Many predicted the so-called new economy bubble would burst and so it did. One of the fundamental problems that caused the frenzy was the idea that somehow the old rules would no longer apply, including the fundamentals of success. Promises became more important than profitability and sound metrics seemed to be immaterial.
The sudden new economy collapse coupled with social / geo-political upheaval and 9/11, created a perfect storm of change that accelerated a long term economic decline, broadscale retrenchment and fundamental reassessment of just about everything.
In the business world, companies headed for the bunkers and focused on cost cutting, in the absence of revenue growth, to stem the steep decline in profitability. Quarterly EPS ruled and we all paid the price.
Marketers began to suffer under ever-increasing pressure to justify the value delivered by their activities. This proved to be difficult. In most cases their marketing playbooks and measurement tools weren’t able to cope. As a result, innovation suffered, value eroded, budgets declined and loads of people lost jobs.
Despite the fundamental changes rapidly taking place in almost every other sector of the business world, most marketing practices remain rooted in outmoded beliefs, organization, practices and techniques.
Now What Happens?
From boom to bust to war to whatever comes next. With the death of the new economy, what is the next economy? How can we capitalize on the after shocks of the new economy? What has changed and what hasn’t? How do you outthink and outsmart the competition in a dramatically changed marketplace? How do you create demand and increase customer loyalty in an oversupplied market? How do you learn to work faster? How do you acquire new skills and tackle new tasks? How do you achieve more with less? How do you organize? Who will lead? All are common questions in today’s boardrooms.
Now is the time to come to grips with the answers. The next economy is happening right now. You won’t find answers by simply opening the old rulebooks - the new economy may be dead but life has nevertheless changed fundamentally. What was normal yesteryear won’t be as the future unfolds. We are entering a “new normal” with new rules that will drive the next economy and beyond.
The next economy will carry on from the new. It will comprise the best of what we’ve learned, the best of what we do today and a number of things that are truly new. In the next economy manufacturers will still make / sell things and service providers will still offer service. But they will do so with new business models, organizations, tools, processes, technologies and go-to-market strategies.
With reality now setting in, it’s increasingly clear to marketers that a return to the “good old days” won’t happen again. But one good old business principle will come back to center stage: performance, not promises, is what will really matter. What has changed is how performance will be achieved going forward.
Six Fearless Predictions
The convergence of technological, economic and social forces that created the new economy won’t go away - they will continue to have effects on both companies and the customers they wish to serve. They will continue to alter the course of future events and will continue to change the culture of the business world in important ways. Key issue: how to adapt to / leverage the new realities.
The skills that have become so essential in the technology world - flexibility, speed, aptitude for technology, hunger for information, a willingness to challenge convention, a global outlook, networks and networking – will all be necessary drivers of successful performance for a long time to come.
Companies are looking for help to determine how to use the surviving benefits of the "last economy" and apply new thinking to succeed in the next economy. In many cases, companies will have to look outside their own patch for answers because they will continue to be saddled by limited financial resources and human capital, even as the economy stabilizes.
The waves of change won’t flatten - they’ll continue relentlessly. The retooling of organizations will pick up pace. New approaches will apply. Business strategies and marketing plans will be rooted in the fundamental truth that top-line organic growth is mandatory, but not without growth in its bottomline value. Value creation will be king.
The marketplace, proliferated by multiple brands and multiplying channels, will become increasingly complex, over-supplied, noisy and volatile. Consumers, armed with easy access to vast information sources, will become ever more powerful, sophisticated, knowledgeable, demanding customers.
Marketing will continue to be important but will progressively transform. Rather than being a divisional silo of questionable value, marketing will morph into a company-wide, channel-neutral activity and be held increasingly accountable for measurable results and return on investment. This will affect its dynamics, skill sets, tools, processes, organization and relationships.
It will also create new opportunities for leading… and losing.
Those who can help companies successfully perform in this ever-changing environment will be highly valued. That’s the sweet spot for succeeding in the next economy. Those who deliver first will reap the big rewards.
Welcome to the New Normal and good luck to us all.
“New Normal, New Rules - Creating Value in the Next Economy” - by G. Kelly O’Dea