The document discusses strategies for businesses during times of economic uncertainty. It argues that while traditional markets will change permanently due to the crisis, new opportunities will also emerge. It recommends taking a strategic approach by considering different scenarios of government and consumer behavior, identifying areas of resilience, and making bets in sectors with high potential upside. Scenario planning is presented as a tool to address uncertainty by exploring various outcomes. Four scenarios are described that could potentially develop: Euro-merica, Lever Lever Land, Back to Basics, and Do-Over.
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Jerry Hughes,
Managing Partner
The Upside to the
Downturn
Placing Strategic Bets in a Time of
Extreme Uncertainty
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“How I learned to stop worrying and
love the crisis.”
Copyright 2009 Aventine Partners, LLC 1
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Core ideas
Attitude: Optimism!
Tools: Scenarios
Content: Euromerica, Lever Lever
Land, Back to Basics, Do-Over
Copyright 2009 Aventine Partners, LLC 2
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We’ve moved from a period of variability
to extreme uncertainty
Professional Forecaster Forward GDP Growth
Probabilities
2006 2008
50%
40%
Mean Probability
30%
20%
10%
0%
< -2% -2 to -1 to 0 to 1 to 2 to 3 to 4 to 5 to > 6%
-1% 0% 1% 2% 3% 4% 5% 6%
Source: Philadelphia Federal Reserve Bank Forward GDP Growth
Copyright 2009 Aventine Partners, LLC 3
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The bad news: Your traditional markets
will never exist again
Consumer demand patterns are changing, possibly
permanently
The government will be driving more
supply, demand, and regulation than in the past
Many buyers, both business and consumer, are
actively reevaluating their supplier relationships
The fact of the economic crisis will change
priorities and the way decisions are made for the
foreseeable future
Copyright 2009 Aventine Partners, LLC 4
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The good news: Your competitors’
traditional markets will never exist again
Your competitors face the same challenges
The downturn will weed out competition in many
markets
The incumbent’s advantage is greatly diminished
Fiscally conservative companies with tight
operations will survive
The benefits of hunkering down are greatly
diminished
Copyright 2009 Aventine Partners, LLC 5
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The really good news: Brand new
markets with no incumbents will emerge
Public sector investment in certain industries will
outstrip current supply, necessitating the entry of
new competition
The price of entry to new markets will in many
cases be low
Existing businesses that have related assets, know
how, or relationships to leverage will have an
advantage
Copyright 2009 Aventine Partners, LLC 6
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Three pieces to successful transition to
new businesses
Avoid catastrophic losses
Survive to your future
Tightly manage legacy businesses
Fund your future
Gain exposure to high-upside sectors
Be there when the future happens
Copyright 2009 Aventine Partners, LLC 7
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“Ninety percent of life is just showing
up.”
