I attended the IBEC conference (Now, Back to Business) for CEO’s at the National Convention Centre in the IFSC. The glass-nosed building is iconic, an enduring symbol of the confidence of the Celtic Tiger years. The regeneration of the entire north inner city is testament to what can be achieved in best-practice urban planning, a physical reminder that it wasn’t all bad.
Push Back: The general tone of the conference was that the national brand (‘Ireland Inc.’) has been damaged through negativity. The room was packed with 400+ CEO’s who were intent on fighting back against this message. It kicked off with a bullish address by Danny McCoy, Director General of IBEC. Leo Crawford (IBEC president and CEO of BWG Group) was playing a strong, supporting role: “We are all here helping to change the narrative”.
Down, But Not Out: The general thesis was simple. Yes we are in a recession. Yes, it’s tough versus the glory days of 2001-2006. But… we have to focus on what’s working as well as what’s broken. In a powerful lunchtime address, the politician John Bruton made the point that while we are experiencing pain, this is not the pain of post-famine Ireland, nor civil war Ireland. It’s not the pain of 1980’s Northern Ireland, with daily reports of bodies found on the side of the road and rioting in the streets. The Message: While we need to recognize the current difficulties and the tough climb ahead, we also need to keep a sense of perspective. Agreeing, Patrick Manley, CEO of Zurich Insurance stated: “This is the beginning of a great conversation”.
Recession Upsides: The conference touched on the upsides of a recession. In terms of international competitiveness, we’ve pulled our costs back from the edge of an economic cliff. Irish energy costs have fallen – from a 38% gap against the EU average to 6%. Renting and construction costs have declined. We’ve slimmed back wasteful in-company practices (business-to-business costs are down by 6.9% since 2008) and we are in the process of tackling an obese public sector. This ‘diet’ has made the country economically viable again. While we can’t compete against very low cost countries (in China, wage rates are circa 15% of Irish rates), we are in better shape now than we were during the growth (i.e. financially sloppy) years. Businesses located in Ireland are shifting to higher value added activities – increasingly becoming R&D driven.
Recognizing Hurt: Depending on your current personal circumstances, the above analysis may seem callous. If you are sitting on a pile of negative equity or have a long commute from a ghost estate in the midlands, it’s difficult to be positive. And if you are one of the almost half a million people who are out of work it’s tough to keep smiling while sending out those endless CV’s. The recession has been tough, really rough, for some people. Just observe the steady stream of war stories that keep Joe Duffy and Frontline in business. But, the key point is that these stories, while unquestionably awful for the people directly affected, do not apply to everyone.
Mild Adjustment: Most of us have actually experienced an income drop of circa 15%. In other words we are back to 2002/2003 income levels. Tough but not life threatening. An economic flu, not cancer. While our houses may be worth 50% of their value at the peak, this is an academic point unless you intend to move. Yet we continually portray the current recession as if it’s the end of Irish civilization as we know it. Dire projections about the loss of sovereignty, a class-war as people refuse to pay their mortgages, HSE patients dying on trolleys in the street. It’s a massive over-reaction. We will survive and come out the other end of this recession, slimmer and hopefully smarter. And, this journey will be faster and less turbulent if we keep a sense of perspective, communicating our ability to cope to the bond markets, to potential incoming investors and to ourselves. At home, confidence leads to spending and spending makes the economy rush forward.
Fighting Mood: The CEO’s were in fighting mood. They wanted to get the message out loud and clear that Ireland can still boast:
• 80% of the top pharmaceutical/Bio-Technology companies in the world are located here.
• We have 8 of the top 10 financial service organizations.
• The ICT sector is strong with major software and hardware companies located here.
• Our medical device industry (50% of which is home grown) is on par with any country in the world.
And they’re still coming. In the last handful of years, three of the leading technology companies Google, Facebook and LinkedIn have all located in the IFSC, a stones throw across the river from where the IBEC conference was held. Our educated and flexible labour force, low tax regime and improving infrastructure were and continue to be attractive. Like Manchester United against Bayern Munich in the classic European Cup final, this game is still very much alive.
