Restless Econony

Recent reports on the economy strike very different tones:

Things are either getting a lot better or getting a bit worse again

We can choose which reports to base our next moves on, the good or the bad ones. Or maybe, it is true that things will get better and worse... because it's not like there is one economy, there are numerous ones. It is conceivable that mass retailers will be reducing their locations while other industries are growing.

There's another word for all of this: change. We cannot count on things being as they were, not only two years ago, but six months ago. It's a restless economy: we cannot rest.

Barry LaBov
LaBov & Beyond
http://www.labov.com/

For the tenth time: How can you take advantage of the economy?

The economy is improving. It's gone from disaster to anemic to sputtering.

How can you take advantage of it?

Companies are hungry, there is an abundance of people looking for jobs.

How can you take advantage of it?

Reale estate is cheap, costs are down.

How can you take advantage of it?

Competitors are dying.

How can you take advantage of it?

Customers are finally ready to hear the truth.

How can you take advantage of it?

Employees may actually be appreciating the fact they have a job.

How can you take advantage of it?

Barry LaBov
LaBov & Beyond
www.labov.com

Jobless Recovery is another term for Downsized Economy

It saddens me when I hear that our economy is in a "jobless recovery." To me there is no such thing. If we have less people employed, we have not recovered.

In business, when you let go of people and costs and are able to survive, that's called downsizing.

A friend of mine has a company that is down 84% in sales. They've laid-off 700 people, cut salaries, benefits and are stabilizing. Until they are hiring people back, they have not recovered.

Barry LaBov
LaBov and Beyond
www.labov.com
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Waking Up from the Recession Slumber

As the economy improves, there is a phenomena that is taking place. There is less business going on, yet people seem to be too busy to pick up more slack. True, in many cases, there are less people working due to lay-offs and downsizing. In many cases, we've become accustomed to a slower pace, which isn't going to help us recover.

The salesperson at the empty dealership is not calling you back regarding that car you inquired about (or if he does, it's a day or two later). The product manager is not responding to a market opportunity fast enough to take advantage of it. The supplier is sensing opportunity but they're moving at a snail's pace to do anything about it.

Why? Because some of us are still in the recession slumber. We're drowsy. We don't have our bearings yet. But, we can't just roll over and go back to sleep. It wasn't a bad dream that will go away. The sooner we wake up and get moving the better.

The good news is that some companies will take a Rip Van Winkle approach and try to sleep through this. That's good news if they're your competition.


Barry LaBov
LaBov & Beyond
www.labov.com

When the economy grows, is it time to let clients go?

We will be facing an interesting dilemma as the economy turns around. As we are starting to see an increase in new business, we'll be stressed over how we can handle that influx. How many people do we add? Where do we find the right people?

Maybe the right people are already at your company.

Those really good people may be floundering working with customers that are unprofitable, unwilling to be a partner or who are just plain demotivating. Right now, you may be grateful that you have any business with these customers. But as the economy picks up, you won't be.

One option that will be staring us in the face will be: which clients do you let go so you can "trade up?"

I say this with no attitude whatsoever. It is simply a reality that a good business will need to face.

Barry LaBov
LaBov and Beyond
www.labov.com

And what if 2009 is really a lost year?

An earlier blog of mine discussed the current opinion that 2009 is a lost year--write it off. Basically the prevailing message today is: Wait for 2010.

Let's say 2009 is a lost year and you give up, you throw in the towel and wait for things to improve.

Does that also mean your competitors are going to do the same? Will everyone wait for you to "wake up" and re-join the race in 2010?

If you're thinking of throwing in the towel for 2009, go ahead, but don't be surprised if your competitors are happy when you do.

2009: The Lost year?

Right now the popular prediction is that 2009 will see the economy struggle and eventually stabilize and that 2010 will begin to show growth, small growth.

What does that mean? Do we wait till next year? Do we stop living till 2010? Can we we really trust that 2010 will be that much better?

My two cents is that the same people that are telling us that 2009 is a lost year year and that 2010 will be better are the same people that didn't see any of this coming.

So... I say focus on what can be done to make this as good a year as possible, one day at a time. Don't give up, don't concede.

For all we know, this is the best year we'll have in the next three or four.

