- Uncertainty is here to stay
- Everyone still has to make decisions
- Four strategies for growth
Whether it comes in the form of the federal sequestration budget cuts or a new startup disrupting an entire industry, Geoff Colvin, author and senior editor of Fortune, says companies and individuals are increasingly have to do work around higher levels of uncertainty.
“How many people in this room bought Kodak film? Right, everyone over the age of 30,” said Colvin at the ULI Spring Meeting in San Diego. “But who here has tried Instagram? Kodak is bankrupt, and Instagram, with about 12 employees, was sold for $1 billion last year.”
Colvin also pointed to the cell phone space as an area where no company has been able to stay on top for very long, with Motorola, Nokia, Blackberry, and now Samsung and Apple as the top brands.
Colvin, author of bestselling book Talent Is Overrated, says four core strategies are what help businesses survive difficult times.
- Innovate The Business Model: According to Colvin, The Thomson Corporation, which eventually became part of Thomson Reuters, sold all of its newspapers in 2000. That turned out to be the peak year for advertising. “Sometimes doing the right thing is going to look crazy at the time,” said Colvin.
- Manage for Value: According to Colvin, Dupont invested in research and development, even during the Depression. When better times returned, they had new products like neoprene ready to go.
- Never Stop Building Human Capital: In tough times, Colvin says companies always cut things like training and development. But companies from General Electric to Google, tell him hiring and evaluating talent are the most important thing they do. Where will the innovation come from if not from a highly trained workforce?
- Become Radically Customer Centric: Colvin said he talked to one CEO at a company that was unprofitable that said he “didn’t have any unprofitable customers.” “Customer profitability has an extreme distribution,” says Colvin. “If a company doesn’t know that, they will misallocate expenditures.”
The best part of these strategies, said Colvin, is they position companies even better for when better times do come.