Marketing the Moustetrap Blog : To invest or not to invest, that is today's question

Tuesday, May 26, 2009

To invest or not to invest, that is today's question

Indeed the raging debate over the past eight or nine months for nearly every commercial entity across the globe has been centered around where and how deep to make financial cuts in order to survive the current economic downturn. However, one could (and possibly should) argue that perhaps the better questions to be pondering are how and where to make strategic investments.

Having led both private and public companies, trust me when I say that I do fully understand the complexities involved here. A decline in the demand for your products or services will definitively result in a drop in revenues and inevitably bring increasing pressure from the external entities that influence your organization; your investors, your customers, your Board of Directors, etc.. This pressure can be all-encompassing and will almost assuredly involve frequent (i.e. daily) assessments of your personal performance and career standing.

The decision to do anything other than to divest along with 95% of today's business community is both difficult and complex, but I personally believe that the advantages to overcoming this pressure and investing forward far outweigh the burden of the pressures that we are ultimately paid to absorb. Among other things, making strategic investments in tough economic times allows for the following:

Your company can acquire relevant resources and materials at market prices that are at unprecedented lows.
Your business will be positioned perfectly for the inevitable economic rebound that other businesses will constantly be one step behind.
Your organization will have the satisfaction of knowing that it is not contributing to the vicious cycle of divestment that will undoubtedly prolong the current economic downturn.

As for the second guessing that always accompanies a journey down a road less traveled, be sure to document and communicate the logic and projected returns associated with your investment strategy. Keep in mind that most people inherently want to invest in the future but in economic times like these, they will require a little more convincing if they are to break from the general tendency to retract and retrench when the going gets tough.