Tim Powell, via his Knowledge Value Chain (KVC) blog reminds us that rough economic times can be fertile ground for companies that go on to succeed on the world stage:
some companies we think of today as world-class leaders were founded and/or grew significantly in recessions or depressions? GE (1876), Hewlett-Packard (1939), Hyatt (1958), Burger King (1958), Lexis-Nexis (1973), FedEx (1973), and Microsoft (1975), to name a few.
Keep thinking. And keep it positive.
I have received many emails from colleagues this week about their impending layoff. Many of these people have been with their organizations for ten and twenty years. They are some of the most talented people I know, and have decades left of valuable work to offer the world.
So where are they going?
It may not feel like this at first, but they are being set free. Not free, as in free-range chickens, where all your food and shelter is provided, but free as in “released into the wild.” Available to form new organizations, able to contribute in unheard of ways, electronically, in person, part-time, for custom projects, for ONE-NIGHT-ONLY! The opportunities are endless. The insecurity as well.
You know what else will be free? Office space. Retail space. Homes in the suburbs.
A quick statistic: The United States has more than 20 square feet of retail space per person, according to Shopping Centers Today.
Italy has 1.1 square feet per person, and still manages to drink fantastic wine and provide charming shoes to all of its female citizens. They make Ferraris and biotech and electronics and they somehow only require 5% of the retail space that Americans have built.
The retail space, like the suburban homes they were supposed to serve, will come crashing down in price over the next two years. Space, particularly ugly space, will be virtually free.
2011: You want to own your own basketball court? Fine. Thinking of starting a university? It’ll probably be feasible. Want to open a roller rink/flea market, but never could find the space? No problem.
These times will be scary for certain, but maybe even exhilerating as well. People and space are going to be freed. What will you build out of it?
With the release of Future, Inc. in Korean and Chinese, I’ve had the great opportunity to do interviews with Asian business magazines. I find that they ask more interesting, more insightful questions than many of their Western counterparts, so they are often fun interviews. The only problem is, once they are translated, I have NO IDEA what they said.
I just finished an interview with Korea’s KRX Magazine, which covers the Korean stock market and business in general, and I decided to post the whole text in English, so someone can appreciate it.
The questions:
The most important trend is away from the philosophy of growth at all costs. For years, particularly in the United States, management has followed a typical playbook – get big, quickly, through borrowing money from private venture capital or public offerings. Then, you can go national or international, reaching bigger markets and gaining leverage over vendors and distributors. Once you have leverage over vendors and distributors, you cut costs by firing excess employees and force downward price pressure on the market. With the extra cash from operating expenses, you buy more national or international companies. For around forty years companies have repeated this formula.
The theme here was BIG BIG BIG. The problem with “big” is that it sometimes comes at the expense of “smart.”
Can’t believe I missed this last November, but Global Entrepreneur Week must have been a blast.
The word ENTREPRENEUR will be very important in 2009 as we build small ideas into new institutions.