Copyright 2009 Aventine Partners, LLC 8
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Scenario planning is an effective tool for
addressing extreme uncertainty
Popular business tool in 1980s and 1990s, but fell
out of favor
Theillusion of quantifiable risk and Monte Carlo
simulations
Identify
areas of greatest potential change and
uncertainty
Think
of the consequences of a variety of extreme
outcomes
Copyright 2009 Aventine Partners, LLC 9
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Four scenarios driven by levels of
government activity and consumerism
High
Government
Activity High Consumerism Low
Low
Copyright 2009 Aventine Partners, LLC 10
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Examples for some of our scenarios
already exist, but not for others
Sweden
France
Finland
Italy
Netherlands
Brazil
Russia Britain
Spain New Zealand
Germany
Poland
Australia
Romania Japan USA Switzerland
South Africa South Korea
Turkey
Argentina
Mexico
China
India
Malaysia
Taiwan
Copyright 2009 Aventine Partners, LLC 11
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Examples for some of our scenarios
already exist, but not for others
Sweden
France
High Government
Finland
High Government
Italy Involvement
Involvement Netherlands
Moderate
High Consumerism Russia
Brazil
Spain
Consumerism Britain
Germany New Zealand
Poland
Australia
Romania Japan USA Switzerland
South Africa South Korea
Turkey Low Government
Low Government
Argentina
Involvement
Involvement Mexico
Moderate
High Consumerism
China
India
Consumerism
Malaysia
Taiwan
Copyright 2009 Aventine Partners, LLC 12
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The current path seems to be toward a
European model
Key Themes:
• Public trades affluence for EURO-MERICA
security
• Heavy state involvement in High Government Involvement
investment projects, regulation Moderate Consumerism
and social safety net
• Sector-specific support and
protectionism
• Dampened consumer demand
keeps inflation in check
• State capitalism increases
political friction among nations
and blocs
• Protectionism and import
substitution policies reverse 2009 Aventine Partners, LLC
Copyright 13
trade imbalances
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The temptation to simply kick-start the
consumer economy may prove strong
Key Themes:
LEVER LEVER LAND • Government manages financial
sector to resume credit-driven
High Government Involvement growth
High Consumerism • Political pressures lead to
explicit policy of socializing debt
• Rekindled demand sparks
inflation, weakened dollar, and
renewed financial crisis
• Trade collapses due to locking
up of international financial
system
• Second crisis is worse than
2008/2009
Copyright 2009 Aventine Partners, LLC 14
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Society may adjust steadily, giving the
market economy time to right itself
Key Themes:
• Steady rebalancing of consumer
demand enables market
mechanisms to handle
adjustment
• Greater emphasis on work and
leisure balance moderates
workforce shocks and drives
productivity gains BACK TO BASICS
• Government maintains
increased regulatory activity in Low Government Involvement
selective sectors, particularly Moderate Consumerism
health care
• Market- and state-led
developments reduce income2009 Aventine Partners, LLC
Copyright 15
disparities
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Resilient foreign markets may provide
the fuel to re-stoke consumer demand
Key Themes:
• The saving/spending
relationship between East and
West resumes
• Off-shoring trends continue, as
does the increase in foreign
ownership of Western business
• Raw material prices resume
DO-OVER upward trajectory
• Controls on consumer debt
Low Government Involvement levels are maintained, leading to
High Consumerism an inability for many to resume
past consumption levels
• Loss of international prestige
and reduced standard of living
Copyright 2009 Aventine Partners, LLC 16
fuel political and social unrest
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Finding opportunities and areas of
resiliency
LEVER LEVER LAND EURO-MERICA
High Government Involvement High Government Involvement
High Consumerism Moderate Consumerism
DO-OVER BACK TO BASICS
Low Government Involvement Low Government Involvement
High Consumerism Moderate Consumerism
Copyright 2009 Aventine Partners, LLC 17
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Recap
The crisis will produce winners
Incumbents will be de-throned, but
having existing customers, assets, and
knowledge creates advantages
Place strategic bets based on
possibility of high upside
Copyright 2009 Aventine Partners, LLC 18
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Acknowledgements and Further Reading
Shell on scenarios (www.shell.com/scenarios)
Finnish Global Scenarios (www.eva.fi)
Scenarios and Strategy (scenariosandstrategy.wordpress.com)
UmarHaque on Capitalism 2.0
(blogs.harvardbusiness.org/haque/)
Niall Ferguson on The Great Unwinding
(http://thebankwatch.com/2009/02/04/the-great-
unwinding-part-1-2009-2012/)
Spengler’s Critique of “Lever Lever Land”
(http://www.atimes.com/atimes/Global_Economy/JL25Dj02
.html)
Copyright 2009 Aventine Partners, LLC 19
Editor's Notes
The subtitle to this presentation is “How to place strategic bets in a time of extreme uncertainty. If that sounds too consultanty for you, my other working title was, with a nod to Stanley Kubrick and Peter Sellers, “How I learned to stop worrying and love the crisis.” When asked to do this presentation a couple of months ago, things looked pretty dire. My take is not so much to escape from the reality of what we face with humour, or be pollyannaish about the exceptional ability of America to face down whatever problems we confront, but rather to keep perspective and realize that there are always winners and losers in every situation, and when conditions change dramatically, there’s no reason to believe the winners are pre-determined. And for most of us in this room, that is a good thing.
