Recession Leadership

“Geesh, Pop, doncha know there’s a Depression going on?”

The  year was 1933. Tony was home for Christmas from the Harvard Business School and he couldn’t believe how dumb his father was.

“I dunno, Tony. Business has been OK.” Tony’s father ran a hot dog business in New York City. He had about fifty pushcarts on street corners and he had just received a concession at Yankee Stadium.”

“Pop, Pop, Pop. You say that now, sure, but everywhere you look people are out of work. Big companies are laying of more workers every day. Things are bad, Pop. You need to be smart, cut back now.”

“I dunno, Tony.”

“ Pop, read the newspaper.”

Tony went back to school and the old man read the newspaper. Things were bad all right. The whole paper was full of how bad things were.

The old man bought cheaper hot dogs and day-old buns. He cut out onions altogether and added water to the ketchup and mustard to make it go further. Some of the street corner guys complained, but he answered them with Tony’s words, “Doncha know there’s a Depression going on?”

The street corner guys weren’t selling out anymore, so the old man cut back on his orders. He started to run out of dogs at Yankee Stadium before the seventh inning stretch. Stadium management didn’t like that much, but the old man knew that it would just be a matter of time before people at the game just started buying fewer hot dogs like the people on the street.

In June when Tony came home, the old man told him he might not have the money to send him back for the second year. The business was down to thirty push carts and he’d lost the Yankee Stadium contract.

“I guess you were right, son. There is a Depression going on.”

This is an old story

I saw a photocopy of this story on my boss’s wall in the 1970s. Sam said someone gave it to him twenty years before. He asked his salespeople read it and then he’d ask us what we thought it meant.

Most of us got that negative attitudes can create a self-fulfilling prophesy. Some of us saw that the old man had cut his quality in ways that drove away his customers, no onions, watery ketchup and mustard, stocking out before the seventh inning rush at a baseball game. A few of us were able to generalize that all sectors and channels do not suffer equally in a recession.

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