The 20 – Teens What B u siness Leaders Should Do TODAY to Prepare for the Next Decade Dr. Bill Conerly for Book Manufacturers Institute November 8, 2010.
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The 20 – TeensWhat Business Leaders Should Do
TODAYto Prepare for the Next Decade
Dr. Bill Conerly
for
Book Manufacturers Institute
November 8, 2010
-350
-300
-250
-200
-150
-100
-50
0
50
100
150
1989 1991 1993 1995 1997 1999
$ b
illi
on
sFederal Surplus/Deficit
0
1000
2000
3000
4000
1996 1997 1998 1999
Ind
exNasdaq
Y 2 K
Issues for the 20-Teens
• Economic environment
• Business Credit
• Baby Boom Retires
• Information Technology
• Sharing Information
Emerging
Advanced
-4
-2
0
2
4
6
8
10
2000 2002 2004 2006 2008 2010
ann
ual
per
cen
t ch
ang
eWorld Economic Growth
source: IMF
-10
-5
0
5
10
15
1950 1960 1970 1980 1990 2000
% c
han
ge
Gross Domestic Productadjusted for inflation
0
1
2
3
4
5
6
7
1950 1960 1970 1980 1990 200020-q
uar
ter
roll
ing
sta
nd
ard
dev
iati
on
GDP FluctuationsStandard deviation of % change
What Would You Do Differently In a More Cyclical Economy?
• Monitoring sales, industry trends, economy?
• Plan for smaller runs & shipments?
• Leaner inventories?
• Equipment suitable for large runs and small?
• Less leverage?
• Strategic move to more stable sectors?
Economic Environmentin the 20 – Teens
• Average growth rates a little slower
• Faster growth in emerging countries
• More cycles than last 25 years
Issues for the 20-Teens
• Economic environment
• Business Credit
• Baby Boom Retires
• Information Technology
• Sharing Information
Banking Challenges in the 2010s
• Too much real estate concentration
• Regulators worried about risk
• Regulators worried about capital
• Investors think the industry stinks
• Less flexibility to innovate
0%
10%
20%
30%
40%
50%
60%
70%
1935 1945 1955 1965 1975 1985 1995 2005
% g
ross
lo
ans
& l
ease
sReal Estate Loan Concentration
by banks
0
50
100
150
200
250
300
350
1950 1960 1970 1980 1990 2000 2010
ban
ks
Bank Failures
thru10/22
Total Risk-Based
11%
12%
13%
14%
15%
2003 2004 2005 2006 2007 2008 2009 2010
per
cen
tBank Capital Ratios
S&P 500
Financial Services
0
5
10
15
20
25
30
35
40
0
200
400
600
800
1000
1200
1400
1600
1800
2005 2006 2007 2008 2009 2010
ind
ex
ind
exStock Prices: Financials vs Overall
Business Financein the 20 – Teens
•Credit cheap when available
•Credit available w/ top quality financials
•Credit scarce with poor financials
•Asset-based lenders also tight
Issues for the 20-Teens
• Economic environment
• Business Credit
• Baby Boom Retires
• Information Technology
• Sharing Information
What Happens When the Boomers Retire?
• Investment Issues
• Labor force issues
0
5
10
15
20
1980-90 1990-2000 2000-2010 2010-2020
mil
lio
ns
Working Age Population Growth
Entitlement Deficits
-5
-4
-3
-2
-1
0
1
2008 2020 2032 2044 2056 2068 2080
% o
f G
DP
Medicare
Social Security
-30%
-25%
-20%
-15%
-10%
-5%
0%
5%
1940 1950 1960 1970 1980 1990 2000 2010
per
cen
tBudget Surplus/Deficit
Emerging
Advanced
15
20
25
30
35
1980 1985 1990 1995 2000 2005
per
cen
t o
f G
DP
Savings Rates
Impacts of Higher Tax Rates
• Personal: Look at nest-egg net of taxes
• Business: Employee retention challenge for those who don’t HAVE to work
(seniors, spouses, teens)
Strategies for Tight Labor Market
• Good recruitmentQuality hires
Look for untapped pools of talent
• RetentionPoor managers lose employees
How to retain seniors?
Issues for the 20-Teens
• Economic environment
• Business Credit
• Baby Boom Retires
• Information Technology
• Sharing Information
Labor
Info Tech
50
60
70
80
90
100
110
2006 2007 2008 2009
ind
ex
Cost Trends
Who’s Your Good Customer?
Lila Bill
Low volume
Price sensitive
Costly to serve
High volume
Not price sensitive
Electronic transactions
feedback
Technology in the 20 - Teens
• Know your costs and revenueBy customer
By product
• Feedback:Prompt
Accurate
Specific
Issues for the 20-Teens
• Economic environment
• Business Credit
• Baby Boom Retires
• Information Technology
• Sharing Information
External wikis for customers
Internal wikis for employees, vendors, franchises
Social Networking for Business
Examples: TwitterLinkedIn
Who Do You Need to Connect?Employees, Franchisees,Vendors, Customers
Tools: Social Networking SitesFree Conference CallsList-serves
What to Do Today
To Prepare for the Next Decade
• Re-Optimize for more cyclical economy
• Evaluate your financials: good or poor?
• Explore many credit options
• Experiment with keeping seniors on the job
• Know your numbers: costs and revenues
• Set up feedback systems everywhere
• Identify knowledge to be shared
• Set up networks for people to share expertise
Questions?
Bill @ ConerlyConsulting.com
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