The “Reset” economy

Two great ideas flew past my windshield this week – too late to be included in the recent presentation of BRAVE NEW WORLD, the seminar I presented to two Northern California NARI chapters last week – but too good to be ignored.

The first from Business Week quoted GE CEO Jeff Immelt who named the new economy the “Reset economy”, saying that people’s expectations are in the process of being ‘reset’ from the past decade.  This reset will impact everything from what’s sold and produced to the prices we pay.

The second, an even more striking article, is from the September 2009 Harvard Business Review.  The article, entitled “Doing Business in a Postgrowth Society”, states quite clearly that “Just as unlimited population expansion is untenable, so is unlimited GDP growth”.

The author, Yale Professor James Gustave Speth, goes on to say “Soon, developed countries will begin the move to a postgrowth world where working life, the natural environment, communities and the public sector will no longer be sacrificed for the sake of mere GDP growth and where the illusory promise of ever more expansion will no longer provide an excuse for ignoring social needs.  A postgrowth society will involve less consumerism and higher prices; quality of life will improve in ways too long neglected.”

Read the entire article at http://hbr.harvardbusiness.org/2009/09/doing-business-in-a-postgrowth-society/ar/1

If you’re interested, review the power point presentation on BRAVE NEW WORLD.Brave New World v4.

And send me feedback on these and other ideas, please.  Thanks … may the dog days of summer reward your patience!

Growing Old Awkwardly!

Sub title – Ballad in Plain A (for awful)!

A few nights ago I presented a talk entitled BRAVE NEW WORLD — or is it? to a NARI chapter which included 4 friendly faces, 5  counting the great Pella rep who invited me.  Therefore, I knew a scant 20% of the audience.

Although not quite a disaster, the 45 minute talk was condensed to a fast 30 minutes as we waited for the projector to arrive, the attendees were half what was anticipated as the evening was too beautiful to stay inside for even a moment, and because of time, I never properly introduced myself to indicate why in the world anyone should listen to what I had to say.

And then I delivered a brand new presentation on a subject I had researched for less than a month, although deeply and passionately researched – The Future in Remodeling.

Awful Indeed!

Since then I’ve ruminated on what would have changed the outcome and I realized this morning with blinding clarity the answer:

Do what you know, don’t try anything new or dangerous, stay put and stay safe!

I’ve fallen hard for this subject: the future came upon us as we were living in the present.  Is this the future we envisioned last year, the year before?  I doubt it.

Next year will come upon us based on what we do now …. so in fact the study of the future is as much a study of how effectively we act now on what we want to be then.

And I want to be challenged, I want to be excited about new ideas and prospects, I want to fall and fall awkwardly because I’ve tried something absolutely terrifyingly new.

But part of me wishes that those few days ago I had given a presentation I’d given many times before, on subjects I know inside and out …. and felt competent and graceful.

Or do I?  Can we really be alive and engaged if we only do what we always did?  Do we want to be a ‘one trick pony’, as Paul Simon sang, or do we want more?  If so, we have to be prepared to grow old not gracefully, but awkwardly.

In the meantime, I’ll be thinking it over, hiking on the verges of Mt. Tam, drinking beer on the beach and listening to The Felice Brothers.

You, have a good weekend too!

And if you’d like to read the entire presentation including lots of footnotes and an in-depth bibliography, download it from my website:

www.remodelservices.com.  Go to ‘downloadable files’ and choose BRAVE NEW WORLD!

Brave New World … or is it?

