Smart Economy

The Opportunity Clinic- 28 Tactics for Managing your Business in a Recession Part 11 of 28 Pretending and Deception as an Opportunity Space

Harmless white lies and more damaging forms of deception are increasingly more frequent events in society and in the business world, if you follow the business press. Consider the following joke:

 

 

An elderly gentleman had serious hearing problems for a number of years. He went to the doctor and the doctor was able to have him fitted for a set of hearing aids that allowed the gentleman to hear 100%  The elderly gentleman went back in a month to the doctor and the doctor said, "Your hearing is perfect. Your family must be really pleased that you can hear again."

The gentleman replied, "Oh, I haven't told my family yet.  I just sit around and listen to the conversations. I've changed my will three times!"

 

 

This form of deception or white lies is often more frequent in society then most people suspect. Does this dress makes me look fat..asks a wife or girlfriend? Well you know the answer to that one.

 

Start-up entrepreneurs are often forced to pretend (to be something they are not yet or to know someone that they don’t to gain customer acceptance and to develop a needed perceived reputation) . Deception is not a single point but a continuum along a spectrum. It can range from supposedly “harmless” white lies and deception on one end, where no one is hurt  (see Canadian billionaire example below) to deliberate deception and scams where there are real victims (Think Ponzi schemes and Bernie Madoff, who made off with billions of clients’ dollars) . It also surfaces a range of ethical questions, such as.... Under different circumstances and cultures, will these tactics be more or less acceptable?

 

 

Several professors are studying the question of entrepreneurial deception or pretending. The research was initiated by Miroslav Pivoda in the Czech Republic, and joined by Frank Hoy and Santiago Ibarreche in the U.S.A., and latter by Dan Mosher in Canada. They published partial results of their research at the 2007 ICSB conference in Turku (Finland) and 2008 ICSB conference in Halifax( Canada). (see “creative” lateral examples of deception from the surveys below)

From a paper called Tricks of Creative Entrepreneurial Problem Solving (2007) Pivoda and his colleagues remind us:

“New ventures are difficult to start because customers and business partners prefer not work with companies in the initial, risky, developmental phase. Entrepreneurs use creative techniques to overcome this such as: “Optical enlargement of a business”, “Fictitious location of a company” or “Spying on competitors”. These techniques are forms of deception and may be ethically questionable. However they represent effective tools for starting entrepreneurs.” claims Pivoda […these tools are often recommended by consultants and small business advisors, when  talking about “bootstrapping” or guerilla marketing —Walter Derzko”. ]

Pivoda adds:

“To understand this issue, we initiated an empirical study. Our long-term intention is to create a “playbook” for the major types of tasks of a starting entrepreneur. Here, we focused on the ethical dimension in our survey.”

 

They are asking for your help in exploring this field and identifying cases. See 2009 Questionnaire at Survey Monkey: http://www.surveymonkey.com/s.aspx?sm=spYpmR9vwj1PO7_2f6m61ZfA_3d_3d

 

 

 

Entrepreneurs in Pivoda’s business class are asked to evaluate these tactics. Is it ethical? Moral? Well, the answer depends which culture you live in. I love one of their examples:

 

“In 1994, in a post-communist economy of the CzechRepublic, entrepreneurs Peter and Mark rented a large parking space for their future 120-car auto-bazaar. Unfortunately at that time, they only had 4 cars. They visited a few local banks but without collateral, they were dismissed. As they were unable to obtain any additional financial support to buy more cars, they had to find a new "creatice" way to fill in the empty parking spaces, which is a precondition to make an auto-bazaar more attractive both to prospective buyers as well as to sellers.

Next to the Auto-bazaar, there was a big company. Peter and Mark offered employees free parking in the Auto-bazaar under the condition that while parked, fictitious price tags would be placed on their cars. Fortunately this offer was accepted. From early mornings, Turbo Auto-bazaar was full and by the afternoons most of the cars were gone. Passers-by probably got the impression that these cars were sold there like on a production line. Within half year, Peter and Mark had 20 cars in their auto-bazaar and success followed.”

