impact says, three broad economic scenarios might unfold: a quick recovery, a global slowdown, and a pandemic-driven recession.
Whether economies can avoid the recession or not, the path back to growth under Covid-19 will depend on a range of drivers, such as the degree to which demand will be delayed or foregone, whether the shock is truly a spike or lasts, or whether there is structural damage, among other factors. The recovery scenario would translate to three broad scenarios, which Economists sketch as V-U-L.
These are some reports of Industries as Potential Losers and Potential Winners Decoding the Economics for us.
Entrepreneurs & Business Leaders have two choices:
1. To look at Facts and Projections / Indices / Forecasts, get scared of the economic destruction/devastation/disruption and get into negativity, recessionary mindset, and press the panic button.
2.Demonstrate Resilience, Resolve, Revive and Reshape Businesses, creating a Recovery path and contribute to the Resurgence of the Global Economy
Economists / Finance / Stock Market experts will continue to give forecasts and estimates of the Impact on Global Economy and on how things would unfold over the next few months.
Entrepreneurs need to only understand Reconomics, the Economics of Resilience, Resolve, Revival leading to Resurgence. Entrepreneurs must do what they are passionate about and do their best to build a Strong Resolve to Create a Recovery Path and Redefine Economics as the Reconomics of Future.
The Term Resilience is everywhere – But what does it mean to Entrepreneurs and why is it important. As Resilience moves from technical term to a buzzword, there’s value in clarifying exactly what it is we’re talking about.
Psychologists define Resilience as the process of adapting well, in the face of adversity, trauma, tragedy, threats, or significant sources of stress — such as family and relationship problems, serious health problems, or workplace and financial stressors. As much as resilience involves “bouncing back” from these difficult experiences, it can also involve profound personal growth.
Resilience is the ability to mentally or emotionally cope with a crisis or to return to pre-crisis status quickly. Resilience exists when the person uses “mental processes and behaviors in promoting personal assets and protecting self from the potential negative effects of stressors”. In simpler terms, Psychological Resilience exists in people who develop psychological and behavioral capabilities that allow them to remain calm during crises/chaos and to move on from the incident without long-term negative consequences.
I liked the Modern Definition of Resilience by Jurie Rossouw from Driven which is “Advancing Despite Adversity”
Psychologists have identified some of the factors that make a person resilient, such as a positive attitude, optimism, the ability to regulate emotions, and the ability to see failure as a form of helpful feedback. Research shows that optimism helps blunt the impact of stress on the mind and the body, in the wake of disturbing experiences.
Like building a muscle, increasing your Resilience takes time and intentionality. Resilience is not some magical quality; it takes real mental work to transcend hardship. But even after misfortune, resilient people are able to change course and move towards achieving their goals. There’s growing evidence that the elements of resilience can be cultivated.
DOMAINS OF RESILIENCE
The ability to build and sustain Resilience is related to Self-management and efficient utilization of Energy resources across four Domains: Physical, Emotional, Mental and Spiritual..
Physical resilience is basically reflected in physical flexibility, endurance and strength, while Emotional resilience is reflected in the ability to self-regulate, degree of emotional flexibility, positive outlook and supportive relationships. Mental resilience is reflected in the ability to sustain focus and attention, mental flexibility and the capacity for integrating multiple points of view. Spiritual resilience is typically associated with commitment to core values, intuition and tolerance of others’ values and beliefs.
By learning self-regulation techniques that allow us to shift our physiology into a more coherent state, the increased physiological efficiency and alignment of the mental and emotional systems accumulates resilience (Energy) across all four energetic domains.
Having a high level of resilience is important not only for bouncing back from challenging situations, but also for preventing unnecessary stress reactions (frustration, impatience, anxiety), which often lead to further energy and time waste and deplete our physical and psychological resources.
KEY FACTORS TO BUILD YOUR RESILIENCE
By focusing on five key factors – Emotional intelligence, Energy, Relationships, Perspective, Priorities – Entrepreneurs can build resilience.
1. Work on your Emotional Intelligence – Being able to identify and manage our own emotions, as well as identify other people’s emotions, can help us see things objectively and to respect others’ views. This can help when we feel threatened or when we have a disagreement with someone. Our interpersonal skills also help us connect emotionally with others, developing closer relationships and a shared understanding.
2. Improve your Energy – A physically or mentally demanding lifestyle can leave us feeling drained, especially if we don’t balance this out. Energy management is key to building resilience as it influences how well we sleep. Taking regular exercise, staying hydrated and reducing caffeine intake can help control our energy levels to support good quality sleep.
3. Create Meaningful Relationships – Having meaningful relationships through a support network of family, friends, colleagues and other social groups helps us feel connected and valued. This is important when we’re facing awkward or difficult situations because we know where to find support, advice and comfort.
