As the first month of 2009 approaches its end, and the global euphoria surrounding last week’s inauguration takes on a more refined and practical attitude, North American economies continue to struggle through declining demand, bracing themselves for still worse news. Presumably though, it’s only a matter of time till things are turned around, confidence grows, stimuli take effect, and ‘things’ get back to ‘normal’. Will it really be normal, or will it be a whole ‘new normal’?
The North American economy, it is said around the world, has been the trigger for a global recession. It appears, interestingly enough, that in international circles, the most dramatic responses to the current economic conditions are those being executed, not by US-based organizations, but by those headquartered in Europe. Maybe it’s just a current limited sample size, but based on feedback and my mini-survey, the most significant reluctance to participate actively in current markets seems to be on the part of EU headquartered organizations. The current climate is definitely supporting cautious behavior all over, but the sense one gets from Europe seems a bit more drastic. Maybe this is a short-term net effect, a retrenching if you will, but if it in fact is a significant impact, and let’s argue that it is for a minute, just what does it mean for non-EU-based organizations in our sector?
I’ve spoken previously about the fact that those organizations that position well through challenging times reap the benefit in more positive markets. Let’s superimpose that reality on my observations above. Let’s also assume that the immediate future economic environment supports or at least recognizes those closest to it. In this case I’m speaking of an environment where doing business locally where job creation and support is extremely visible is a strongly supported behavior. If this is the case, and if my theory above holds true, then the next twelve to twenty-four months may be a period of reorientation in many sectors, including ours, where organizations without strong vesting (both financial and cultural) find themselves on the outside looking in.
I’ve been accused many times in the past of being an optimist. I’d like to suggest that perhaps it’s better described as being an optimistic opportunist. And in every business environment I’ve yet observed, there are huge opportunities. While I certainly was not around during the Great Depression, I have heard the stories about those that sought out and succeeded in understanding the business opportunities the climate of the day offered.
So it seems once again to me, that these challenging times offer significant opportunities as we, as an industry, create our ‘new normal’. Perhaps what’s in store is a redefining of the supplier space, perhaps it’s a change to buying relationships and terms. Perhaps it involves North American and Asia-based organizations capitalizing on the ‘gap’ in market to take an expanded stake, and perhaps it means that smaller, leaner, innovative, dynamic organizations capture more of the value-add of their technology advancements (and margins along the way) , and perhaps it is a fundamental reshaping of players, leaders and channel strategy in our marketplace.
Whatever the details, there is one certainty. There will be a new normal and not all organizations will have the capability, or the ‘equipment’ to play.