In putting the final touches on a new presentation I’ll be giving twice this week in Northern California entitled “Brave New World – or is it?” I stumbled upon a great website entitled “FuturistSpeaker.com” and read the article entitled “When Systems Collapse”.  Read it here:

http://www.futuristspeaker.com/2009/02/when-systems-collapse/

I realized upon reading the article and the previous article even more fascinating entitled “Fourteen Future Trends for Business in 2009 and Beyond” [read it here:  http://www.futuristspeaker.com/2008/12/fourteen-future-trends-for-business-in-2009-and-beyond/] that everything I wanted to say in the presentation had been included in the following comment from John Locke”, a nom-de-plume (nom de guerre) I assume:

“I look at the situation as being near the end of a big cycle, and the start of a new one. We’re in the midst of a period of creative destruction, and the economics of scale have flipped to favor the small instead of the big. So the solution needs to come from the groundswell of people taking action, not imposed as policy from above.

“Life is the opposite of entropy. It’s a constant struggle between vitality and bureaucracy. Entropy tries to even everything out, but pesky little life pops up to make things complicated. It’s really a great time, an exciting time, a nerve-wracking time to be here. The main point is, big corporations are running headlong off a cliff. Today Microsoft is suing a company over Linux–corporations are desperate to keep innovation at bay for their own self-preservation.

“So a call to action is great, but you should be calling everybody to action, to find ways in their own communities to make sure people can stay in their homes, have enough to eat, and reward companies who support their communities. It’s time to recognize the true consequences of the accounting systems that ignore human, natural, and manufactured capital and only account for finance. No central decision-making body can do this for us, we need to do it for ourselves, stop patronizing places that destroy communities by sending jobs overseas, start helping companies who create jobs.”

The next quote from George Soros [Source: Wikipedia:  “Global financier and philanthropist, George Soros is the founder and chairman of a network of foundations that promote, among other things, the creation of open, democratic societies based upon the rule of law, market economies, transparent and accountable governance, freedom of the press, and respect for human rights.’]

“The recession will last a long time. “Look, we are not going back to where we came from. In that sense it’s going to last for ever.”

The ideas in these two quotes combined to make clear that only by identifying the future trends in OUR OWN BACKYARD can we act, rather than react, to promote future wellness in ourselves.

And from this flow, future wellness in our companies, in our communities, in the world.

Howard Gardner, author of, among other seminal works in the field,  “Changing Minds: the Art and Science of Changing Our Own and Other People’s Minds” says “To change minds effectively, leaders make particular use of 2 tools: the stories they tell and the lives that they lead.”

Determine today what you can do, what we can do, to promote that future wellness that protects us, our kids and grandkids.

After my most recent trip I determined that I would reduce the real “garbage” as much as possible, recycling absolutely everything I could.  After three weeks between trips I averaged less than ½ of a grocery bag full of non-recycled garbage — mostly things like shampoo bottles (I checked, not to be recycled), the aluminum tops on some yoghurt containers and a toothpaste tube.  Everything else went to compost, to paper/plastic/glass recycling.  I felt good!

Water was next – although Seattle and the Pacific Northwest tends to have sufficient water for long showers (second in the list of reasons I moved here in 2006 from the San Francisco Bay Area which tended to experience droughts every other month), I’m timing my showers.  I haven’t resorted to the trick of my Oakland friends – put a bucket in the shower to collect water until heated to the proper temperature: they save enough to water their container plants and they’ve got a large container garden.

This is small potatoes, I know.  Next will be driving – I’ve been able to work with most clients via the web and thereby cut down driving, the Prius gets around 38 mpg in city driving but the monthly (or more frequently) plane trips really blow my carbon footprint.

My goal in the next year is to become conversant in the language and technology of healthy homes. I’ve signed up for a class on the subject at the Seattle MBA, an NAHB member.  I’m excited to learn about what changes, both macro and micro that can lead to both safer homes and better companies.

And as the first line of this post indicated, lead us to a better Brave New World!

More on this next week!

Not like yesterday!

A few weeks ago I spoke at the Pella Expo exhibit during the Pacific Coast Builders Conference in San Francisco.  I was thrilled to participate; I was sponsored by Remodelers Advantage, speaking to great remodelers from the San Francisco Bay Area, many of whom I knew from my years of living and working in the Bay Area.  Additionally I am a GREAT FAN of Pella – last year Linda Case and I were fortunate enough to spend a day at the Pella headquarters in Pella, Iowa learning about Continuous Improvement.  Pella does, as near as I can tell, everything right.  Even during the downturn, they’re still taking care of remodelers, still investing in the future!