During the Second World War a phrase that came into vogue in the UK was: “Loose lips sink ships”. The 2010 Irish version could be reframed as: “Loose talk, investments walk”. Apart from the damage to your own mental health, going on and on and on and on about the depression (well named) and the minutia of past mistakes is a form of economic treason.
Denial is a safer place? But perhaps this was just an example of groupthink, a collective denial, even an attempt to cover up past sins? Is the government’s rescue plan and the recent injection of IBEC positivity ‘The Emperor’s New Clothes’? I don’t think so. Without doubt, the country has been has been a poster-boy for a number of brutal economic mistakes. Over lending in the banking sector, a political class joined at the hip with property developers and an overreliance on non-recurring taxation income. Into the mix you can add ballooning public expenditure (which mirrored the false revenues) and a financial regulation system that was ‘asleep at the switch’. And let’s not forget personal greed, where we all ignored the reality of the economic cycle i.e. what goes up usually comes down.
2 years ago I met a guy at Dublin airport. He was working as a carpenter in the city – but had taken a week off work, heading to Dubai to buy 3 apartments off the plans. If it had gone well, we’d now be calling him an entrepreneur. We all went a little crazy – but should not lose our sense of perspective or humour (one guy I met recently said: “I had nothing before the recession and I still have nothing; it was a great time to be poor”).
Spending time trying to work out what went wrong is ok for what’s its worth. We need to learn from the past and avoid those trip-wires in the future. But the future is the only thing that we can control. The windscreen is a much more productive space than the rere view mirror. Collectively, we need to pick ourselves up and move forward, similar to the B+ slogan often used in America (shorthand for ‘Be Positive). And we don’t need to look to politicians for leadership, we need to provide it ourselves, within our own sphere of influence. Leadership is a distributed concept.
The Media: We all have a role in this, including the media. Way back in ancient history, I completed some media studies. One of the key early lessons was that bad news sells more copy than good news. The birth of a child in the Rotunda will not make the front pages while the loss of a life often will. An article in last week’s Sunday Independent provided a good example of the media’s power to snatch defeat from the jaws of victory.
Mary Byrne (the X-Factor contestant) was featured. Was the article about her life changing opportunity – moving from Karaoke to mainline TV? No. Was it about her chance to create a new career based on her life-long ambition of becoming a professional singer? No. Was it about the feelgood factor in Ballyfermot – with the whole community wishing Mary well and spending a fortune on text messages to support her in the competition? No. It was about how she was being exploited. Apparently, she only makes a small royalty payment when her songs are downloaded on I-Tunes. The paper suggested that she would be better off working overtime in Tesco. Honestly, you couldn’t make it up.
This level of negativity is killing us and we need to shout STOP. The application of journalistic intelligence needs to focus on what’s working, rather than always on what’s broken. It’s stopping normal people from buying newspapers and making us dive for the remote control (to change channels) when the evening news hits the TV screen. We need to convert to a more balanced economic diet – with an injection of positivity. Not Pollyanna. Not denial. Balance.
Calling Time: So, let’s call a personal halt. We can’t stop the media feeding on a diet of sourness, but we don’t have to join in the feast. Like the freed Chilean miner who ran the New York marathon, let’s turn this sad story around. As Pogo reminded us: “We have met the enemy and he is us”.
Paul Mooney PhD.
Ps And now for something lighter… Double Jobbing!
Last week’s Sunday paper contained an article about Senator David Norris. The Senator is in the process of planning his funeral (music, readings etc.). We’ve probably all fantasized about our own funeral but David is actually doing something about it. Control from beyond the grave. As part of the preparation, David is recording his own eulogy to be played at the funeral.
About two years ago I was teaching a course on public speaking in the National College of Ireland. One of the participants (Emma Henderson) made a brilliant presentation on the widespread phobia around public speaking, using the Jerry Seinfeld line: “At a funeral, most people would rather be in the box than giving the eulogy”. As far as I know, Senator Norris will be the first person to occupy both roles!