Responding to the current economic situation

During the past 15 months, the economic landscape has been through a sea change. Managing a company in the next decade will be materially different than managing during the past decade. Every company is now focused on managing through a recession, taking steps to preserve cash, reduce costs and adjust demand expectations. However, for most businesses, this is not enough: a more fundamental response is required. We believe there are three macro changes that will shape the economic and competitive landscape over the next 5-10 years. Each of these changes has important implications for business leaders and what they should be doing today to position the company effectively for the new tomorrow.

Deleveraging by consumers, companies and financial institutions alike is causing demand to decline in most markets. For many companies, the surprise is how much and how fast demand changed in the past couple of months – with one client referring to September as a ‘buyers strike”. And while the decline in demand mandates a quick response, the shift in demand across and within markets has been just as dramatic. With significantly less to spend, customers are rethinking what they need and what benefits they are willing to pay for, making demand more fluid than anytime in recent memory.

All companies now face a burning platform. Decisions made in the next few months have the potential to materially change the value of the enterprise in either direction. A detailed understanding of how value has changed for both customers and shareholders, rapid but disciplined evaluation of alternatives, value-based decision-making and excellence in execution will separate the winners from the losers.

If you want to learn more about any of these ideas please call or e-mail us.