[Shady entrepreneurs and scammer practicing criminal schemes deserve to charged and jailed but they should also be studied and admired for their creative lateral thinking skills, pattern recognition ability and opportunity recognition savvy. If only they would apply their skills and aptitudes in a positive fashion in society..-Walter Derzko]

 

Other examples from Pivoda's recent survey/questionnaire:

 

Optical enlargement of an existing or even non-existing business

• Answer from the U.S.A.: “I know of a billionaire who started out selling life insurance and offering financial advice in Toronto, Canada. When he started he borrowed money from his family and spent on $1000.00 suits, leased a Rolls Royce just so people would think that he is very successful. His trick worked, because today he is a billionaire on the list of Forbes Magazine, richest people in the world. When I spoke to him recently, I told him that it is possible that the suits and car was not the trick but his loyalty to his customers; he however swear by the original way he presented himself.”

• “Our business innovation center (BIC) is located inside of a big building. In our promotional materials, we present a photo of the whole building, although our office occupies 4 rooms only there. Then, namely foreign clients may get an impression that the whole building belongs to BIC. We used this trick in latter stages of our business.”

• “We operate our business in a group of companies. Our company can be perceived as the whole group, as the whole network.”

• By aligning your self with another company you can share their brand name. Example: Ask whether you can post a link on a larger company’s web site or become a member of the better business bureau.

• In the total number of our employees, we include also employees of our partner firms as well as our external collaborators.

• “A Czech entrepreneur who owned a few diverse restaurants decided to hit the Czech market also with his own network of coffee bars. He named the prospective network according to a luxurious car model, and decided to place it into an attractive part of Prague. When dealing with a local developer (who was responsible for renting the building space in the attractive place), the entrepreneur successfully pretended that the network had already existed and had been operating under the “world-wide roof” of the well-known car trade mark.

Fictitious location of a company

• "My brother and I at home, we started to manufacture a tapping equipment for the computer keyboard. At that time, it was a unique product in the Czech market. We established a fictitious company located in the U.S.A.and started to sell the equipment on the Internet auctions. Our Internet presentation of the product was more than persuasive. In spite of some inconsistencies concerning identification of our company, we managed to sell a large quantity of our product to unaware customers."
• After signing an exclusive contract with another company, we managed that our product has been offered in various internet shops. Increased sales of the product helped our company to innovate it further and to start new business projects.
• I have nothing against these innocent tricks if they do not break law and, first of all, do not make any harm to customers. Entrepreneurial tricks are fully justified by current difficulty to grasp even a small fraction of the market.

Copying know-how from competitors

• When starting a new restaurant, and also in later stages of our business, we often copied menu of our competitors. To prevent competitors to do the same to us, we forbid taking our menus out of restaurant.

• An entrepreneur who wanted to start his own book store investigated the market preferences in a competitor’s shop. In the morning, the entrepreneur walked into the competitor’s shop, and pretended to be a curious customer. He calculated numbers of selected titles on shelves and left the shop. In the evening he walked in the shop again, and did the same calculations. From differences in numbers, the entrepreneur was able to identify the best selling books in the competitor’s shop, and order them without risk for his own starting shop in the opposite part of the town.

Spying on competitors

•  Answer from the U.S.A.: When we were interested in buying a piece of property or building, I have done the same tricks (as you describe in your questionnaire), calling for info and giving a different name. One time it back fired when I gave him a different name as he knew the person.
• In another case, we wanted to raise prices of our services. We called others in the same service business. We found that they would do the same to us when we were not there. We were in the dry cleaning business and Real Estate in a small family business with about 75 employees.

Giving incomplete information

• Answer from the U.S.A.: One respondent said that he used either just his name or the title of vice-president.  The reason given was that in that way he could get out of making decisions under pressure by saying that he had to consult with “his people” before making a decision because he was the vice-president NOT the President of the company

Makes me wonder....Will Obama's "Yes we can !" campaigne lead to not just to more and bigger ligitimate dreamers but also  more schemers, scammers and ponzi artists?

 

Walter Derzko

Smart Economy

Toronto

Author of the soon-to-be-released book: Hard Times Golden Opportunities.. about opportunity recognition in a recession/ depression features 45 opportunity scenarios.

 

Related posts in this series:

The Opportunity Clinic - 28 Tactics for Managing Your Business in a Recession Part 8 of 28 Industry Architecture Opportunities

The Opportunity Clinic - 28 Tactics for managing your business in a recession Part 7 of 28  Geopolitical Opportunities;

The Opportunity Clinic; 28 Tactics for managing your Business in a recession Part 6 of 28 What's in your Recession Playbook?

