Worry about the things you can control - How to stop recession through innovation?
When creative minds are overburdened with the fear of what's coming, they fail to work at their full potential. And that's what going to happen if you consume your energy into controlling things you can’t control.
Fear and worries tend to interrupt our brain processes, negatively impacting our decision-making abilities. We become susceptible to intense emotions.
The same happened during The Great Recession of 2008 when panic struck; people began withdrawing cash from their banks. In case of uncertainty regarding the safety of banks, depositors tend to protect themselves by withdrawing the funds and holding them as cash.
At that time, the C/D ratio, which is the currency-to-deposit (C/D) ratio, was calculated to be huge, indicating the presence of fear and panic among the people.
It might not be easy to stop the recession, but you are inevitably doomed with fear in your mind. The media is persistently persuading people that there will be a recession. Such news instils a disturbing emotional status among the people.
What factors can contribute to the upcoming recession in the UK?
Government policies, interest rates, adversaries of the pandemic… there could be many factors to cause the recession– the one unresolved reason is a labour shortage in the UK.
For the last 16 years, there has been a 1.8m shortage of youngsters and currently, we are three and a half million workers short. Along with this, the end of the lockdown has disrupted the supply and demand economic cycle. There has been an under-investment in productive assets (people) and significant over-investment in property assets, which makes inflation inevitable.
If at this point, you are relying on mainstream economic forecasting for its precision, you need to check out the Episode 18 of The Innovation Room- A finger to recession. We shed light on how precisely wrong the forecasting can be, along with addressing some core reasons for the recession– their aftermaths and the things that can help companies progress safely.
How to focus on innovation to stop recession?
How can you focus on innovation with so many uncertainties on your mind? When a person is aware of a situation and has been through a similar one, they tend to predict the future scenario based on past experiences.
They keep their guard up high and stress about what's coming.
The book, "Thinking Fast, Thinking Slow" - by Daniel Kahneman talks about Cognitive Ease and Cognitive Strain.
People who experience cognitive ease tend to trust their intuition and stay relaxed, whereas the ones who experience cognitive strain are less intuitive, less creative, and stay vigilant and suspicious.
However, about 80% of the time taken in decision-making is intuitive. Hence, to innovate, you need to get such people on board who are connected to the world of technology and are not bounded by the events of past recessions. Such people get to resonate with your ideologies in a better way as they are self-aware of the modern world.
Who are those people- It's Gen Z.
How will Gen Z impact the future of work?
Gen Zers are considered the tech-savvy generation as they grew up in a world that is borderless and more connected through the internet and a myriad of smart devices. This generation is more involved in technology, fashion, and beauty and has an out-of-the-box approach to sowing seeds of profitable ventures.
Gen Z is more inclined toward equality and accepts differences of opinion, perceptions, and views. They tend to welcome newer ideas, approaches, and different ideologies to innovate.
Companies today need to enhance diversity in the workforce as it can bring a bunch of different ideas to scale up. The more diverse your workforce is, the better you will be able to deal with the change.
During the recession, companies with appropriate culture and an inclination to infuse enthusiasm among employees and clients tend to progress slower but steadier. So, it's important to build a strong foundation for your firm with employees who have an unconventional approach to dealing with the recession.
So, on the whole, remember, what you see is all there is. Focus on what you can do and the change you can bring for success to be at your disposal.