Does the media affect how you run / plan your business?

David Bloch, MD of the Brightwater Group comments:

If 57% of business people are affected by the media, let’s hope they have the best of intentions, without agenda, or bias… because at 57%, that surely makes them the most powerful force out there!

First off, I am glad only 57% of people are affected by the media because I thought it might be more!  And I don’t believe the media are what they were set-up to be… a place where news is reported (people still validate arguments with ‘I saw it on xyz’ as if that makes it so!  Media have political biases, but more, they are commercial organisations that are there to make money – just like you and I.  This makes them dangerous because they are not paid to report the news, they are paid to sell newspapers / advertising / airtime…  For example, a newspaper can no longer survive by reporting the news for by the time the newspaper is printed, the internet, breaking news channels and the radio have all broken the story and provided enough analyses and opinion that the newspaper has to come up with something different.  They therefore tell us a story in a way that will grab our attention, make predictions that we must pay attention to… and the story must be compelling so a story telling us ‘everything’s fine’ isn’t going to do it!

Fear is the journalist’s friend.  Fear sells and that’s what it’s all about.  I grew up terrified of the Russians, then it was AIDS, Terrorists, Global warming and now The Economy.  This one is probably the worst because media has become more competitive, and therefore more dramatic – and the media have found that they are personally able to affect the world economy  NB. In 2010 they surveyed people in SE Asia about what their biggest fears were and the response was something along the lines of 1. Global warming 2. Family 3. Something else(?) and 4. The Economy.  I yearn to worry again about Global Warming again!

It is encouraging that 43% of people do not let the media affect their decision making and I generally believe they are right for the above reason (media isn’t equitable) and because there are so many stories that if we spend our lives governed by media moguls we will no longer be able to function as we are pulled left and right – yet I confess that the media has affected my decision making more than I would have liked. Let me explain.

I have been through 2 recessions before and on each occasion I concentrated on my job, my company and what I had to do.  Indeed, focussing on what was in front of me allowed me to grow my operations and maximise whatever opportunities were available.  I did the same in good times – focus on whatever opportunities were available.  That is not to say I was unaware of the world around me, it was just that there was nothing I could do about it and as always, I aimed to beat the odds (and my competition).

This time however, in spite my best efforts, I have found the astonishingly bad economy, coupled with a media having had a field day of apocalyptic zeal, unable to ignore.  I have seen first hand how the media more than just reports the news, the media makes the news.  For example, right after a string of particularly dramatic employment headlines, recruitment is frozen, job offers are rescinded and candidates reject new jobs as they are afraid to move.  Another example was early last year when Estate Agents reported a pick-up in business and stabilising of house prices  - was followed by interviews with neh-sayers reporting how house prices would continue to plummet… consequently people were afraid to buy and so house prices indeed tumbled!  I do not believe the media, but I know that they can affect my business so I have to keep an eye on it.  I suspect there are others out there like me.

Finally, I got a recent reminder of the Irish spirit reflected in the media.  When the EU / IMF completed their stress tests and declared the Irish banks safe, the Irish media immediately explained how the tests were inaccurate, too weak, didn’t take everything into account etc.  The media trashed the economy, leadership, administration, the banks and our entire future.  A few days later Moody’s downgraded Ireland’s economy and how dare they?!  Ireland delights in criticising itself, but don’t let anyone else do it!  The outpouring of good news and positive data - including the fact that Ireland had just passed the EU bank stress tests(!) was fantastic. I believe that fundamentally, whatever we’re told we have that stubborn self belief that we will fight our way through and prefer to believe as Barack Obama said: Don’t let anyone tell you differently…“Is feidir linn”!

PS. I just received a very interesting analysis of the economy by Fergal O’Brien, Chief Economist at IBEC which explains that: “The Irish recession is entirely due to the unprecedented collapse in domestic demand between 2007 and 2010… domestic demand accounts for over ¾ of GDP”. Fergal explains that “The sharp fall in investment activity since 2007 has accounted for about 2/3 of the overall drop… with the drop in consumer spending making up 1/3.  The reduction in Government spending has accounted for less than 5% of the fall in domestic demand”. 

NB. The savings rate has gone up to an unprecedented 12% of income.  This is way too high and should be about 7%.  I believe The Government has a role to play in stopping the fear-inducing speculation by providing clear and unambiguous plans.  We have been ‘spooked’ and people need to be absolutely certain of what lies ahead – that will control media speculation and provide a platform for people to return to normal spending and investment patterns and thus return Ireland to economic leaders.

This month's poll;

After all the trepidation and rationalisation, is your company ready to grow again?