Viewpoint

Times are Tough, and the Tough Keep Going

These are tough times for many businesses and for many families. More and more often economic pundits are talking about “stagflation” – that scourge of the late 70s that most of us had relegated to the ashbin of history (to steal a phrase). With real inflation approaching levels not seen in decades at the same time that economic growth is slow or possibly even in recession, the parallels to the Carter years seem clear. But the numbers are far from those the nation faced in that difficult period. Inflation is high but still less than the double-digit rates we experienced then. Credit is tight and interest rates high but we are a long way from mortgage rates in the teens like we had then.

It is not 1979. But times are still tough and opportunities that seemed endless just a couple of years ago are fewer and farther between than many of us have seen in years – if ever. Of course, there are plenty of exceptions. Consol Energy, Inc., for example, was trading at more than 300 percent of its 52-week low. Caterpillar is enjoying rapid growth in global sales of its mining and energy equipment thanks to the weak dollar and relatively strong economic growth in Asia, the Middle East and Eastern Europe. Local companies Air Products and PPL are working on energy opportunities basing their strategies on the need to solve real problems in this global sector. But those are the exceptions.

Today businesses need to seek out opportunities for the future while protecting themselves from current threats. Companies that aggressively pursue new markets and new products without paying sufficient attention to the current trends could be setting themselves up to implode for lack of capital, rising costs and uncertain market demand. Companies that drop employment rolls, pull back on research and development, reduce marketing investment, and abandon investment in sustainable technology run the risk of surviving the short run only to face the long run from a severely weakened position. It is a difficult balance but one that successful organizations – that is, to use the term we have been emphasizing for several issues of this newsletter – sustainable organizations find and maintain. 

In fact, these are exactly the times that sustainable organizations prepare for. The current economic challenges are temporary. The economy is remarkably resilient and, just as we got through the era of stagflation (albeit via a crushing recession), we will get through the current downturn. The sustainable organization is better positioned to weather the short term than are other organizations and they will be better positioned to prosper when the turnaround comes. By maintaining a longer-term focus on the critical factors for success – from technology to succession plans, from research and development to marketing and promotion, from workforce development to energy management – the sustainable organization will survive and thrive.

We are committed to helping organizations succeed today and in the long run. I encourage you to contact me or any of the other CBI contacts in this newsletter to learn more about how we may be able to help your organization become more sustainable.

(Back to top)
Home page