Thank you, Carlos

I think we Americans are pretty self-centered. We feel the recession is all about us, that we're the center of the universe, etc.

I met a smart guy named Carlos in Puerto Vallarta recently. He works at a car rental place and graciously drove me to the airport and enlightened me.

He let me know that the economy is bad everywhere, not just in the USA. He also let me know that one man did not create the problem nor can one man alone solve it. He told me that most Mexicans are happy that Prez Bush is out of office because that while he appeared to be a good person, he made many poor decisions.

I asked him about immigration. He said, "Mexicans don't all think the USA should open up the border for everyone. We just think that Mexicans living for years in the USA should be treated with respect." I was a little surprised. He added, "You know that Mexico has immigration problems with Central America. There are plenty of people fleeing there trying to cross the southern Mexico border. We understand what that's like."

I hated to admit it to Carlos, but I did not know that Mexico dealt with its own immigration issues at the southern border.

I'm just a self-centered American. Thanks for the reality check, Carlos.

From Order-Taking to Order-Making

Companies are taking one of three responses to the current economy:
1) Lay-low
2) Business as usual
3) Order-Making

1) Lay-Low: There are plenty of companies that have given up and are in survival mode. They awkwardly smile when you ask how their business is. They've thrown in the towel and in hibernation, hoping to wake up to a better world in a few months.

2) Business as Usual: Other companies are moving along as if things are the same as ever. Those companies are the ones that all of a sudden will realize they're in denial and cut a third of their workforce all at once.

3) Order-Making: These are the opportunistic companies that respond to the recession for what it is making sure they have the right size workforce and operations while focusing on opportunities. These companies are in a positive cash position and have a huge advantage over their competition.

Big ideas and strong companies have been born in recessions and depressions--all from people that had the courageous and passion to fight the temptation to be in denial or in hiding.

Advice on wine and on the stock market

I asked advice of two very smart people recently. One is an expert on wine, the other a top financial analyst with a major bank. I wanted to know how best to take advantage of the current economic situation, i.e. to find good deals.

I asked the wine expert for his opinion as to my approach to buying investment wines now that the high-end wine market is slumping.

I asked the financial analyst for his recommendation on how I should approach the stock market or real estate.

They both said exactly the same thing:

Be patient, it'll get a little worse. Then it will be time to buy, because it will get better.

"My industry is down 40% and no one is buying?"

We need to stop and think when we hear things like, "My industry is down 40% and no one is buying anything."

That statement makes no sense, it does, however, cry out for pity for the person saying it--which may be their intent. If that's not the intent, then consider this:

The industry may be down 40%, but that means 60% of the customers are still
buying.

Most of your competitors are either laying low or in the process of cutting their services or staff--that means an opportunity for you to gain market share.

If you could go from 3% to 5% market share in your industry, you'll be able to make up for much of the industry downturn. There will be less business to go around, but the aggressive, focused company can benefit in the long run and minimize the damage in the short term.

Maybe the Economy has Bottomed Out…But why don’t I feel good?

Barring a disaster such as a war or an earthquake, it is possible that the economy has pretty much hit the bottom and won’t get worse, if anything it will begin to crawl back.

But if this is the case, we’ll be seeing the domino effect for the next several months with stores closing and businesses shuttering. Hard to fathom, but many companies just concluded the “best part” of their year and if they don’t have much to show for it, they just may pack it in. It’ll seem like things are getting worse, when in reality, we’re just seeing the reaction to what has already happened.

Donuts: Antidote for a Rotten Economy

Sure the economy looks bad; businesses are struggling or failing in some cases. What can be done?

Look no further than coffee—Dunkin Donuts is aggressively pursuing Starbucks and making great progress. Why? They’ve shown passion and bravery—they obviously believe in their product and they’re not sitting back playing it safe. They’re now in more supermarkets than ever and Starbucks is in retreat.

On the opposite side of the equation, look at the Big Three. They have a built-in market for their products yet they’ve alienated most of that market. Why? Look at their product—it’s tired, unimaginative, outdated, overpriced, etc. They evidently didn’t believe in their product. They showed no passion, no guts.

Bravery and passion are necessary to succeed in this economy, without both, you have no chance.