Some of the regular readers to this column think that there is no such thing as over-gearing. And you may be surprised to hear that our Charlie, the conservative realist, thinks this way too.
I can already see that you’re thinking we’re talking about business and the economy when we talk about over-gearing. But not Charlie. He’s recalling life as a seven year-old in the 50s he got his first second-hand single sprocket pushbike. It cost his parents 10 shillings – a lot of money in those days. The big movement to gearing came in his twelfth year when he took possession of a brand new three-speed Malvern Star with head and tail lights. At that point he became totally hooked on gearing. His capacity to take on the steep hills and the long slow climbs with a single sprocket was destroyed forever and now, at a much more mature age, he heads off each Sunday morning in his lime green Lycra with the latest twenty four gear, yes, twenty four gear Shogun. He knows he is over geared because he only uses seven of the twenty four but he wouldn’t have it any other way.
Louise on the other hand, has always gone out on a Sunday on her tandem bike with partner, Max. Remember the tandem? The one at the back was always pedalling harder than the leader. That’s the trouble, of course, with joint ventures or partnerships. One is always working harder than the other, and it’s rarely the one who is up front.
So its true – our childhood experiences with our bikes is important preparation for our business life. It’s easy to borrow and get over-geared and the more you do, the harder it is to pay back and the more impossible it becomes to get back to where you started. And as for the joint ventures, forget it.
Our media owners have had a fair go at the gearing too. It works if it means you can go faster, just like a bike. Kerry Stokes seems to have worked it out pretty well, but the private equity funds that own the major parts of our media are finding it harder. Some advertisers are faced with the same problems, although advertising here in
But if you are in a position to expand, this is the time to do it. History has proven that advertising in a downtime can be effective. Advertisers that kept up their activity in the 1920s and 30s through the great downturn are still with us today. In the
In 1991, in the midst of the last recession, Barclay Card was the second-largest credit card brand. The market was dominated by Access Card. During the recession, Barclay Card doubled its ad spend to launch a long-running campaign featuring Rowan Atkinson as a bumbling secret agent. Within three years, it was the number one credit card brand. Within 10 years Access Card no longer existed.
Gearing is good as long as it makes you go faster.
Harold Mitchell http://haroldcharlesmitchell.blogspot.com
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