The Opportunity Clinic; 28 Tactics for Managing your Business in a Recession Part 5 of 28 Category Killer Innovation-India's $10 laptop

The Opportunity Clinic - 28 Tactics for Managing Your Business in a Recession Part 4 of 28 “Left Behind “Opportunities- Go Green & Go Slow

The Opportunity Clinic - 28 Tactics for Managing Your Business in a Recession Part 3 of 28 Design Opportunities- Hope or Nostalgia

The Opportunity Clinic - 28 Tactics for Managing Your Business in a Recession Part 2 of 28 Innovation or Efficiency?

The Opportunity Clinic - 28 Tactics for Managing Your Business (& surviving and thriving) in a Recession Part 1of 28

Related Posts over that past year:

·         Opportunity Recognition in Difficult Times

·         Recession - Proofing your Business - Spotting & Designing Opportunities in a Downturn

·         Recession - Proofing your Business - Spotting & Designing Opportunities in a Downturn – June 25, 2008, Ontario College of Art Design, Toronto, ON

·         Recession-Proofing your Business-Strategies and Tactics for smoother sailing in turbulent seas

·         Master Class in Opportunity Recognition for entrepreneurs and intrapreneurs> May 30th 2008> University of Toronto

·         Turning Misery into Opportunity

·         Vacuum leaves pullout opportunities;

·         How will baby boomers handle the recession? Zoomers, Doomers, Gloomers, Opportuneurs

·         Recession, Depression and Shortages as Opportunities

·         Restructuring of American Business-A New Business Model?

·         Using New Yorker Cartoons for Opportunity Recognition /Sense-making & Pattern Recognition

·         Text Mining for S&T Scouting, Foresight and Opportunity Recognition

·         The Opportunity Clinic-swapping opportunity scenarios 08-002

© 2005-2009

Walter Derzko -"Changing the world, one idea at a time"©

Expert, Consultant and Keynote Speaker on Emerging Smart Technologies, Innovation, Strategic Foresight, Business Development, Lateral Creative Thinking and author of an upcoming book on the Smart Economy "

The Smart Technology Blog: The Smart Economy -- Read, enjoy, explore, speculate, comment !!

To arrange for an in house presentation or briefing on smart technology see here

To explore the opportunities and threats of any new smart technology in your industry - Contact Me or explore how we can work together

• ".....Strategy without action is a day-dream; action without strategy is a nightmare"-old Japanese proverb
• ".......Ours is the age that is proud of machines that think and suspicious of men who try to." -- H. Mumford Jones
• ".......Without changing our patterns of thought, we will not be able to solve the problems we created with our current pattern of thought."  --A. Einstein
• ".......Change is difficult, but complacency and stagnation are surefire showstoppers..." --Walter Derzko

• ".......Never doubt that a small group of thoughtful, committed citizens can change the world; indeed, it's the only thing that ever has."  -- Margaret Mead

• ".......Small minds discuss people; Average minds discuss events; Great minds discuss ideas; --Anon

P. S. if this is your first visit to my blog, please go to our Welcome page

Why sustainable power is unsustainable?- advanced "renewable" technologies are too often based upon non-renewable resources

Recessions and depressions are great periods in history because paradoxes and contradictions seem to stand out even more. The big one facing society in the next two decades is the obvious economic one-everything in our conventional economic paradigm is based on annual, year-over-year growth, yet we appear to be entering a period of "peak resources" ranging from peak water, to peak oil, peak gas and most importantly for business, peak minerals-facts that the green eco-movement often ignores, or is hiding in the closet-the dirty green secret.

A story earlier this month in New Scientist, covered a Financial Times conference on energy and sustainability in London England and it concludes:

"Renewable energy needs to become a lot more renewable...[..]... Although scientists are agreed that we must cut carbon emissions from transport and electricity generation to prevent the globe's climate becoming hotter, and more unpredictable, the most advanced "renewable" technologies are too often based upon non-renewable resources, attendees heard. Supratik Guha of IBM told the conference that sales of silicon solar cells are booming, with 2008 being the first year that the silicon wafers for solar cells outstripped those used for microelectronic devices. But although silicon is the most abundant element in the Earth's crust after oxygen, it makes relatively inefficient cells that struggle to compete with electricity generated from fossil fuels. And the most advanced solar-cell technologies rely on much rarer materials than silicon [-that being indium.]"