There’s no formula or magic answers to getting through these difficult economic conditions. Rather, I would like to talk about an attitude – reasonable optimism, some tools to use to identify areas to place some bets, i.e. scenario planning, and give you what hopefully will be some thought provoking content, which is to say touch on four specific scenarios for the way economic and social conditions might play out. We’ve titled them “Euromerica, Lever Lever Land, Back to Basics, and Do-Over.” But more on that later.
In a certain sense, strategy is the art of preparing for and confronting uncertainty. In part it is defensive – shoring up weaknesses and anticipating changes in your market or competitive environment. In part it is offensive – being the author of those changes.How you think about strategy depends in large part about the degree of uncertainty you are facing, or think you are facing. The fact is over the past two years we have moved from a period of low perceived uncertainty to extreme uncertainty about the future.Here we see the consensus forecasts for GDP growth in the coming 12 months compiled by the Philadelphia Fed.This chart only partially illustrates the point, but the fact is that we were collectively fairly confident only two years ago that our economy was on a steady growth trajectory and the only real question was how much we would grow. Compare that to today, when we don’t know whether we are going to grow or contract over the next 12 months. And as you all certainly realize, the difference to our economy and society between growing 1% and shrinking 1% is enormous.
One of the things that is clearly different about this recession, downturn, or crisis, is that it’s impact goes well beyond short term economic health. It has already ushered in a dramatic change in political power and assertiveness. It is also changing consumer behavior in ways that may be much more lasting than the temporary retrenchment of spending that we’ve seen in the past. It has fractured long-standing business relationships as customers have changed priorities, cut spending, or reacted in fear for the viability of traditional suppliers. The bottom line is that for most businesses, the markets that you served only two years ago will never exist again.
But this is not so dreary, when you think about the fact that what is true for you is true for your competitors. They will face the same challenges, and many of them are going into this weaker than you. Financial risk. Customer risk. Employee risk. Operational risk. There are a host of threats that are heightened right now, and if you can survive, you’ll find yourself competing for food in a culled herd.The other way to look at this, outside of markets that you may be in right now, is that the incumbent’s advantage is greatly diminished. Buying behavior is changing, people have new needs, customers are switching business relationships. If you’ve been conservative and can withstand the economic pressures, you’ll make it through this tough stretch. But simply hunkering down and trying to protect your little patch of earth won’t help much because too much is changing for a simply defensive posture to work.
So what’s the really good news? New markets are going to emerge more quickly. And there are no incumbents. Public sector spending in some industries will far outstrip current supply. For example . . . . . Some markets are relatively new. The price of entry will be low.
At Midway we do work to help clients resposition their businesses strategically, and right now many are feeling a more urgent need to do that. It’s generally a two-step process. The first is to survive and stay in the game, and tightly manage your existing business to generate the cash to fund your future opportunities. There’s plenty to say about running a tight ship, but I suspect most of you have been giving that plenty of thought over the past year or more. So, I want to talk about those future opportunities. In some cases the new direction may be clear and you’ll want to make a dramatic shift. But given the big uncertainties surrounding us, the better strategy might be to place a number of bets, getting exposure to sectors or new opportunities with high-upside potential.NassimTaleb’s ideas about the Black Swan.
