Forget the markets and employment numbers. 10-year forecast might be easier to make than a one-week call
“I could probably make a 10-year forecast easier than a one-week forecast,” quipped Rod Smythe, Chief Investment Strategist of Riverfront Investment Group at a high-end wealth management conference we attended on Tuesday.
Whether it’s the financial markets, the job market, pro sports or even the weather, we’re in an incredibly volatile time and this era of uncertainty is wreaking havoc on our collective psychology. Smart B2B marketers will stay focused on their long-term goals without panicking or chasing the next fad. Just be ready for a lot more VUCU. We’ll get to what vucu means in a minute. In the long run, we’ll get through this and in many respects we’re already there. Say what?
Just two weeks ago, I was swimming in Long Island Sound on an unseasonably warm October day. Stocks were plummeting as the U.S. seemed destined for a double-dip recession and Greece and other Euro Zone players were headed for a sure default on their debt.
How quickly things change. Monday I was trick-or-treating in the snow with my kids here in the Northeast. Stocks are back to break-even for the year and have risen significantly as economic data suggests we’ve fended off the threat of a Euro Zone meltdown, a double-dip recession, and stronger than expected corporate earnings. China’s hyper-growth economy (and inflation risk) slowing and last week’s GDP results showing 2.5 percent annualized growth in Q3, our strongest effort in a year.
So, while personal income is falling, consumer spending has risen at a 2.4 percent annual rate–three times faster than Q3 according to the latest government stats. Despite a persistently high percent unemployment rate, confidence may be returning. Credit card debt is inching higher, sales of cars and major appliances are rebounding and consumers are hording a lot less in their savings accounts (again).
Living in a vucu world
We’re living in a “vucu” world, said Dana Anderson, a Kraft Foods marketing VP who was widely quoted at last week’s Association of National Advertisers conference in Phoenix which attracted a record 1,700 attendees.
Not familiar with Vucu? It stands for volatile, uncertain, complex and ambiguous which is going to require a new set of skills she said. Marketers and advertisers will need learn from experimentation, and be open to intuitive, rather than rational solutions to problems.
OUR TAKE: Amen to that, but much easier said than done. True, tough times call for bold steps and recessions have historically fostered some of the greatest innovations. But, when millions of salaried media workers are scared to death of losing their jobs, the risk of a failure pinned to one’s performance review is a stronger deterrent than usual.
Business spending hot, hiring is not
According to the Commerce Department, business increased their capital investments at a 17.4 percent annual rate. Economists say business spending has been strong throughout the recession, an optimistic sign because investment in factories, offices, equipment and software is often a run up to hiring.
And from a micro-perspective, the office building in which we work was less than half full when we moved in two years ago. It’s 100 percent occupied now. That’s right. No vacancy!
Is technology replacing humans in the workforce?
According to the authors of “Race Against the Machine” a just-released book by Erik Brynjolfsson and Andrew McAfee is a scary deep-dive into the job fallout from advances in technology. The authors, who are directors at the MIT Center for Digital Business, warn that automation has picked up in recent years because of a combination of technologies including robotics, numerically controlled machines, computerized inventory control, voice recognition and online commerce.
Since the “official” end of the recession in mid 2009, payrolls have been flat, but corporate spending on equipment and software has increased 26 percent, they note. According to Factset Research, the productivity gains from technology seem to be falling to the bottom line. The S&P 500 companies are expected to report record profits—nearly $1 trillion--and the corporate profit share of the U.S. economy is at a record high when millions are out of work or facing foreclosure of their homes.
It’s true that hundreds of thousands of sales and marketing jobs have been lost or impacted by technology, but Brynjolfsson and McAfee argue companies still need humans for many higher level tasks requiring intuition, creativity and solutions. Leave narrow, literal minded assigned tasks to the computers they advise and smart humans—including B2B marketers—will learn how to create a “partnership” with technology.
SOCIAL, and we don’t mean Facebook
Marc Benioff, founder of the popular cloud-based sales CRM solution, Salesforce.com, frequently says we’re in the midst of an IT revolution based on the acronym SOCIAL—S is for speed; O is for open; C is for collaboration; I is for individuals who can now instantly reach around the world to network and collaborate; A is for alignment (all your ships moving in the same direction) and L is leadership, both top down and bottom up.
In a New York Times Op-Ed piece, Thomas Friedman, quotes LinkedIn CEO, Jeff Weiner on the power of the IT revolution: “It makes it easier and cheaper for anyone anywhere to be an entrepreneur and have access to all the infrastructure of innovation.”
OUR TAKE: Whether you’re a sole practitioner, a 10-person regional outfit or a Fortune 500 powerhouse, you need to have everyone—and every machine—at your organization aligned and in a nimble entrepreneurial mindset. Make some mistakes. Make ‘em hard and fast and see how quickly you can learn from those mistakes.
That’s how we’ll get out of this economic first gear and great B2B marketing is what’ll get us into the overdrive phase.