Recessions give space for new ideas to flourish

When we come to look back on the 2008-2009 recession,
it will be seen to have had important economic consequences;
it will have taken us "back to basics", rebalancing the
spending excesses of the past ahead of the next round of excess.
It is the economic equivalent of Lent. The recessions of the
early 1980s and the 1990s played similar roles. Recessions
are times when the unspeakable happens; when the foundation on
money that grabs attention, but in the long term the effect of
the recession will be felt as much in one's day-to-day work as it
will be in one's pocket. While the economic effects of recession
can be dire, in the long term the effect on work and working habits
can be positive.

The 1981-82 recession heralded the end of the notion of a
"job for life". Jobs and careers would never be the same.
The mantra following the 1980s recession was that of the
"free agent". The relationship between employees and employer
was described as moving from "parent-child" to "adult-adult";
flexible working was increasingly seen as a viable option and
only the deluded thought they had a job for life. This is
increasingly seen as the norm, bringing despair to some and a
sense of liberation to others.

The recession of 1990-91 accelerated these changes while adding
one more important dimension – that of globalisation. Costs were
cut by moving work out of the developed countries into the labour
markets of the emerging nations such as India and eastern Europe.
What began as the exodus of low-cost work accelerated over the next
10 years into the globalisation of talent in sectors such as
information technology and research.

So what impact will the current recession have on work over the
next decade? Of course, these trends are easy to spot in hindsight –
more difficult when you are in the midst of the downturn. But there
are enough clues for us to make a guess.

First, while the focus is still on shoring up finance and the
economy, in time we will begin to question the prevailing norms
of leadership and decision-making. The dominant "command and
control" leadership style that allows a chief executive such as
Richard Fuld at Lehman Brothers unilaterally to make decisions
about the whole company will increasingly come under scrutiny.
If the crowd is indeed wise, why do we put our faith in the
decisions and knowledge of a tiny fraction of people? I expect
to see over the coming years a growing realisation that
distributed decision-making and leadership to a wider group of
diverse people results in better decisions. This will have
profound implications for the selection and development of leaders.

Next, past recessions have often served to accelerate the
development of practices and processes that had limited
popularity pre-recession. Before the 1990s recession,
for example, off-shoring was seen to be too complex and
difficult an option. It was only with the cost imperatives
of the recession that off-shoring was initially pushed and
then eventually became a norm, later to be broadened and
deepened into its current application. The same is true
of group-ware technologies, which have had limited uptake
as people said they would prefer to meet face to face.
Now, however, those who last year would have jumped on a
plane to attend meetings have had their travel budgets
slashed. They are being forced to use video conferencing
and webcasts. Once the cost-cutting is relaxed, some will
return to the airports. Others, however, will have
fundamentally changed their habits and begun to build
working communities that are virtual.

Finally, the 2008-2009 recession will profoundly change
the way occupations are seen. Each previous recession
has had some impact on perceptions. The 1990s recession
slowed the rush to technology and start-ups. The current
one may well have the same impact on banking, which has
been a huge magnet for talent. The upside would be that
our most talented youngsters might look to more than just
investment banking for a career.

Recessions are a time of destruction of the old order, a
time when assumptions are questioned and nascent practices
and ideas are given space to flourish. That is little
cheer for now but, in the longer term, an enormous stimulus
for change.

Financial Times — 10 December 2008

Lynda Gratton