|
||
 |
||
|
The last time I lived through an economic crisis, the route to recovery was easy: All I had to do was leave the country. I was living in Mexico when the peso was devalued in late 1994, and the place threatened to fall apart. Not only was the economy hanging by a thread, but Mexico also became a dangerous place to live. The brother of one of my closest friends was kidnapped for a month and a half by people who killed a guard as they grabbed him. When my boss came down for a visit and climbed into a cab outside a nice restaurant, he found himself face down on the floor, with a gun to his head. He stayed that way for almost three hours while his abductors tried unsuccessfully to use his ATM card to loot his American bank account. He says he kept envisioning the movie Pulp Fiction, in which a hitman’s shotgun goes off when his car hits a pothole, accidentally killing someone he has abducted. When I transferred back to Silicon Valley in 1996, though, I found myself in the midst of an economic boom. The crisis the U.S. and much of the rest of the world are now facing won’t be so easy to escape. In Mexico, it was clear to me that the economy would bounce back reasonably quickly, and it did. It is not nearly so clear to me what will happen as the world economy tries to rebound from the problems that were exacerbated by the Islamic extremists’ terrorist attacks. What I do know—and what I’ve tried to embody in this issue—is that now is the time to act. As we talked for this issue’s interview [“(Re)Made in the U.S.A.”], re-engineering guru Michael Hammer said companies are least likely to take decisive action at the start of an economic downturn and at the start of an upturn. At the start of the downturn, he said, everyone thinks they can just hunker down and wait it out. At the start of an upturn, everyone is feeling smug, as though they were smart enough to reverse their fortunes. But, Hammer said, we’re now at a spot in the cycle where powerful things can happen. We’ve faced problems long enough that everyone realizes they can’t just wait. They have to act. Hammer lays out a powerful agenda for action, in particular for finding efficiencies by sharing information better with business partners. A feature [“Share and Share Alike”] shows that many manufacturers already are chasing those efficiencies. A column [“Getting to Know You”] explains how to do a large series of little tests to figure out how to tailor products and prices to customer niches, making customers happier while also making them more profitable for the supplier. “Honey, I Shrunk the Profits” explores how technology has tended to move profits from manufacturers to providers of financing and services but can now be used to give manufacturers access to profit streams that may have been closed off to them for years. “The Road Forward” offers a medium-term agenda for dealing with the aftermath of the terrorist attacks. “Hanging Tough” provides a list of role models as we all struggle to demonstrate leadership in these difficult times. In all, this issue is a potent collection of ideas on how to get our companies and the economy to rebound. I’ve never been a fan of rash action. My motto could be, “Don’t just do something. Stand there.” But we’ve been standing there long enough, hoping to wait out the economic slowdown. As Hammer says, in his inimitable way, “This is not going to blow over....Either we deal with it or we have long-term problems.” Cheers, Paul B. Carroll |
