Eleven Ideas for Economic Recovery

by David Hughes, SAS, 11 November 2009

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Management

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David Hughes economic recovery innovation leadership productivity SAS

2009 has been a challenging year for many economies. As we look ahead to 2010, Asia continues to be a bright spot on the horizon. The Asian Development Bank expects developing Asia to lead the recovery from the worldwide slowdown; other analysts believe that countries such as Australia and India never felt the full effects of the recession.

As businesses get back on track for growth, the one pervading message we’re hearing is that they are looking for ways to come out of this down cycle stronger than before. It’s clear that businesses are looking for opportunities to grow.

One retail CTO summed it up well at a recent SAS event when he said, “We don’t want to just struggle through and be hanging by our fingertips when the economy recovers. We want to come out strong.” Thinking long-term has led this retailer’s CEO to investigate real estate purchases at lower rates and to buy up high-end equipment now while the prices are low.

Where can you find long-term strategies for your business? Here are 11 ideas for you to consider:

1. Remember, recessions make us stronger. According to economist Carl Schramm, recessions are part of the normal cycle. They make us stronger and force us to concentrate on strengths. It may be survival of the fittest, but it is never too late to put your house in order.

2. Beware cascading consequences. Joel Barker, futurist and author, warns about unintended consequences. The moment a plan or initiative is executed, you get a ripple of cascading consequences – some good, others bad. Unfortunately, few organizations consider the ripple effects up front. A decision that delivers positive first-order consequences could very well lead to negative second- or third-order events.

3. Understand what creates value. Alarmingly, recession or not, many organizations destroy 400 percent of the previous year’s profit without even realizing it. Companies need to what is valuable to them. Once you know, rebalance or change your strategy to deliver optimum returns.

For example, Chung Ming-Ling, Assistant Vice President of Planning at Fubon Financial Holdings of Taiwan, recognized that activity-based management tools help enable strategic and operational decisions that maximize profits, streamline processes and reduce costs across an organization.

Fubon managed to save US$2 million in its credit card division, reduce the customer service division’s labor costs by 14 percent and reduce product costs by as much as 50 percent within a year upon the implementation of a performance management solution.

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