'This is not your grandfather’s recession.'
That’s what I was told this week by Paul Laudicina, author of World Out of Balanceand one of the top business consultants with A.T. Kearney.
I talked with Paul for my “Face Time” columnappearing in the current issue of Business Week.
He believes this recession is more than a period when many of the world’s economies shrank.
I happen to agree.
We will look back not too long from now and see that there have been fundamental changes as a result of the recent crisis.
Others feel the same way, including GE CEO Jeff Immelt, who is credited with originating the term “reset” economy in a letter to shareholders in February.
Paul says the economy is being reset by technology and a transformation of the market. The trap that many businesses – and investors – will fall into is thinking about things the way they used to be instead of the way they are, or soon will be.
To succeed, you have to liberate yourself from the way things were being done before.
Here are some of the most significant “resets” Paul believes are playing out:
- We are clearly moving to an environment that is less about goods and manufacturing and more about services and experiences, such as healthcare, technology services, education, entertainment and the like.
- Industrialized countries that we thought were atrophying are changing demographically, including the U.S., U.K. and Scandinavia.
- Changing consumer patterns and rising demand for natural resources require a re-examination of how they are produced.
- Global supply chains will require a new way of thinking.
- Increased government intervention changes business, and many governments around the world have provided fiscal stimuli to their economies. The changing balance between public and private sectors is also part of the transformation taking place.
This list will obviously be much more comprehensive in the coming months and years as the true effects of the recession and financial crisis become more apparent. One thing we do know: The companies that are out in front adapting to and forging new ways of doing business will be best positioned to thrive and build their shareholders’ wealth.
In fact, I’ll be talking with several expert stock pickers in the coming weeks, and we’ll find out which companies they like best right now. I’ll keep you posted, so be sure to check the blog regularly.
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