[..]...Peak Indium? 10 year of global supply left?

"The efficiency of solar cells is measured as a percentage of light energy they convert to electricity. Silicon solar cells finally reached 25% in late December. But multi-junction solar cells can achieve efficiencies greater than 40%.

 

Although touted as the future of solar power, those and most other multiple-junction cells owe their performance to the rare metal indium, which is far from abundant. There are fewer than 10 indium-containing minerals, and none present in significant deposits – in total the metal accounts for a paltry 0.25 parts per million of the Earth's crust.

 

Most of the rare and expensive element is used to manufacture LCD screens, an industry that has driven indium prices to $1000 per kilogram in recent years. Estimates that did not factor in an explosion in indium-containing solar panels reckon we have only a 10 year supply of it left.

If power from the Sun is to become a major source of electricity, solar panels would have to cover huge areas, making an alternative to indium essential."

Could we see resource wars, {which the US military has extensive plans for}, material rationing or outright prohibition like we saw with alcohol in the 1930's? Will we have to select between indium for our cell phones, flat screen TV's or solar cells? Will nanotech breakthroughs come to the rescue? -will an exotic combination of fullerenes, graphenes and carbon nanotubes be the substitution answer? The nanotech race for an alternative is on.--Walter Derzko

 

They also cover peak Platinum

"The dream of the hydrogen economy faces similar challenges, said Paul Adcock of UK firm Intelligent Energy. A cheap way to generate hydrogen has so far proved elusive. New approaches, such as using bacterial enzymes to "split" water, have a long way to go before they are commercially viable. So far, fuel cells are still the most effective way to turn the gas into electricity. But these mostly rely on expensive platinum to catalyse the reaction.

The trouble is, platinum makes indium appear super-abundant. It is present in the Earth's crust at just 0.003 parts per billion and is priced in $ per gram, not per kilogram. Estimates say that, if the 500 million vehicles in use today were fitted with fuel cells, all the world's platinum would be exhausted within 15 years. Unfortunately platinum-free fuel cells are still a long way from the test track. A nickel-catalysed fuel cell developed at  Wuhan University, China, has a maximum output only around 10% of that a platinum catalyst can offer.

A new approach announced yesterday demonstrates that carbon nanotubes could be more effective, as well as cheaper, than platinum. But again it will be many years before platinum-free fuel cells become  a commercial prospect."

Also , could Lithium shortages in 10-15 years  impede future electric car deployment?

 

Let’s look at the  metal gallium, which along with indium is used to make the next generation of semiconductor materials-indium gallium arsenide for a new generation of solar cells that promise to be up to twice as efficient as conventional designs. Reserves of both metals are disputed, but in a 2007 report Renï  Kleijn, from LeidenUniversity in the Netherlands, concludes that current reserves "would not allow a substantial contribution of these cells" to the future supply of solar electricity. He estimates gallium and indium will probably contribute to less than 1 per cent of all future solar cells - a limitation imposed purely by a lack of raw material."

Other projections I've seen-antimony could run out in 10 years; Silver in 10 years, hafnium in 10-15 years and tribium by 2012 or 4-5 years. Looking for the next geopolitical flash point? The US imports 90% of its rare metals and materials from China.

(Proceedings of the National Academy of Sciences, vol 103, p 1209), "Virgin stocks of several metals appear inadequate to sustain the modern 'developed world' quality of life for all of Earth's people under contemporary technology."

 

I've always wondered what minerals are hidden in the mountains of Afghanistan.... "It is widely acknowledged that one of the key motives for civil war in the Democratic Republic of the Congo between 1998 and 2002 was the riches to be had from the country's mineral resources, including tantalum mines - the biggest in Africa. The war coincided with a surge in the price of the metal caused by the increasing popularity of mobile phones." (New Scientist, 7 April 2001, p 46).

 

 

Ever wonder why China is hoarding every gram of our high tech electronic garbage?  It's buying up high-tech scrap to extract metals that are key to its developing industries.

 

One good thing about this recession / depression shakeout-there will be far fewer firms fighting and scrambling over those increasingly precious resources-buying us a few extra years of transition time.

