Behind most news stories and comments made by industry veterans this year, there is one key theme that has loomed in the background. While it is always present in life, this key concern has become a much bigger deal thanks to the global economic downturn and changes in how companies are doing business. That theme is concern over the unknown.
From massive changes in federal government programs, rising government deficits, and the sinking global value of the dollar to long-term changes in consumer buying patterns and major overhauls of business strategies, nothing seems easy to predict any more. The fear of the unknown has caused banks to restrict capital to businesses. Companies have slashed inventories to record lows. In some industries, companies have reduced inventories below recession-level consumption patterns, which forced some manufacturers to ramp up production as the economy showed signs of life in the second half of 2009.
The number of layoffs has skyrocketed as the United States faced unemployment levels not seen in decades. Economists have suggested that the U.S. recession has forever changed consumer buying patterns. This may impact everything from the size and layout of homes to the type of cars sold to what constitutes must-have items.
While there has always been a certain amount of concern over what we don’t know, the mounting challenges facing the world, especially the United States, have increased the tension that many people feel. This has caused almost everyone (except the federal government) to think twice before launching new ventures, spending money or incurring significant financial liabilities. Companies have been able to cut expenses, trim staffs and make changes that they might not have felt they could otherwise have made without signaling they were in financial trouble to employees, customers and competitors alike.
There are a number of key uncertainties that should be considered as we think about the future. I have detailed these in my column on page 10 where I make some major predictions. I have put myself on the line by taking a stab at what the future will hold. Hopefully, I will have a better track record then those who predicted the computer revolution would spell the end of mass paper consumption in the country.
Uncertainty almost always invites speculation and prediction about the future. This is our common response to the unknown. While predictions may be fun to make, they can be way off from reality. They can also point out important trends that may come true.
Just because there are some uncertainties in the market, doesn’t mean that business stops or companies should freeze their business strategies. Now is the time for smart players to plan for the future, create flexible strategies that will take advantage of market uncertainties, and make changes that will pay off over the next five years. While you may need to make some cuts, you also need to invest in some new things. If all you are doing is cutting, you probably aren’t setting your organization up to grow in the future.