The icing on the cake, however, was meeting Mark Richardson, who among other things is an important columnist for Remodeling Magazine.  His conversation at the Pella group was after lunch, typically a difficult time to maintain audience attention.  But he hit the ball out of the ballpark and engaged every member when he talked about how and why we have to treat our clients differently than before, how we had to market differently, how we had to act differently!

Read his column in the June issue of Remodeling Magazine where lays out three important strategies to “create a sense of urgency in today’s market.”

You’ll be glad you did!   Read it here:   [http://www.Remodelingmag.com]

Day/Month/Quarter at a time!

Catching up on the ever-growing pile of reading to do,  I was struck by the number of articles across publications which point to the need for flexibility, the need to be nimble and the great deal of uncertainty which still exists in the US economy and across the globe.

Yesterday I received a periodic e-mail blast from Kraig Kramers, author of CEO Tools – a great book by which to manage – who said [I quote the article in its entirety]:

“Twelve Seasons at mid-year:  it’s a good time to re-evaluate economic trends and what they mean for our businesses.

“What many are seeing is the downturn slowing; some are citing hope as the harbinger.  My own view is that some economic indicators are degrading more slowly, yet there are still so many indicators that overwhelmingly say we’re still sliding into this recession headlong.  And, “hope” is not a good business strategy, so please don’t heed the “hopeful” rhetoric from Government and the parroting by media as hope tries to lull you into running your business as if things are on the mend.  They aren’t (yet), except in a few very rare sectors, geographies and industries.

“Unemployment has become the leading key indicator since it has consumers scared to death and continues to cause curtailment of their spending severely.  Many people who were not going to lose their homes now are, and the commercial real estate sector is now showing strong signs of decline, with deterioration not far behind.

“What this implies to me is that we can only see about three months out right now.  The stimulus packages (trillions of our tax dollars) are not being spent, certainly not coherently, and are going virtually nowhere…at least so far.  Less than $200 million of the original $800 billion has actually been spent.  It’s just not happening…yet…and probably not real soon.  Plus, it’s not aimed at most industries, just some.

“The economy continues downward, and some are saying bankruptcies will be even greater in 2010, while they’re already up in 2009 by 240% over 2006.  Again, we can only see with some certainty about 3 months into the future right now.

“So, my thought would be to set your goals and do your plans only 3 months out, and re-assess each month.  As we’re able to see somewhat clearly further out, then open up your range to 6 months and start implementing your growth and recovery plans.  There are some recovery things you can start to do now, but do continue to deal with the downturn while planning for growth.  The really savvy economists are saying we’ll bottom by the end of this year, but have a slow, very drawn-out sectoral recovery (meaning each industry will start recovery at different times and at different rates of speed).  So, watch carefully, frequently, and adjust accordingly.

“Really hope I’m wrong about the economic observations made above and that it’s much better than it looks.  As always, hope this makes sense for you and your business.” [END QUOTE]

That makes perfect sense to me, plan for the next 3 months at max.  Set monthly goals, weekly to do lists and work on a daily basis to make the plan a reality.

Good luck, to all of us!

Leading through uncertainty: HBR July/August 2009

Reading this article in the most recent Harvard Business Review brought to mind dog agility tests. The dog, usually an Australian Shepard, runs manically, through the uprights, over the tipping bridge, under a log and through a canvas tunnel to reach the end line for a tiny reward:  small kibbles.

We, owners of remodeling companies, employees of remodeling companies and the myriad consultants, groupies and hangers on, of whom I count myself one, might be feeling like that dog right now.  Running, jumping, leaping and navigating tight quarters, often in the dark, to receive a tiny reward, at least tiny compared to two years ago.

