First of all, my best wishes to all my readers for a happy, healthy and prosperous 2012! But the new year is hardly more than a week old and our e-inboxes are already flooded with messages of bad news:
The Euro Collapsing!
Middle Class Drowning!
Gold Skyrocketing!
We’re in the Grip of Inflation!
No, No, Deflation!
Now, don’t get me wrong. I am in total agreement with the doom-and-gloom artists that the world is a volatile place, that there is much uncertainty, and that the future remains utterly unpredictable. But are those reason enough to slip into a state of collective doom?
Over the Christmas holidays, I though more about this state of affairs and what became clear to me is that much of the gloom is the result of uncritical recycling of the same old news. This is done to the point that people can no longer see the full spectrum of challenges and opportunities and they latch on to thenegative.
So, to do something about it, I decided to give myself an assignment. It was as follows:
“Try to find three pieces of good news, not widely reported, not placed in the proper context or perspective, and once you have found these pieces of good news, share them with as many people as you can”.
And you know something? I found those pieces of good news! Here they are:
1. Manufacturing
Employment and output in the manufacturing sector appear to be on a structural upswing. With all the weaknesses in the American economy, (retail, financial services, real estate), manufacturing stands out as an area of strength. In fact, manufacturing companies have added jobs two consecutive years in a row!
A survey conducted by the Institute of Supply Management has shown more companies planning to hire than to fire in every month since October 2009. That string of 27 months is the longest such string since 1972!
Major corporations such as General Electric and Boeing are planning or are in the process of bringing manufacturing jobs back to the shores of the U.S.A. Incredibly, Toyota just announced that it is embarking on a strong EXPORT program of Toyota’s Made in the U.S.A., rather than exporting them from Japan!
At the second tier of manufacturing, a specialty manufacturer called Fellowes announced that they are bringing the production of certain types of paper shredders back to the U.S. from China.
In a broader context, the many changes taking place within manufacturing technology may have much to do with this. For example, “Distributed Manufacturing”, (making small batches of product close to the distribution pipeline), is gaining attention as an increasingly viable alternative. In some cases, this puts an end to the global supply chains and makes it possible to produce in a high-cost labor environment. And it is not just a cost issue either. Flexibility of marketing and offering variety to satisfy regional and local tastes are equally important variables.
2. Energy Independence: a step in the right direction
Last year was the first since 1949 in which America exported more fuel than it imports. The U.S. still imports around 9 million barrels of crude oil every day, but soaring exports of refined petroleum products are converting it into a net exporter. In the first nine months of 2011, the U.S. imported 690 million barrels and send 754 million barrels of petroleum products abroad to countries including Mexico, Brazil and the Netherlands.
The reason? “We are simply not using as much”, says an analyst at the Energy Information Administration. “Prior to 2008, basically anything we produced, we used”. “A sharp rebound for the U.S. economy could make it a net importer again, but this looks like a trend that could stay in place for the rest of the decade”, says the global director of oil at Platts, the oil and energy market tracking firm.
To me, these two examples are like green shoots of rejuvenation, tell-tale signs that the U.S. Economy is adapting to a new dynamic, and in the process correcting imbalances that the 30-year old mantra of ”America as the Consumer Society of Last Resort” had caused.
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These two trends are also positive because they help reduce America’s structural trade deficit, and put the focus on value creation rather than on value consumption. If these two trends continue for a couple of years, we may find ourselves having solved at least one huge problem, especially in the broader context of trade relations with the rest of the world.
And now to my third item of good news:
3. Crisis Resilient Business Models
Whenever there is a financial or economic crisis such as the one we experienced from 2008 to 2010, many companies in a given industry suffer revenue loss and a decline in profitability. But there is also a small group of firms that appear to be the exception. Despite the downturn, their sales keep rising, their bottom line remains healthy and in some cases even improves. They have a characteristic in common that can best be described as
It is difficult to pinpoint this resiliency in any specific way, as if all of them had preferred access to a set of magic bullets that protect them from the vagaries of the next crisis that lurks around the corner.
These crisis-resilient businesses cannot be defined in terms of demographics or size. Some are operated by older entrepreneurs, some by younger ones. Some are directed by women, some by men. Some are very large, others are much smaller and often compete against players with far more resources and muscle.
Geography is not a defining characteristic either. I see these firms all over North America and Europe. Is it limited to certain industries perhaps? Not really! Services firms, resellers and manufacturers, you find them everywhere!
After much thought, I have come to the conclusion that crisis-resilient business models result from a combination of harmonious actions informed by values and beliefs that approach risk in a very different way.
On the one hand, these models set limits and say “NO” to business opportunities eagerly embraced by more traditional types of companies. On the other hand, crisis-resilient business models have a knack for raising the bar to new extremes on a whole host of other parameters, such as customer service, and embracing new technologies.
In my next blog, I’ll flesh this out in more detail. For now, I can say one thing and that is that crisis-resilient business models are much better learners than their more traditional counterparts.
So, here you have three pieces of good news, that in my opinion fly in the face of the doom-and-gloom industry. In closing, I invite you to join me in pushing back on the merchants of doom, by taking a renewed focus on positive news and developments and on the human ability to make our world a better place, rather than succumb to the parroting of fear.
If you have some good news to share, send me an email. I will compile a list of each and every of your contributions, and recycle that back to all participants in this push-back drive.
In turn, you can share your list with all your friends and acquaintances. Let’s get our own worlds back on an even keep, work hard, and recommit like never before to good business practices that create value for the present generation and the next. Stay away from gambler, short sellers, speculators and merchants of doom.
