Marketing executives should have a pulse on shifting consumer preferences, macro-economic conditions and emerging competitors. However, in forecasting the financial crisis of 2008 and beyond, most marketers (and economists for that matter) failed to accurately "call" the collapse, even though signs of catastrophe were ubiquitous.
Does marketing have a leadership role in influencing business strategy, and if so, why did so many of us miss the warning signs?
New Yorker columnist, Nick Paumgarten, recently wrote a terrific piece titled "The Death of Kings." In his article, Paumgarten interviews business executives who had the foresight to see the "grisly end to the credit boom" but did not act upon their convictions. Even worse, some of his interviewed subjects saw many of the same warning signs but dismissed them outright as outliers.
One financial executive interviewed by Paumgarten said that he sensed the "jig was up" when his house cleaner from Nicaragua took out a subprime loan. According to Paumgarten, this executive took this warning sign as a "fatal imbalance between obligation and means."
In fact, the signs were all around us. Easy credit, a red-hot housing market, home builder stocks at all time highs, and financial services companies gorging on mortgage backed securities. Leverage for both companies and consumers were commonplace–and lots of it. The rickety roller coaster climbed to its apex and then–well, we all know what happened next.
Some of us saw the forthcoming crisis and said nothing–against our better judgment. There were also those of us that saw the impending meltdown and did nothing–a failure to act translates into malfeasance. And of course, some business executives thought the party would go on forever, even when the spiked punchbowl was conspicuously missing from the kitchen.
The author of the New Yorker article says that humans are a "visual species" and that warning signs from our co-workers, neighbors, friends and even business press were universal. These manifestations weren't exactly blind spots. So then, why did so many of us miss the evidence, and fail to influence the business strategies of our companies?
To be fair, some of us saw the economic train wreck coming, but why did so few flee the tracks?
* Does "marketing" have a role and responsibility in helping our companies develop sound, strong and robust business strategies?
* Marketers, what tipping points–or warning signs about the economy did you notice and at what stage (if at all) did you alter your strategies?
* Culturally, is it American "optimism" that's responsible for many ignoring intimations of a brewing financial crisis? That we inherently believe the good times should–and will–roll on forever? European and Pacific Rim countries, please also weigh in.
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