So what do you need to do to transition to promising new businesses? Well, I thought I had a perfect opportunity to fit the baseball theme with the quote, “90% of life is just showing up.” I thought that was Yogi Berra, but it turns out that Woody Allen said that. In either case, there’s a lot of truth to it. You need to get in the vicinity of the opportunities. Many of these are so new that no one has figured them out. But imagine if you were working for an internet company in 1995. Doesn’t matter which one. You were there and you saw enough ahead of everyone else that you found your way to the winners. Those opportunities are out there again. You just need to get near them.
So where do you want to place your bets? That’s what offensive strategy confronting high levels of uncertainty is about.I would like to remind you of a tool that used to be widely used and then fell out of favor: scenario planning. For those who only know scenario planning by reputation, it emerged as a well regarded business tool in the 1970s, especially following the economic shocks triggered by OPEC and the spike in oil prices. Shell Oil had adopted this tool and, having thought through the consequences of the oil shock better than its competitors, thrived in the new environment. But while scenarios became widely used through the 1990s, the tool fell out of favor. Why? Well, my perspective is that the commonly held beliefs about the level of risk we faced and how to manage that risk changed. We increasingly felt that, after the fall of the Soviet Union and the triumph of democratic capitalism, we were in an era of increasing prosperity where we might hit a few bumps in the road, but the direction was clear. The only questions were about the pace of growth and when we would hit the bumps. Sure, there was the uncertainty about technology and social change, and some industries were likely to disappear (think newspapers). But the general direction seemed clear. The only question was really how quickly we would get there.Scenarios didn’t seem to fit this view of the future. They tended to describe a variety of very different, extreme outcomes, and didn’t favor one over the other. In an age when extreme outcomes became increasingly difficult to take seriously, the tool wasn’t relevant.While we thought risk was diminished, we also became enamoured with new tools that seemed to give us a scientific way to measure and manage those risks. Instead of scenarios, people started using things like Monte Carlo simulations and other highly quantitative ways to forecast and manage risk. Well, we’ve seen that those don’t work well because the extreme outcomes are underestimated and they break down. So, now it’s time to start taking the extreme outcomes more seriously again.
The way scenario planning works is to identify the dimensions that are more likely to produce the biggest changes and are most uncertain. Many businesses will look to factors that affect them significantly – companies like Shell are obviously concerned about things that touch on the energy markets and geo-political developments. But we believe right now a couple of dimensions have emerged as dominant for everyone and can be used to generate scenarios that are useful to most businesses.We see the level of government activity in the economy as a big driver of potential change, as well as the level of consumerism in America, and to a lesser degree the rest of Western society.We had been in an era of relatively low government activity in the economy and relatively high level of consumerism – which can be discerned both by the degree to which consumer demand drives the economy and the balance of consumption vs. savings by individuals. We are now moving in the opposite direction on both dimensions – toward more governmental activity and less consumerism. But where will we end up? It is just as easy to foresee falling back to old ways as it is to see our staying in a high governmental actvity, low consumerism world for the intermediate term. Or we could revert on one but not the other. So what would these worlds look like, and what might those scenarios tell you about ideas for new businesses, where you want to place strategic bets, and where you might need to take defensive action?