Some perspective on the matter, however, might cheer us all:  if you’re still in business, if you’ve got sufficient cash flow, if you count hard working and engaged employees in your group, and among your clients satisfied long-term relationships, if your health is good and your family safe — you’re a lucky person!  And, just like that dog, ready to run the current obstacle course.

So let’s take this one step at a time.  One of the GREAT articles in the current Harvard Business Review is Leadership in a (Permanent) Crisis (page 62). The first paragraph reads:

“It would be profoundly reassuring to view the current economic crisis as simply another rough spell that we need to get through.  Unfortunately, though, today’s mix of urgency, high stakes, and uncertainty will continue as the norm even after the recession ends.”

Further on, it states:

“Crisis leadership has two distinct phases.  First is that emergency phase, when your task is to stabilize the situation and buy time.  Second is the adaptive phase, when you tackle the underlying causes of the crisis and build the capacity to thrive ina new reality.”

I hope by now most of us have stabilized:  gone through the heart-wrenching difficult tasks of letting people go, of changing the rent structure – perhaps even moving the office back into the home – and built a “starvation” company budget for the remainder of 2009.

Now comes phase two, “the adaptive phase”.  In this phase we’ll have to determine our new reality by re-thinking what we sell, to whom and how we sell it and how to best produce great outcome both in terms of customer satisfaction and quality construction.  Efficiencies, both in the production process itself as well as in economics of scale, should be put under the microscope for improvement.

Tackle, as always, the issues with the biggest payback first, leaving less vital considerations to fall off the ‘todo’ list over time.

Start now, prepare for the future by engaging your brain as well as your employee’s brains, ask your customers what they need most immediately and what they hope for down the road.

“Jack be nimble” should be our new mantra.  Starting today!

[Download reprint RO907F from HBR.org]

10 Trends: Harvard Business Review July/August 2009

“…there will be no going back to the precrisis world.”

HBR [page 57] cites 10 trends you have to watch in the July/August 2009 issue.  Only some of these trends relate to remodeling.  I’ve noted the most vital below.  Download the article, Reprint RO907E, at hbr.org.]

“Trust in business running out:  The relationship between business and civil society was showing signs of strain even before the crisis.

“… a low-trust environment makes everything about doing business more difficult.

“The strategic imperative for most companies is to do what they can to regain the trust of stakeholders and to more effectively manage relationships with them.  This starts at the top.

“Regaining trust also means dispensing with the view that the only objective of management is to increase shareholder value.  Broadening the list of key stakeholders to include employees, customers,suppliers, communities, the press, unions, government, and civil society will help companies rebuilt credibility.”

“Shifting consumption patterns: Crisis or not, it was inevitable that the US consumer-spending growth would slow.

“Focus on older consumers:  Within five years, more than half of all consumer spending in the US will be by consumers over 50.”

“Find ways to offer luxuries on a budget.  Tighter household budgets don’t mean lower aspirations.  Our research shows thatt stretched consumers in slow-growing economies will still want to feel that they are living the good life.”

What do these trends mean for remodelers?  For one thing, we’ve all got to get back to executing on a higher level.  Take complete responsibility for the client experience, add personal touch and value to every contact: with clients, employees, vendors, consultants and suppliers.  Reach out into the community as well and be sure that you and your company name is known for commit ed involvement year round, not just when things are slow.

Develop depth in your offerings to older homes and to older homeowners, become CAPS certified, investigate home performance contracting – starting with upgrades to insulation and house envelopes.

Seek out and provide ways to add fun, sparkle, excitement and a sense of ‘luxury’ on even the smallest budgets.

Read everything you can, talk you everyone you meet with the point of view of an investigative report, question past clients, and slowly you’ll develop a plan for dealing with the future.

Trends look forward to the longer term – these are ideas to implement, starting today, which will help your company move forward in the future.