Media Spotlight: The Zombie Economy By Mark Thomas
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Many offices have no doubt been like scenes from the film Night Of The Living Dead during the credit crunch but in his book The Zombie Economy Mark Thomas argues that the economy itself is something of a walking corpse.
The writer is head of strategy and marketing at consultancy firm PA Consulting Group rather than the comedian of the same name. Thomas bases his thesis on the idea that the four pillars of economic activity - banks, governments, companies and consumers - are zombies.
He says this is the case because although these sectors still exist they are currently unable to perform the functions we expect of them in supporting growth.
At under 100 pages the book reads more like a long essay but be warned, it does not make easy reading for anyone who thinks our troubles are over.
Thomas predicts it will be a long time before economic life as we once knew it returns because of the bad debt still held on lenders’ books.
He says lenders are hiding the amount of bad debt they hold to avoid disclosing it as a loss which would lead to more questions about their liquidity. Until lenders are able to sell on this debt their true losses will not be known and they will not be able to return to normal lending.
All four zombie sectors will ultimately play their part in the prolonged recession Thomas says we are in for. Just as the banks are dead when it comes to lending, consumers are in limbo with regard to borrowing money and spending.
Unsurprisingly, coming from a marketing background Thomas also offers readers some advice on how to survive in a zombie nation, and this is where the book falls down.
Although he offers some sound advice on how to tackle a contaminated economy it’s hard to imagine his words of wisdom coming as a revelation to any experienced business people.
For example, his four key steps to adapting your business to the zombie economy are:
- Secure liquidity - no great surprise there.
- Create a portfolio of potentially winning businesses - you don’t say!
- Remodel each business to ensure it performs strongly in the new world - easier said than done.
- Subject to the success of the first three steps, take bold action to stake out a massively enhanced market position in the new world - no problem.
The book gives useful examples of how firms such as TomTom and Reed Elsevier have secured liquidity but doesn’t go into much detail on how others could achieve this. This is typical of the way Thomas makes interesting points but fails to enlighten readers on how to pull their businesses through the downturn.
So the sub-heading of the book - Leadership In Times Of Uncertainty is somewhat misleading and Thomas would have been better off using the bulk of his book to continue his diagnosis of how lenders and banks will be able to emerge from the downturn.
If you’re looking for any great leadership tips or inside knowledge on how to keep your business alive The Zombie Economy is best avoided. But if you’re looking for an entertaining read and a realistic diagnosis of the troubles the economy faces you might want to sit down with a stiff drink and open a copy.
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