 

The lessons here?...Digging minerals out of the ground will no longer automatically confer economic advantage {Canada, Africa, Brazil and China Listen Up}, instead structuring "smart materials" in novel ways will.--Walter Derzko 

 

 

See full story here and image  

 

© 2005-2009

Walter Derzko -"Changing the world, one idea at a time"©

Expert, Consultant and Keynote Speaker on Emerging Smart Technologies, Innovation, Strategic Foresight, Business Development, Lateral Creative Thinking and author of an upcoming book on the Smart Economy "

The Smart Technology Blog: The Smart Economy -- Read, enjoy, explore, speculate, comment !!

To arrange for an in house presentation or briefing on smart technology see here

To explore the opportunities and threats of any new smart technology in your industry - Contact Me or explore how we can work together

• ".....Strategy without action is a day-dream; action without strategy is a nightmare"-old Japanese proverb
• ".......Ours is the age that is proud of machines that think and suspicious of men who try to." -- H. Mumford Jones
• ".......Without changing our patterns of thought, we will not be able to solve the problems we created with our current pattern of thought."  --A. Einstein
• ".......Change is difficult, but complacency and stagnation are surefire showstoppers..." --Walter Derzko

• ".......Never doubt that a small group of thoughtful, committed citizens can change the world; indeed, it's the only thing that ever has."  -- Margaret Mead

• ".......Small minds discuss people; Average minds discuss events; Great minds discuss ideas; --Anon

P. S. if this is your first visit to my blog, please go to our Welcome page

When will the recession/ depression end? Part 18 Hormones and Boom and Bust Cycles

It turns out that morning testosterone levels in male stock traders have a direct relation to risk aversion and profitability. Susan Pinker, the author of Sexual Paradox, describes the study done by John Coates, that shows a direct relationship between elevated testosterone levels in male traders in the morning and increased profits and risk aversion. That begs the obvious question. If you extend that testosterone effect across a firm, say Leahman Brothers, and  then across the industry, which is primarily male dominated, does it lead to increased industry-wide "irrational exuberance" over time and unwarranted risk-taking, which culminates in a boom and an eventual bust? Women traders are more risk averse and cautious.

The TV commentatoror asked Pinker, if it would have been better if Leahman Brothers were Leahman Sisters. No, said Pinker. Women in senior positions in regulatory agencies would have been a better safeguard, concludes Pinker.

Walter Derzko, Smart Economy, Toronto,

Author of the soon-to-be-released book: Hard Times Golden Opportunities.. about opportunity recognition in a recession/ depression features 45 opportunity scenarios.

 

Related Recession / Depression Posts

When will the recession / depression end ? Part 17 Recap from the World Economic Forum in Davos

When will the recession end? Part 16 It's all over, well sort of.

When will the recession end? Part 15 Year-end predictions for 2009 starting to come true

When will the recession end? Part 14 Four options for America's race to the bottom

When will the recession end? Part 13 Thirteen economic questions that economists can't answer

When will the recession end? Part 12 Bad times are good times for startups

When will the recession end? Part 11 Bank of Canada optimism

When will the recession end? Part 10, The Conformity Trap or Don't count on your economist for advise

When will the recession end? Part 9 Humor will signal recession /depression bottom

When will the recession end? Part 8 Lessons Learned from the last Post 9/11 recession; designing brilliant winning business models

When will the recession end? Part 7 False signals of recovery

When will this recession end? Part 6 The USA Paradox; Cheer vs Fear vs Transformation

When will the recession end? Part 5 Stop Auto Industry Bailouts, start buying Electric

When will the recession end? Part 4 The double dip housing crash in the USA

When will the recession end? Part 3 The coming collapse of the American Middle Class into an Underclass

When will this recession end ? Part 2 Do you listen to the Optimists or the Pessimists in 2009?

When will this recession end?

82 Signposts to the current Recession Depression Summary from 2008

© 2005-2009

Walter Derzko -"Changing the world, one idea at a time"©

Expert, Consultant and Keynote Speaker on Emerging Smart Technologies, Innovation, Strategic Foresight, Business Development, Lateral Creative Thinking and author of an upcoming book on the Smart Economy "

The Smart Technology Blog: The Smart Economy -- Read, enjoy, explore, speculate, comment !!

