Economic Outlook: Bad But Not Hopeless
The economy is in bad shape and getting worse, but that doesn't mean there's no good news for businesses and workers, according to participants in a panel discussion sponsored by the Worcester Business Journal yesterday.
Frederick Healey, president and CEO of Workers' Credit Union in Fitchburg, said he expects housing prices to continue to decline and said unemployment will likely peak at 8 percent.
"We are not at the bottom of our business cycle," he said.
Healey, along with Steve Rothschild, president of bulbs.com in Worcester and Larry Bohn, managing partner of General Catalyst Partners in Cambridge, said two years seems a likely timeframe for the downturn to resolve itself.
For businesses struggling to survive in the meantime, the panelists had suggestions. Bohn said a company should prepare for a bad scenario and make all the layoffs it's likely to need up front. He said making smaller cuts repeatedly over a long time demoralizes employees.
"You're much better off taking the medicine early," he said.
"You cut hard, you cut fast," agreed Rothschild.
The panelists said it's also important to be open with employees about companies' financial situations to keep them from assuming the worst.
Bohn said downturns can have a bright side for companies because they force them to reevaluate how they do business. Almost inevitably, he said, growing companies end up tolerating mediocrity.
"The first 10 percent of people leaving a company generally are people who by way of merit shouldn't have been there in the first place," he said.
The panelists also said new graduates looking for jobs shouldn't worry too much about the economy as long as they're ambitious and willing to work hard. "Everyone is one job interview away from greatness," Bohn said.
The panel was moderated by George Gendron, founder and director of the Innovation and Entrepreneurship Program at Clark University's Graduate School of Management. The event was part of WBJ's Top Growth awards ceremony honoring the fastest-growing private companies and nonprofits in Central Massachusetts.
Click here for photos and other information from the event.
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