One of the interesting things about scenarios along these dimensions is that a couple of these worlds are reasonably well known to us. We can look at our economy and society today and others using data about the degree of governmental involvement and the level of consumerism. Here I’ve plotted some data from 2006. Along the Y axis we use Taxes (at all levels) as a percentage of GDP as a reasonable proxy for the level of governmental involvement in the economy. It doesn’t hold in all cases (see China), but among most of the Western countries it lines up reasonably well with what we understand to be true. See France and Sweden.While we could look at things like the level of consumer consumption or savings rates to understand consumerism, the scenarios we have in mind tap into something more fundamental, which is the attitudes toward material consumption as important and, on the flip side, the level of anxiety around not having stuff to survive. It turns out there is a 20+ year series of global surveys called the World Values Surveys that gets at this stuff. A byproduct of that survey is something called the Post-Materialist Index, which attempts to measure the degree to which a society cares less about having things for survival and prestige and starts valuing more things like the environment or leisure. This is a bit simplistic, and without getting into the nuances of this you can see that along these dimensions the US is a bit toward the lower left, while most of Europe is toward the upper right. Some countries remarkably so. So, one of the things we can look to is the European model for hints as to where we might be going. This isn’t remarkable in itself, but it gets interesting when you start to think about whether there might be room for two Europes in the world.The other interesting thing is to consider that two of these quadrants really haven’t been tried yet. We have a few countries camped out here in the upper left, but they aren’t extreme and there probably isn’t much example Poland or Brazil can set for where America might go. The lower right is even more interesting. There are no counties that seem to be characterized by low governmental involvement and relatively low levels of consumerism. There is plenty of reason to believe in American Exceptionalism, and it can be plausible, and very interesting, to think about America ending up in one of these worlds and doing new things.Now, let’s get into, at the very highest level, some scenarios based on these dimensions. Now remember, the idea is to describe plausible worlds that could emerge at extreme ends of the dimensions that we think will be important. These aren’t predictions, and it’s not about foreseeing specific events or trends. But, getting back to the core idea of finding opportunities in this downturn, the challenge is to think about the opportunities that haven’t yet emerged. So these scenarios are meant to get you thinking and hopefully spark some new ideas. A business that has placed some bets that might work out in any of these worlds has a nice portfolio of opportunities. A business that will be clobbered if one or more of these comes to pass should probably start making some adjustments.Also as a preface, we created these by reviewing and collecting ideas from dozens of reports, forecasts, and scenarios out in the public domain and trying to deal with the current environment. I would be happy to help anyone tap into these sources if you’re interested.
One of the interesting things about scenarios along these dimensions is that a couple of these worlds are reasonably well known to us. We can look at our economy and society today and others using data about the degree of governmental involvement and the level of consumerism. Here I’ve plotted some data from 2006. Along the Y axis we use Taxes (at all levels) as a percentage of GDP as a reasonable proxy for the level of governmental involvement in the economy. It doesn’t hold in all cases (see China), but among most of the Western countries it lines up reasonably well with what we understand to be true. See France and Sweden.While we could look at things like the level of consumer consumption or savings rates to understand consumerism, the scenarios we have in mind tap into something more fundamental, which is the attitudes toward material consumption as important and, on the flip side, the level of anxiety around not having stuff to survive. It turns out there is a 20+ year series of global surveys called the World Values Surveys that gets at this stuff. A byproduct of that survey is something called the Post-Materialist Index, which attempts to measure the degree to which a society cares less about having things for survival and prestige and starts valuing more things like the environment or leisure. This is a bit simplistic, and without getting into the nuances of this you can see that along these dimensions the US is a bit toward the lower left, while most of Europe is toward the upper right. Some countries remarkably so. So, one of the things we can look to is the European model for hints as to where we might be going. This isn’t remarkable in itself, but it gets interesting when you start to think about whether there might be room for two Europes in the world.The other interesting thing is to consider that two of these quadrants really haven’t been tried yet. We have a few countries camped out here in the upper left, but they aren’t extreme and there probably isn’t much example Poland or Brazil can set for where America might go. The lower right is even more interesting. There are no counties that seem to be characterized by low governmental involvement and relatively low levels of consumerism. There is plenty of reason to believe in American Exceptionalism, and it can be plausible, and very interesting, to think about America ending up in one of these worlds and doing new things.Now, let’s get into, at the very highest level, some scenarios based on these dimensions. Now remember, the idea is to describe plausible worlds that could emerge at extreme ends of the dimensions that we think will be important. These aren’t predictions, and it’s not about foreseeing specific events or trends. But, getting back to the core idea of finding opportunities in this downturn, the challenge is to think about the opportunities that haven’t yet emerged. So these scenarios are meant to get you thinking and hopefully spark some new ideas. A business that has placed some bets that might work out in any of these worlds has a nice portfolio of opportunities. A business that will be clobbered if one or more of these comes to pass should probably start making some adjustments.Also as a preface, we created these by reviewing and collecting ideas from dozens of reports, forecasts, and scenarios out in the public domain and trying to deal with the current environment. I would be happy to help anyone tap into these sources if you’re interested.