To arrange for an in house presentation or briefing on smart technology see here

To explore the opportunities and threats of any new smart technology in your industry - Contact Me or explore how we can work together

• ".....Strategy without action is a day-dream; action without strategy is a nightmare"-old Japanese proverb
• ".......Ours is the age that is proud of machines that think and suspicious of men who try to." -- H. Mumford Jones
• ".......Without changing our patterns of thought, we will not be able to solve the problems we created with our current pattern of thought."  --A. Einstein
• ".......Change is difficult, but complacency and stagnation are surefire showstoppers..." --Walter Derzko

• ".......Never doubt that a small group of thoughtful, committed citizens can change the world; indeed, it's the only thing that ever has."  -- Margaret Mead

• ".......Small minds discuss people; Average minds discuss events; Great minds discuss ideas; --Anon

P. S. if this is your first visit to my blog, please go to our Welcome page

 

The Opportunity Clinic - 28 Tactics for Managing Your Business in a Recession Part 9 of 28 The dichotomous thinking trap

Many novel or even seasoned serial entrepreneurs get struck in what I call the dichotomous thinking trap. The noun dichotomy is defined by Webster’s dictionary as:

1: a division into two especially mutually exclusive or contradictory groups or entities <the dichotomy between theory and practice> ; also : the process or practice of making such a division <dichotomy of the population into two opposed classes>

2: the phase of the moon or an inferior planet in which half its disk appears illuminated

3 a: bifurcation; ; especially : repeated bifurcation (as of a plant's stem) b: a system of branching in which the main axis forks repeatedly into two branches c: branching of an ancestral line into two equal diverging branches

4: something with seemingly contradictory qualities <it's a dichotomy, this opulent Ritz-style luxury in a place that fronts on a boat harbor — Jean T. Barrett>

Dichotomous thinking is narrow thinking that divides the world, your problems or solutions into only two opposing camps: Yes/No; right/wrong; black/white; Ying / Jang; in-source/ outsource etc. Mainly that’s how the brain works in creating information patterns. Many people don’t even bother to think beyond these self-imposed, artificial, cognitive boundaries to come up with a third, forth or fifth option.

Here’s a case study of one Canadian business that broke free of the dichotomous thinking trap (source:  from the Opportunity Clinic^TM   workshop notes)

There’s in-sourcing and outsourcing that most business people consider when they ponder the strategic decision-Do I make things internally or let some else do it? And then they stop thinking at this point, because no other options seem obvious. But what about another angle- I call it “tethered or conditional outsourcing”

"In the late eighties, before the advent of ATM’s and the Internet, a Markham-Ontario based engineering services firm, called  Tertec  had designed a (telephone) networked robotic self standing video tape store system (VideoStar Video Machines) that could not only dispense video tapes, but also take them back ready for rental again, with complete automatic inventory management and a ton of other features that were state-of-the-art back then. 

To produce these video machine kiosks, Tertec had, in the early Nineties a relatively big staff –over 40 people with tools and machinery to process metal, such as lathes, milling machines and the like. This video machine technology business was then sold to a German company called Konzepta GmbH, who also had offices in Calgary, because of their other interests in oil and real estate.   As part of the deal, Tertec built them a plant in Calgary to manufacture these video machine kiosks.

Then they were faced with a problem-the overhead of managing the now-redundant Toronto

mechanical staff, as well as paying them and keeping them busy became a big burden on the firm.  Rather than just lay them off, Tertec tried another creative option-they offered the mechanical staff some of the machines for free, so that they could start their own businesses with the proviso that Tertec would receive priority, if they came to them with jobs and orders.  Some of the more entrepreneurial employees jumped at the chance to start their own spin-off business and agreed to the conditions.  This became a win-win situation for all parties concerned as everybody benefited from the deal. 

The moral of the story:

Rather than laying off people, companies should assist their staff to get jobs elsewhere or help them start their own businesses (with similar conditions that Tertec offered its staff), so that when needed, these people would be ready to help the companies as subcontractors or outsourced workers.  This would mitigate the pain of job losses and enrich the lives of the people as well as benefit the companies in the long run.  As Stelco used to say “Our product is steel but our strength is our people”!

 

Walter Derzko

Smart Economy

Toronto

Author of the soon-to-be-released book: Hard Times Golden Opportunities.. about opportunity recognition in a recession/ depression features 45 opportunity scenarios.