4. Get some Perspective – When our attitude towards something is balanced and rational, it can support our resilience as it helps us to have a clear view of reality and see the bigger picture. Stepping away (mentally and physically) from a challenging situation and thinking about different ways of viewing it – perhaps by taking a short, brisk walk – can help our clarity of thought and problem solving by allowing us to reflect.
5. Think about your Priorities – Having a clear sense of purpose based on our values and strengths is key to developing and maintaining positive outlook. This includes understanding what matters most to us – from what makes us tick, to how we spend our time and who we want to spend it with. It is important to take time for ourselves in order to relax and think about our goals in life, making time for what matters most.
THE RESILIENCE FRAMEWORK
The Resilience Framework can be applied to any situations or adverse events. We start with the Understanding of the Situation first and identify risks and the kind of impact it has on various aspects of life and business. Based on the Impact and the type of situation, we formulate and list down various options available to adopt, then assess and prioritize the options before implementation. We create a set of measures to monitor and evaluate the effectiveness of the implementation and review them frequently to remain on course. Understand the impact of the actions taken, has led to the improvement in the situation or not. Else repeat the cycle again. This is more of a generic framework which can be applied to all kinds of situations or scenarios.
There are many aspects of life Entrepreneurs can control, modify and grow with. That’s the role of resilience. Becoming more resilient not only helps Entrepreneurs get through difficult circumstances; it also empowers Entrepreneurs to grow and even improve life along the way.
8 STEPS TO BECOME MORE RESILIENT
As an Entrepreneur, it’s important to demonstrate resiliency in difficult times when everyone is looking to you for emotional strength and courage. They’re looking up to you to set the direction and light the path. If you’re resilient, you’ll project a positive outlook that will help everyone maintain the emotional strength they need to commit to a shared vision.
If these tough times are testing Entrepreneur’s ability to bounce back, there are steps you can take to advance and thrive. These are the 8 Steps recommended by the Center for Creative Leadership, are a perfect fit in the current circumstances which I believe can help Entrepreneurs.
1. Accept change. The earlier you Accept Change it is better. Find ways to become more comfortable with change. Change is constant and inevitable, and you can only be successful if you accept it, rather resist it.
2. Learn continuously. Continuous Learning can help you learn new skills, gain new understandings, and apply these skills during times of change. Holding onto old behaviors and skills may not work anymore. Learning, Unlearning and Relearning are essential to sustain and grow.
3. Take charge. You own your development, start investing in yourself, embrace self-empowerment. Take charge of your own career and development. Don’t expect someone else to guide the way.
4. Define purpose. Develop a “personal why” that gives your work meaning or helps you put it into a larger context. A clear sense of purpose helps you to assess setbacks within the framework of a broader perspective.
5. Create balance. Form your identity apart from your job. A job is just one facet of your identity, and a career is just one aspect of your life. Separate who you are, from what you do.
6. Cultivate relationships. Develop and nurture a broad network of personal and professional relationships. Personal relationships create a strong base of support — a critical element in achieving goals, dealing with hardships, and developing perspective. Remember that relationships are important for your team too.
7. Reflect. Whether you’re celebrating success or enduring hardship, make time to reflect. Reflection fosters learning, new perspectives, and a degree of self-awareness that can enhance your resiliency.
8. Reframe skills. Question (and even change) your definition of yourself or your career. Reframe how you see your skills, talents, and interests. By casting your skills in a new light, you can see how they might shift into new patterns of work and behavior.
While we’re not necessarily born with an ability to deal with potential setbacks, some people can appear to be better equipped – or more resilient – than others to face life’s challenges.
Entrepreneurs it is time for you to assess your:
- Strengths – Natural & Acquired Strengths and Abilities
- Confidence – Level of Self Confidence, Self-Image & Self Esteem
- Motivation – Key Drivers of your Motivation
- Protection – How well are your Protected across the Spectrum of Life & Business
- Effort – What are your Effort to Results Ratios
- Change – Your Ability to Adapt to Change
- Agility – Your Ability to Respond to Change
Entrepreneurs need to seek help from Credentialed Coaches / Business Mentors who can help you Rediscover, Realign, Develop Resilience and also help you in Assessing the above Abilities enabling you to be Resilient, Adapting faster and being Agile.
Resilience is something we can all develop and grow. Being aware of the lifestyle choices that can increase our ability to bend rather than break, when we face adversity can help us not only survive, but thrive.
It is fully in the hands of Entrepreneurs to Rise up to this Challenge and demonstrate Resilience, a Strong Resolve, trigger a set of Actions for Revival leading to Resurgence. Entrepreneurs have the choice of allowing the Global Economy / Markets / Forecasts to dictate terms to them, rather be Resilient and focus on Redefining the Economics and make it the Reconomics of Future.