The stock market indexes have risen significantly again – are the banks pushing the prices up to improve their balance sheets or is it a stable upturn?
La crisis financiera como oportunidad
Thomas Richter, CEO of pdp GmbH
Question: You have compared the financial crisis to a brush fire. Why?
Thomas Richter: The crisis was caused by massive lending to consumers with bad credit ratings and the resulting accumulation of unrecoverable debts for the banks involved. That was like a big plain covered in grass and brush, dried out after a long spell of hot weather. Eventually all you need is a spark to set the whole plain on fire. In this case the spark was the derivatives based on all these bad loans that were then sold. Creating and selling these instruments was playing with fire, and it went badly wrong.
Question: Did you get burned?
Thomas Richter: No, not at pdp. After the economic peak we saw the crisis coming well before it happened and we were already well prepared when it arrived. Our company structure enables us to respond flexibly to market fluctuations – in every direction. We already have plenty of experience with that.
Question: Are you referring to the crisis after 9/11?
Thomas Richter: Not just that one. We’ve already weathered four economic crises in the around 20 years since the establishment of pdp – that’s something it’s easy to forget. And our company grew larger after every single one.
Question: So you can see a positive side to the current situation?
Thomas Richter: It may sound hard, but many weaker agencies and consultant engineering firms are going to fall by the wayside. In times of smaller budgets clients are naturally looking for partners who can deliver good performance at lower prices. We consciously decided not to have an office in Düsseldorf, for example – we prefer to invest our clients’ money in quality and results. They like our attitude and the way we work. We’ve succeeding in winning new customers in every economic downturn phase, satisfied customers who then stayed with us when business improved.
Question: Do you also see opportunities for your clients?
Thomas Richter: Absolutely. Companies that take advantage of this quieter period to position themselves better will already be ahead when the economy picks up again. We offer our clients individual concepts to help them score with their specific products. By the same token, anyone who holds back nervously now and doesn’t take the initiative while they can is going to fall behind.
Question: Does that mean you feel that the many companies now halting investments are making a mistake?
Thomas Richter: You certainly need to invest very carefully, with conscious planning. However, from my own experience I can say that user-friendly technical documentation and high-quality information material bring a first-class return on investment. Companies that position their products well now will have an advantage over their competitors. And after every brush fire it’s always the strongest flowers that grow the most quickly and the highest.