 

Related posts in this series:

The Opportunity Clinic - 28 Tactics for Managing Your Business in a Recession Part 8 of 28 Industry Architecture Opportunities

The Opportunity Clinic - 28 Tactics for managing your business in a recession Part 7 of 28  Geopolitical Opportunities;

The Opportunity Clinic; 28 Tactics for managing your Business in a recession Part 6 of 28 What's in your Recession Playbook?

The Opportunity Clinic; 28 Tactics for Managing your Business in a Recession Part 5 of 28 Category Killer Innovation-India's $10 laptop

The Opportunity Clinic - 28 Tactics for Managing Your Business in a Recession Part 4 of 28 “Left Behind “Opportunities- Go Green & Go Slow

The Opportunity Clinic - 28 Tactics for Managing Your Business in a Recession Part 3 of 28 Design Opportunities- Hope or Nostalgia

The Opportunity Clinic - 28 Tactics for Managing Your Business in a Recession Part 2 of 28 Innovation or Efficiency?

The Opportunity Clinic - 28 Tactics for Managing Your Business (& surviving and thriving) in a Recession Part 1of 28

Related Posts over that past year:

·         Opportunity Recognition in Difficult Times

·         Recession - Proofing your Business - Spotting & Designing Opportunities in a Downturn

·         Recession - Proofing your Business - Spotting & Designing Opportunities in a Downturn – June 25, 2008, Ontario College of Art Design, Toronto, ON

·         Recession-Proofing your Business-Strategies and Tactics for smoother sailing in turbulent seas

·         Master Class in Opportunity Recognition for entrepreneurs and intrapreneurs> May 30th 2008> University of Toronto

·         Turning Misery into Opportunity

·         Vacuum leaves pullout opportunities;

·         How will baby boomers handle the recession? Zoomers, Doomers, Gloomers, Opportuneurs

·         Recession, Depression and Shortages as Opportunities

·         Restructuring of American Business-A New Business Model?

·         Using New Yorker Cartoons for Opportunity Recognition /Sense-making & Pattern Recognition

·         Text Mining for S&T Scouting, Foresight and Opportunity Recognition

·         The Opportunity Clinic-swapping opportunity scenarios 08-002

© 2005-2009

Walter Derzko -"Changing the world, one idea at a time"©

Author of the soon-to-be-released book: Hard Times Golden Opportunities.. about opportunity recognition in a recession/ depression features 45 opportunity scenarios.

Expert, Consultant and Keynote Speaker on Emerging Smart Technologies, Innovation, Strategic Foresight, Business Development, Lateral Creative Thinking and author of an upcoming book on the Smart Economy "

The Smart Technology Blog: The Smart Economy -- Read, enjoy, explore, speculate, comment !!

To arrange for an in house presentation or briefing on smart technology see here

To explore the opportunities and threats of any new smart technology in your industry - Contact Me or explore how we can work together

• ".....Strategy without action is a day-dream; action without strategy is a nightmare"-old Japanese proverb
• ".......Ours is the age that is proud of machines that think and suspicious of men who try to." -- H. Mumford Jones
• ".......Without changing our patterns of thought, we will not be able to solve the problems we created with our current pattern of thought."  --A. Einstein
• ".......Change is difficult, but complacency and stagnation are surefire showstoppers..." --Walter Derzko

• ".......Never doubt that a small group of thoughtful, committed citizens can change the world; indeed, it's the only thing that ever has."  -- Margaret Mead

• ".......Small minds discuss people; Average minds discuss events; Great minds discuss ideas; --Anon

P. S. if this is your first visit to my blog, please go to our Welcome page

When will the Recession / Depression end ? Part 17 Recap from the World Economic Forum in Davos

Economists Nassim Taleb and Nouriel Roubini were popular speakers at the World Economic Forum in Davos last week, mainly because they were in the minority of economists that predicted the recession/depression well in advance...( as opposed to most other mainstream economists who were in total denial as late as the fall of 2008.)

A blog post on Seeking Alpha called Fresh From Davos: Taleb and Roubini Summarize Their Warnings captures the key points made by these two speakers about the current re/depression.

