THE ENTERPRISE--RECOGNITION for THE COMPLEXITY CRISIS & RECESSION ADVICE
THE COMPLEXITY CRISIS CHOSEN AMONG "2008'S BEST" BY SOUNDVIEW EXECUTIVE BOOK SUMMARIES
http://www.summary.com/cgi-bin/Soundview.storefront/47e518ce00c185f92717ac100b0d069e/Catalog/1826
You can just use the link below to buy a copy of the book. If you buy 2 copies, amazon offers free shipping (on orders over 25) and that extra book will make a nice gift for a business associate you care about.
http://www.amazon.com/Complexity-Crisis-customers-crippling-company/dp/1598692143/ref=pd_bbs_sr_1?ie=UTF8&s=books&qid=1206196736&sr=8-1
FYI--FOR THOSE WHO HAVE BEEN ASKING: SCHEDULE OF MY SPEAKING ENGAGEMENTS--April
April 1, Northwest Arkansas Community College-Students in Free Enterprise, Bentonville, AR
April 9, Emerson Electric (private), Orlando, FL
April 23, Georgia Tech Supply Chain Executive Forum, Atlanta CSCMP, Atlanta, GA
April 28, Cleveland State University Design, Innovation and Entrepreneurship Center of Excellence, Cleveland, OH
RETAILERS I ONCE KNEW--HOW THINGS CHANGE
I was reading a small chart in FORTUNE'S recent article about Target, which showed a few of the major retailers' life span. I realized that in my career, I've seen a lot of them come and go...and "more went than came..." Here's a blast from the past--retailers who are no more:
E. J. Korvette, Fedmart, Montgomery Ward, Kuhn's Big K, Ayrway, White Stores, Hechinger, Two Guys, Vornado, White Front Stores, Price Club, W. T. Grant, Woolworth (at least in the USA), S. S. Kresge (in that format), T. G. & Y. , OTASCO, Howard Brothers, Gibson's, Bradlees, Sterling Magic Mart, Caldor, Pace, Ames, Richman-Gordman, Two Guys, J.C. Penney's Treaury, Best Products, Service Merchandise, Hart's, Gold Circle, Zody's, Zayre, and a long list of regional department stores that have been gobbled up, mostly by Macy's/Federated and drug and grocery store chains that have gone away.
Some of these were the earliest stores in new forms of retailing: E. J. Korvette was one of the first general merchandise discounters; Service Merchandise, one of the earliest catalog showroom chains; Price Club, the first membership wholesale club; and of course the two "dime-store" legends, Woolworth and S. S. Kresge--both of which still exist, but in nothing like their original format.
IS THE FINANCIAL CRISIS THAT BAD?
Yes. It's brutal. Companies (and individuals) are literally being denied credit that they are (on the surface anyway) worthy of getting. As banks and financial institutions write off more and more bad debts (from stupid loans), they must pull back on available credit to keep their ratios of bad debt to total debt in line. Thus a default of $1 million of bad home loans (booked as a total loss, in spite of foreclosure values) can cause banks to pull $10-20 million of lending potential off the market.
Now is the time to keep your cash needs amply funded, and NOT need to go borrowing. Most institutions simply will deny the credit. The others will charge huge premiums and demand tremendous security, or buy companies out at enormous discounts. You read about the Bear Stearns deal, right? Look for more government bail outs and stimulus packages. Further interest rate cuts (maybe these last ones) will make things worse, not better. Inflation will come roaring in (China prices are up 15-20% already), and the dollar will keep sinking, making US goods cheaper, but imports more costly.
ONE THING TO REMEMBER IN A RECESSION
It means less business, but not NO business. Smart business leaders will get out there and fight hard for the business that is left, while the not-so-smart ones will be "singing the blues" about how the downturn has hurt their sales. Get out there and sell--hard.
ANOTHER THING TO REMEMBER IN A RECESSION
Quit spending. Don't just issue the orders. Follow up. Sit and look over the shoulder of your Accounts Payable people. You'll be amazed at the stuff that slips through. And plan ahead. You can ship an envelope full of stuff via USPS Priority mail and get it there in 2-3 days for $4.60, or you can FedEx it for next morning delivery for $35. Which do you think is smarter (more economical) to do?
A FINAL THING TO REMEMBER IN A RECESSION
It will get over--someday--but until it does, it will be ugly. Don't kid yourself that "it can't get that bad." It can, and it probably will. Develop a plan B, and plan C, such that when your initial plan "A" doesn't work out, you've thought about your fall-back plan. Quick decisions are even more important during downturns, but not decisions that are made without careful thought. You can think about and plan for many of the possible problems--so do it, now. When you have to act fast, you'll be glad you did.
Best, John
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