It’s always been a question that leads to a certain kinship with others: "Where were you when it happened?" It, of course, being a major world event such as a natural disaster, the 9/11 terrorist attack, or the death of a president or a celebrity. It’s a way of remembering, bonding and healing. 

And for some of the most senior folks among us, it was the 1929 stock market crash and the ensuing Great Depression. So on September 15 – the anniversary of Lehman Brothers’ bankruptcy – I ask, "Where were you when the Great Global Recession began?" I will never forget that day, as we watched the Lehman collapse trigger catastrophe in the world’s banking system. 

The stock market dropped more than 500 points in one day, and a dangerous domino effect rippled through the global economy in a short period of time, turning a financial crisis into a full-blown recession. Even the most efficient supply chains ground to halt. Ironically, the agility and effectiveness of today’s global supply chains translated into a swift response to the economic downturn. September 15 will go down in history as second only to October 29, 1929 as the most shocking day in the business world. This has been the worst economic meltdown most of us will ever live through: foreclosures, bankruptcies, loss of wealth, unemployment, bailouts, falling GDP, and more. 

Looking at the efforts to stimulate the economy and stem the fall-out of the recession, I see a clear pattern of what theoretically should have happened versus the practical view of what actually did happen.

Lessons Learned 

The real recovery and Great Comeback plan took a drastically different course than anticipated. Consider these game-changing detours that I believe have yielded the real Lessons Learned: 

 Lesson #1, Government Stimulus Moving Too Slowly. The government could not decide on how the final stimulus plan should look, and presidential elections slowed the process. There was a sluggish release of the stimulus, and it did not begin to impact consumers until the first and second quarters of 2009; its full impact will not be realized until well into 2010. This is in no way a political analysis, simply a financial one. 

 Lesson #2, Recovery Rides on Backs of Consumers and Their Needs. Consumers hit their highest savings rates since 1993, with most folks choosing not to spend stimulus funds but to pay down debt and save the money instead. When consumer confidence first began to show gains in the spring of 2009, it was clear that the expected pattern should have been predicted as recovery in consumer spending on necessities first, then low-cost discretionary items, higher priced discretionary items, durable goods, and finally, housing. 

 Lesson #3, Companies Rely on Inventories and Increased Productivity, Not New Hires. Even after consumer spending picked up, production did not increase, since existing inventories were used to fill this demand. Then, once inventories were drained, companies still were not hiring, because increased productivity provided for the increased demand. Finally, in the third quarter of 2009, production began to ramp up and limited hiring began to take place. 

 Lesson #4, Capital Expenditures Recover Last and Sector by Sector. Although company profits are climbing as a result of cost reductions, there is no need to invest in capital equipment since factory operating rates remain stuck below the 70% mark – well below the required 75% mark needed to stimulate capital expenditures. For the most part, increased capital expenditures will become active in third quarter 2010 and beyond to 2011 and will vary by industry sector. In fact, one could argue that failure to focus on a sector-by-sector recovery and over-emphasis on a macro-economic recovery is one of the biggest lessons learned. 

Fight Uncertain Future Armed with a Plan 

None of us can say with a straight face that we can predict the future. But what we can do is take hold of our own destiny through Comeback planning. Now is the time to put in place the budget scenarios for 2010 that will allow your organization to grow, prosper and claim market share as your sector moves through recovery and onto Comeback. 

Many executives have been leading a dual life for the last six months. They work 10 hours a day cutting costs and trying to respond to their boards. Then they spend 5 hours each night trying to get ready for the economic recovery and return to growth and prosperity. Given that we are in the middle of "Budget Season," it is critical that these executives focus entirely on developing their Comeback Plans. 

I believe the next two years will be the most exciting in business since 1938. Clearly, the firms that plan for their Great Comeback are going to have the most success in 2011 and beyond. 

How are you revving up for the Great Comeback and what are your lessons learned since September 15? We can all learn more in this area!

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