Let’s talk first about what might be the most obvious future given the direction we’re currently on with Washington embarking on a littany of unprecedented things to take charge of the economy. Not trying to, don’t need to, debate good or bad. The point is, there is a very plausible future that might pan out that takes us in the direction of Europe. Some not so startling ideas. Trading affluence for security. We’ve seen this in Europe for years, and generally derided them for it. But from Detroit executives looking for governmental intervention in their failings to the millions of out of work who might be very attracted by the idea of unlimited unemployment insurance right now, our priorities as a nation are changing. The change may or may not be temporary.We see the state getting involved in the economy is a big way not seen since the 30s and 40s – mapping out areas for strategic investment, supporting “promising” sectors of the economy, and regulating the more dangerous ones. While many have been worried about the inflationary potential of this administration’s fiscal policies, there are plenty of reasons to believe we might be in for deflation instead – driven not just by low consumer demand but demographic changes as the baby boomers are moving into a low-consumption phase of their lifecycle. Think Japan in the 90s.But the really interesting thing is to think about what happens globally when America the open-markets capitalist top dog goes away, growth isn’t lifting all boats, and large state controlled businesses start competing against each other in a very much home field, visitor field environment. That could lead to a reemergence of protectionist policies a la the 1930s. Countries, already in the business of favoring certain sectors of the economy, could pursue import substitution policies. Global trade would decline, and with it immigrant labor.So, as a business, what are the opportunities? At the macro level, first, some obvious ones like energy or health care. And you should figure out how to sell to governments and get into the government procurement game. But what about industries that have seen production and service delivery move offshore? This could reverse itself, and businesses that have either survived the foreign competition over the past decade or those who can position themselves with domestic production now, likely on the cheap, stand to benefit. Conversely, if you currently benefit from, or rely on, cheap inputs from abroad, think through how to protect yourself if that cost advantage disappears due to tarrifs or other protectionist policies.At the micro level, and much harder to describe in detail, will be opportunities to meet consumer needs that look more European. Buy less. Be good to the environment. Consume more leisure. But again, we already have some pretty clear models for what that looks like.
How about one of the unchartered quadrants – heavy government and unabated consumerism? By the way, the label Lever Lever Land is not our creation, but was coined by David Goldman in a column for the Asian Times Online.This doesn’t seem so far fetched to me. We haven’t exactly heard president Obama plead for people to help out by “Going Shopping”, but the fact is that we don’t have a model or track record of growing the U.S. economy that isn’t consumer led. When eventually we have politicians seeing GDP growth rates and unemployment numbers being the only thing standing between them and a new life in the private sector – an even scarier fate than it used to be – stoking the fires of consumption will seem pretty attractive. Pushing lending up and socializing debt will create capacity for consumer spending, but against a backdrop of a weakened international financial sector and lower confidence in the dollar, this could produce the mother of all crashes. This decisively leads to the end of U.S. political and economic leadership of the world.Frankly, it’s hard as an American to even imagine the upside or opportunities in this scenario. There probably aren’t many. We would probably see a very similar trend of protectionism and import substitution as in the Euromerica scenario, but more extreme. There will also likely be a boom in private security, public safety, and military expenditures – but with a focus on basic, not advanced technologies. Labor will be plentiful, especially as the retirement savings of millions will now really be gone and these people will stay in the workforce. And energy prices will be low, not only due to lower overall demand, but any OPEC discipline will likely crumble and the political will to tax carbon emissions in any form will disappear. Production methods and assets that are uneconomical with oil > $30 may become productive and valuable again.
