The recession is coming - help!

Here's a cheery thought: UK managers are expecting a downturn, and they're not sure they can cope...

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Last Updated: 31 Aug 2010

Or at least that’s the conclusion of new research by 'virtual business school' Pentacle, which found that 70% of executives think we’re heading for a recession at worst or a very painful downturn at best (by contrast, a mere 3% of cheery souls are insisting that everything will be fine).

What’s more, if the worst does happen, about two-thirds of respondents think Britain’s senior managers won’t be able to handle it. The theory is that the UK has enjoyed more than 15 years of economic cheer since the last full-blown recession in the early 1990s, so most of today’s bosses won’t have been in the top job last time around. And the leaders who have flourished during the subsequent boom years have usually been those with a flair for aggression and risk-taking – not exactly the ideal skill-set for managing in a recession.

Clearly confidence is at a low ebb. Three-quarters of junior staff think insecurity about job cuts is damaging their business and want more communication from their bosses; a similar proportion of senior staff admit there’ll be some ‘panic firing’ when the downturn hits. In fact, about the only thing people agree on is that we should blame the Government for running up such a huge budget deficit. Give that Chancellor a promotion...

Pentacle’s research is based on a pretty minute data sample (it only spoke to a measly 200 people), so we should probably be very wary of drawing too many conclusions from it. On the other hand, the basic point seems reasonable enough: it’s a long time since the economy went seriously pear-shaped, and many of today’s business leaders weren’t in the top job last time around. So it remains to be seen whether they can be as effective in the bad times as they were in the good.

Then again, it’s not as though they’ve spent their entire careers in a bull market. Economic shocks like the Russian financial crisis of 1998, the dotcom crash, and 9/11 will all be fresh in the memory, particularly in certain sectors. So they’re probably not quite as wet behind the ears as this research suggests. And equally, 60% think a downturn will actually have a positive effect, because it will get rid of some of UK plc’s dead wood.

So although it might have seemed tempting as you battled through the wind and rain this morning, it’s probably a bit early to give up on the UK just yet...

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