As an attendee at the annual New North Summit in Green Bay earlier this week, I had the opportunity to listen to Dr David Ward, Ph.D., founder and president of NorthStar Economists. Dr. Ward's message, delivered with as much warmth and humor as economists are allowed to express, couldn't have been more clear to everyone in attendance: while conditions are clearly improving in many ways, there's no going back to Kansas, Dorothy, because Kansas as you remember it doesn't exist anymore!
Here are the main points of his argument:
- The labor market is going to take years to "correct", so we should get used to all the impacts of an underemployed workforce;
- People are saving at a rate that is historically higher than at any time in recent history, even though in aggregate they're earning a lot less;
- Consumer confidence, and spending, is not coming back quickly or willingly
- Even with the 2009 equity markets rebound, personal wealth is 20% below what it was in 2007, so anyone who was thinking about retirement plans is probably now thinking about delaying retirement
- Finally, Dr Ward concluded that Americans need to accept that our standard of living has taken some permanent steps backward, with no short-term fixes identified.
Assuming that the good doctor has drawn reasonable conclusions (I'm sure not disputing!), how should this stark reality in front of us affect each of us, as business people, consumers, and U.S citizens?
We could probably start by looking more realistically at the business plans we create. Growth in many markets will come only from taking market share from someone who wants to keep it even more than you want to take it. Market share battles in no-growth markets usually drive pricing down, so only buyers win.
What about your promise to customers? Trust and confidence were the biggest casualties of this recession, so creating a credible case for your ability to more consistently deliver as promised can be a powerful advantage. Forget about flash and wow! An airtight case on predictable ROI could be the sexiest promise you can make.
As far as the way we work, we all need to become pioneers in new forms of collaboration, finding novel ways to pool resources, leverage relationships, and structure teams. My friend (and client) Cheryl Perkins, a globally recognized champion of innovation, was quoted a few weeks ago in BusinessWeek, saying “Often open innovation starts with a burning platform.”
Well, our platform is certainly still burning, which according to Ms Perkins makes now a great opportunity to create new models and ways of thinking. Now is the time when we all need to decide what we want to do about it. Whether or not we embrace that metaphor as an urgent call to action will go a long way to determining whether the pain of this recession lingers interminably, or if we're able to prove the economists wrong with the speed of our recover. With all due respect, Dr . Ward, I'm out to prove you wrong.