The more promising of the uncharted quadrants has the U.S. navigating through the crisis sticking with a cultural change away from high levels of consumerism and reverting to a smaller, but vigilant, government. This is a pretty positive and hopeful scenario, and perhaps it’s attractiveness might lead one to overstate its plausibility relative to some of the less attractive outcomes we’ve imagined. But in this world consumer demand adjusts, and the market adjusts with it. We get a culturally lead reduction in work and increase in productivity. Many of the economic sectors that meet widely desired social goods, such as related to the environment and health care, see growth and innovation. But this is not dominated by the government but rather responds to the market and shifting consumer demands and priorities.Where are the opportunities here? There will likely be an increased demand for goods and services that reduce social costs and create ways to benefit from being socially responsible businesses. Again, Europe may not necessarily lead the way, but give us a window to the consumer attitudes that will drive this. There may be some shift to domestic production similar to what we considered in the first two scenarios, but driven by the higher cost of energy, and therefore transportation, rather than protectionism. However, the trend toward globalization and offshoring of service delivery will continue. We’ve seen this in customer service and IT. Some other areas to look for are other professional services (accounting, legal) and education. I also see the emergence generally of an environment that is more favorable to the businesses represented in this room, largely medium sized businesses, often family owned. The idea of businesses with closer ties to their communities will be attractive to consumers and employees, and it may produce favorable government policies as well.
The last scenario to consider is that we manage through the crisis and find our way back to the familiar environment of a consumer-driven, low government involvement world. For this to happen we would likely need to see a resumption of the saving/spending relationship between the U.S. and Asia societies, particularly China. The impetus would be greater economic resilience in Asian and those countries emerging from this downturn before the West. The difference, if this should happen again, would be that the U.S. is unlikely to be in the driver’s seat this time. We would continue transferring future wealth to our creditors, and Asian/Chinese control of domestic businesses would increase. Eventually we would likely see social and political unrest arising from the loss in American prestige and power on the international stage.Opportunities here? Many of the same opportunities businesses were pursuing two years ago related to being in and serving Asian markets. But while much attention has been paid to providing western goods to the emerging affluent and middle classes – think WalMart, KFC, and Rolls Royce, there will be new opportunities to meet the unique demands of a more powerful and prosperous Asia, and China. Urban crowding and environmental concerns are rising to the fore and will become big priorities if this economic crisis gives China the chance to accelerate its rise on the global stage. The same opportunities will exist to a lesser degree with resource driven economies of the Middle East and Russia.
So, again, the idea here is not to forecast the future but rather to suggest a structured way to generate and evaluate ideas for placing strategic bets on new businesses. If this works for you, there are other scenarios you might find or develop that better address the factors driving your business or adjacent business opportunities. But the key point is that when you think about extremes and big changes you see that small investments and moves that get you in the game in new areas might yield big payoffs down the road.
So, that’s a quick review of some possibilities meant to spark thinking and ideas about where you can find opportunities. To recap, our view is that this crisis brings as much good news as bad to those that can survive. It will produce winners, and most advantages of incumbents are going to disappear. But the opportunities aren’t just going to guys tinkering in garages. Your existing customers, assets, and know how can be repurposed to go after many of the new opportunities. The idea is to recognize that when the world goes through big changes, the payoff to being in the right place can be huge. So where you can, consider placing strategic bets by getting involved in new businesses with high upside potential.
So, that’s a quick review of some possibilities meant to spark thinking and ideas about where you can find opportunities. To recap, our view is that this crisis brings as much good news as bad to those that can survive. It will produce winners, and most advantages of incumbents are going to disappear. But the opportunities aren’t just going to guys tinkering in garages. Your existing customers, assets, and know how can be repurposed to go after many of the new opportunities. The idea is to recognize that when the world goes through big changes, the payoff to being in the right place can be huge. So where you can, consider placing strategic bets by getting involved in new businesses with high upside potential.