The World has Changed - Or has it?
The last couple of months have been interesting, that's for sure. With Obama being elected president, the decline of the stock market and the Euro dropping by about 20% to the dollar in about 60 days, it appears that everything is in turmoil. If you were planning on retiring in the next few years or you worked with a financial institution that found itself with a negative net worth, you will need to make some major adjustments.On the other hand, we've seen some dramatic relief at the gas pump and it's hard to believe that has been totally driven by reduced demand. Obviously the decline of the Euro has had an impact on oil prices but it appears that as things have changed, we can count on the familiar themes of good old greed and over reaction.It was announced a few weeks back that retail sales in September were down 1.2%. The stock market dropped 6% that day. Are the publicly traded companies worth 30-40% less than they were just a few short months ago? Probably not. Will the big investment funds generate strong gains buying stocks at these prices? You can count on that.
Unemployment is 6.7% and GDP is down over 2007. From my view, the cup is more than half full. A challenging business landscape is a perfect opportunity to thin the herd of weak competitors. If one competitor in each industry fails and redistributes share to the remaining contenders, increased sales and profits are realistic for many businesses. It the remaining competitors increase their costs less than the failed entity, the entire industry becomes more efficient which is good for customers and shareholders.
For the most part, I work with Main Street clients and November has been a good month - one actually had their best month ever in November. What's the big secret? Get your staff focused on taking care of the things that customers value. Work smarter. Invest in systems and productivity improvements. Don’t cut back on your marketing. Improve new products. Get better every day.
Don't be distracted by what's happening with your 401K. That's like trying to win a tennis game by watching the score board. Keep focused on your value drivers. Make strategic changes where warranted but for most businesses, the world has not changed as much as the media would lead you to believe.
posted by Michael Sick @ 2:26 PM
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