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.

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

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2

4

6

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2000 2002 2004 2006 2008 2010

ann

ual

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source: IMF

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1950 1960 1970 1980 1990 2000

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Gross Domestic Productadjusted for inflation

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1950 1960 1970 1980 1990 200020-q

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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%

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1935 1945 1955 1965 1975 1985 1995 2005

% g

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by banks

0

50

100

150

200

250

300

350

1950 1960 1970 1980 1990 2000 2010

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ks

Bank Failures

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Total Risk-Based

11%

12%

13%

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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

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Working Age Population Growth

Entitlement Deficits

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2008 2020 2032 2044 2056 2068 2080

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per

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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