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Buggy Whip Lesson |
In many ways, the 19th century continued until the outbreak of World War I.
The 20th century ended with the fall of Lehman Brothers.
by Tom Coyner
JoongAng Daily
In confusing times such as
these, it is natural for people to draw parallels as a way to understand
current events surrounding us. They hope to gain some insight on an
uncertain future. Here are some examples: A recent issue of BusinessWeek
suggested that America of 2009 may learn from Japan of the 1990s. In Korea,
journalists, businesspeople and even some economists refer to the 1997-98
Asian financial crisis as a case study from which they may forecast a
future.
But America is not Japan.
In so many cultural and political ways, such comparisons defy making
accurate projections. And the ?IMF Crisis? was a regional event. It was
relatively isolated from the global economy, compared to the worldwide
crisis we face today.
Today, several public figures in Korea amaze me. Some continue to suggest
the tough times we are facing will be followed by a V-shaped recovery,
similar to what Korea experienced in the Asian financial crisis. When I
recently challenged one such speaker, the well-respected economist
backpedaled. He stated his V-shaped Korea recovery model was premised on the
Chinese stabilizing their chaotic economy within this year.
But anyone following the mass factory closures in China, with the growing
threat of political instability there, is not likely to count on the Chinese
economy being substantially on the mend within the coming 12 months. And yet
one frequently hears this kind of siren song.
If one were to find a meaningful historical parallel relevant to what we are
now facing, it would be Sept. 15, 2008 and June 28, 1914. We can easily
recall when Lehman Brothers filed for Chapter 11 bankruptcy. That in effect
announced the beginning of this global recession. And as any schoolboy can
recite, it was in 1914 when a Bosnian Serb assassinated the heir to the
Austro-Hungarian throne.
Both dates, in real terms, triggered the beginnings of their centuries.
In many ways, the 19th century continued until the outbreak of World War I.
The 20th century ended with the fall of Lehman Brothers. Both 1914 and 2008
were major watersheds.
And we, having just entered this Brave New World, are just beginning to
realize what has happened.
Now that we have been thrust into a major historical shift, we may find our
greatest difficulty comes from not adapting.
Our real challenge could lie in letting go of anything that becomes an
impediment to future survival.
We often cite buggy whip manufacturers as iconic representations of the 19th
century. I am sure many buggy whip companies were thrilled by the initial
explosion of sales orders with the outbreak of the First World War. All the
armies were still largely dependent on horsepower. In other words, most
buggy whip manufacturers didn?t realize their market would soon disappear.
My point is this: our best survival strategy may not be trying to survive a
short- or medium-term downturn only so we can continue to make our buggy
whips.
We may be better off by pondering two considerations. First, this economic
recovery is global and is likely to be U-shaped, if not L-shaped.
Look at the current issue of Foreign Policy. There, the highly
regarded NYU economist, Nouriel Roubini, who correctly foresaw the current
crisis over a year ago, warns of the U.S. facing a 24-month, U-shaped
recovery that could well extend into being more L-shaped in reality. Many
people think Roubini will be proved right yet again.
Given this and other economic indicators, business managers may be better
off planning for the long haul. They probably should not base their business
plans on the relatively rosy projections of consultants and politicians.
The second consideration is determining what survival strategies and tactics
may be necessary to get through the following two years and beyond. Up until
this point, many companies have already done the obvious. Primarily cutting
costs and searching for new means of finance. Some are restructuring, to
maintain profitability while doing essentially the same kind of business.
And some companies are going on buying sprees to pick up the fire sale
bargains that pop up at times such at these. All of this may be fine for
strengthening an existing business strategy.
But remember those buggy whip manufacturers who must have done well at the
beginning of World War I. Ultimately, the most important, long-term
consideration a business planner may need to factor in, is what kind of
business will be viable five years from now.
We don?t have space in this column to go into detail about the future. But
Bob Dylan once sang, ?You don?t need a weatherman/ To know which way the
wind blows.? The reader can probably imagine where we are going.
I will give one scenario. Consider that we will be living in a world of more
independent energy sources. Governments and buyers will demand products and
services that generate smaller carbon footprints. Both consumer and
industrial consumption behavior will be less disposable and more value
centric. Even the defense industry will be ?greener? as nations become
increasingly concerned about contamination.
Regardless of how you view the future, the ultimate question facing you
right now may be this: How relevant will your business be in a very
different world of 2015?
The time to start planning for long-term survival could be now.
*The writer is the president of a technology sales and marketing firm,
Soft Landing Consulting.(www.softlandingkorea.com)