The recent downturn has been called unprecedented because of its severity. It was the worst that most have seen, short of a depression.
But if it was without comparison, isn't it virtually impossible to predict what's ahead for businesses as a recovery takes hold?
Not so fast. I recently saw a conference presentation that makes me think otherwise.
I'm referring to a speech by Rich Karlgaard, publisher of Forbes Magazine, at the American Bakers Association Convention in Boca Raton, Fla. This longtime economic observer not only found precedent for the latest recession, but also forecast how businesses will rebound. Or, to be more precise, which types of businesses will do so.
Karlgaard compared the recession to the downturn of 1973-74 in terms of severity. Both periods saw volatile stock markets and rising unemployment. Events seemed to be spinning out of control, whether it was oil embargoes, Watergate and Vietnam in the 1970s or financial implosions more recently.
There was a recovery in the 1970s, but it was an uneven one, Karlgaard pointed out.
“This will also be an uneven recovery,” he observed, “and it won't float all boats.”
In the 1970s, the kinds of companies that thrived in the recovery were streamlined and entrepreneurial, he said. Similarly, in the current era, certain types of organizations will do better than others. Karlgaard offered up a list of expertise areas that will be critical, and I've chosen to highlight those that seem most relevant to our industry, along with some of his explanatory points:
Design: Everything from store layouts to packaging designs will be more important. Think what Steve Jobs has done at Apple.
Speed: Moving fast will equate to margin. If you miss the window on something, you'll lose out.
Supply Chain: Great supply chains will be crucial, following earlier leads of companies like Wal-Mart and Dell.
Cheap: Low-cost structures will be a major advantage. One of the best examples to emulate: Google's discovery of how to wire cheap commodity computers into virtual supercomputers to give it a big advantage over competitors.
Great Service: This will be a distinguishing factor for many companies, and it certainly makes sense in the food retail space.
Business Intelligence: The ability to do a deep dive into consumer buying patterns is now supported by a wealth of data.
Purpose: It will be important to make products that enrich lives. The recession fueled an already existing trend in which consumers are seeking more purpose.
I like these observations and will add a few of my own to the required attributes list: Great employer, commitment to safety, and experimentation with technology.
Whether or not you buy the connection between the 1970s and today, organizations won't go wrong by focusing on many of these skill sets.
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