News

Resources feel the strain

Depending on the depth and length of the recession, spare capacity in the oil market, which faces supply-side constraints, could, somewhere between 2010 and 2013, return to the low levels seen in 2007 when crude oil prices were skyrocketing. As well, water resources are under increasing strain from population growth, industrialization, and climate change. So plan for a future of resource price increases, volatility, and even shortages.

Globalization under fire

Growth in the globalization of goods and services may stall for a period because international trade has declined along with demand, but will pick up again and is unlikely to diminish for the long run. But globalization of talent will slow for a much longer period if governments tighten immigration restrictions in response to concerns about job losses. Still, the aging of Western populations means emerging markets will keep producing a growing share of the world's college graduates. Globalization of financial services is the most vulnerable aspect of globalization, given how increased linkages among the world's markets led to the current travails, so we can expect greater regulation and central bank co-ordination and perhaps even capital controls. Strategists should stress-test their business models under different scenarios for those three types of globalization.

Trust in business dwindling

Surveys show a precipitous decline in trust in business. For an individual company, a low-trust environment means higher transaction costs as it becomes harder to win and keep customers; lower brand value; and greater difficulty attracting, managing and maintaining talent - not to mention, in the worst case, negative publicity, consumer boycotts, and unwanted regulation. Companies must show they understand popular and political concerns related to executive compensation, risk management, board oversight and the treatment of employees facing layoffs.

Government on the rise

Increased government involvement in business in many Western countries is one of the most striking features of the crisis, as governments take part in decisions that were once the preserve of managers and boards. That means companies must prepare to compete under new regulatory regimes and also recognize that the public sector will grow as a major customer for some industries because of rapid increases in spending.

Management revisited

The financial crisis exposed the limitations of some of the mathematical models that have been pushing management from art to science. Those models will now have to incorporate more realistic visions of human behaviour and demonstrate a more dynamic, integrating real-world feedback. Decision-makers in every industry must take responsibility for understanding those quantitative tools better - how they function, their assumptions, and their limitations.

Shifting consumption

With consumer spending growth slowed, the United States may no longer remain the world's consumption engine and Asia could become the centre of gravity. The exact shape of the future global market is uncertain, but companies should expect slower long-term growth in global consumption, which will mean tougher fights for market share. They should also prepare to shift investment to Asia; focus on older consumers, given the rise in the proportion of such households in Canada, the United States and Europe; and find ways to offer luxuries to people with limited household budgets.

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MARKETING / IN PRAISE OF NON-TRANSPARENCY

In an Internet world and at a time when cynicism about business is high, companies are continually urged to be transparent.

But marketing guru Seth Godin is dubious. He questions whether Apple would become a more profitable or exciting company if it shared its ideas and plans with the world, or if main honcho Steve Jobs was more candid about his health issues.

Mr. Godin doubts we want to read the script for the forthcoming Star Trek sequel now, a year before filming begins.

"Does a magician put on a better show if you know how his tricks are done? Do you want to see how your dinner was made, farm to plate? Really?" he asks on his blog.

He views transparency not as a moral right but as a business tactic. If you run around acting like the things you do will never be seen in public, you likely will get busted. At the same time, marketers tell a story, which is like putting on a show.

"If you can use the tools of transparency to tell that story better, do it! But if your audience will enjoy the story more (and your business will be more likely to succeed) if you apply some misdirection and magic, then why not?" he concludes.

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MANAGEMENT / TURN DOWNTIME INTO RELAX TIME

Saskatoon consultant Patricia Katz has always worried when the summer downturn in her business came. But she says that, if like her, you find predictable periods of down-time in your year, accept that seasonal adjustment is a perfect time for reflection, planning, writing, program development, marketing, exercise, vacation, and just plain relaxing. "Let yourself relax into an openness of time and space that may be tough to come by during busier, more demanding times," she writes in her Pause newsletter. Among her suggestions:

Reconnect with people.

Invest in your own professional and personal development.

Reflect on recent triumphs and disappointments, mining them for insights you can apply to challenges on the road ahead.

Resurrect your exercise program.

Make your way through the reading and reference backlog.

Above all, trust that an upturn will come.

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POWER POINTS

E-mail humour

Does your e-mail auto-reply when you're on vacation have to be serious? Alberta-based consultant Michael Kerr received one from a client who referred to being kidnapped by her children and forced to go to Disneyworld, and had several other amusing lines that led him to smile and remind him he was interacting with a real human being. So consider adding a little personality and fun to your vacation auto-reply and voice mail messages.

Humour At Work ezine

A new golden rule

We all know the Golden Rule about treating others as you want to be treated. But workplace columnist Alexandra Levit adds another to follow: "If you say you are going to do something, follow through."

Water Cooler Wisdom blog

No barking, please

Burlington Ont.-based consultant George Torok has coined a new word, barketing, which is a cross between marketing and barking like a dog: Barking, he says, is often repetitive, annoying and loud, and always a one-way message. Barketing is marketing gone the way of the dogs, as you annoy customers with your message attempt, try to outshout the competition, sound like the rest of the pack, and display no finesse. Avoid it, he says.

George Torok blog

Password frustration

Internet usability guru Jakob Nielson says that masking the exact letters or numbers people type in for online passwords only confuses them, and does nothing for security since anyone watching the person could study the keyboard. It only irritates password users and causes your business login failures. Jakob Nielsen's Alertbox

Variety paralysis

Most of us are now familiar with the studies that show too many choices paralyze buyers. But many businesses have failed to act. Marketing consultant Drew McLellan says that if you are going to offer lots of variety, be sure you have a good reason for doing so, and help your consumers navigate easily through those choices. The Marketing Minute

PDF assistant

If you occasionally need to transfer a PDF to a Microsoft Word file, try Nitro PDF (www.pdftoword.comv), a free online service to which you upload the PDF and it then e-mails you the results. Steve Bass's Techbite