Nassim Taleb

1. The same people who did not see the financial crisis coming are still in charge. The same bankers who got us in trouble, are being given more (taxpayer) money. They all need to be thrown out and replaced by people who saw the crisis coming. (He nominated Roubini!)
2. Banks will need to be nationalized.
3. The financial system needs to be more robust against "black swans, discontinuities or wild cards." This will require living with less debt.
4. We need to eliminate the socialization of risk, privatization of profits.
5. Taleb is 100-200% in cash (so he has some shorts), so he can pick up the pieces when opportunity arrives.
6. Taleb believes deleveraging has just begun. There are 4-5 years to go because of the massive deleveraging still required.
7. We should get out of the mentality that we need to build debt on top of housing to drive the economy.
8. Investors should deleverage portfolios. Instead of dedicating 2x to equity, keep more cash and allocate a small portion to out-of-the-money options since you never know what is going to soar (or crash I imagine).

Nouriel Roubini

(note that he tried to shed the nickname Dr. Doom)

1. The condition in labor markets is crucial (in other words, unemployment numbers are NOT lagging indicators right now).
2. We need to resolve problems in the financial system: nationalize insolvent banks, clean them up, and sell them back to the private sector.
3. We need to invest in real (productive) physical and human capital (in other words, stop misallocating so much capital to housing).
4. Going forward, the economic news will be worse than expected. This produces about 20% further downside risk in the stock market.
5. Investors should stay in cash until about 12 months from now.
6. About $3.6 trillion in write-downs are needed to get through this crisis. We are through $1 trillion so far.

Walter Derzko, Smart Economy, Toronto

Author of the soon-to-be-released book: Hard Times Golden Opportunities.. about opportunity recognition in a recession/ depression features 45 opportunity scenarios.

Related Recession / Depression Posts

When will the recession / depression end ? Part 17 Recap from the World Economic Forum in Davos

When will the recession end? Part 16 It's all over, well sort of.

When will the recession end? Part 15 Year-end predictions for 2009 starting to come true

When will the recession end? Part 14 Four options for America's race to the bottom

When will the recession end? Part 13 Thirteen economic questions that economists can't answer

When will the recession end? Part 12 Bad times are good times for startups

When will the recession end? Part 11 Bank of Canada optimism

When will the recession end? Part 10, The Conformity Trap or Don't count on your economist for advise

When will the recession end? Part 9 Humor will signal recession /depression bottom

When will the recession end? Part 8 Lessons Learned from the last Post 9/11 recession; designing brilliant winning business models

When will the recession end? Part 7 False signals of recovery

When will this recession end? Part 6 The USA Paradox; Cheer vs Fear vs Transformation

When will the recession end? Part 5 Stop Auto Industry Bailouts, start buying Electric

When will the recession end? Part 4 The double dip housing crash in the USA

When will the recession end? Part 3 The coming collapse of the American Middle Class into an Underclass

When will this recession end ? Part 2 Do you listen to the Optimists or the Pessimists in 2009?

When will this recession end?

82 Signposts to the current Recession Depression Summary from 2008

© 2005-2009

Walter Derzko -"Changing the world, one idea at a time"©

Author of the soon-to-be-released book: Hard Times Golden Opportunities.. about opportunity recognition in a recession/ depression features 45 opportunity scenarios.

Expert, Consultant and Keynote Speaker on Emerging Smart Technologies, Innovation, Strategic Foresight, Business Development, Lateral Creative Thinking and author of an upcoming book on the Smart Economy "

The Smart Technology Blog: The Smart Economy -- Read, enjoy, explore, speculate, comment !!

To arrange for an in house presentation or briefing on smart technology see here

To explore the opportunities and threats of any new smart technology in your industry - Contact Me or explore how we can work together

• ".....Strategy without action is a day-dream; action without strategy is a nightmare"-old Japanese proverb
• ".......Ours is the age that is proud of machines that think and suspicious of men who try to." -- H. Mumford Jones
• ".......Without changing our patterns of thought, we will not be able to solve the problems we created with our current pattern of thought."  --A. Einstein
• ".......Change is difficult, but complacency and stagnation are surefire showstoppers..." --Walter Derzko

• ".......Never doubt that a small group of thoughtful, committed citizens can change the world; indeed, it's the only thing that ever has."  -- Margaret Mead

• ".......Small minds discuss people; Average minds discuss events; Great minds discuss ideas; --Anon

P. S. if this is your first visit to my blog, please go to our Welcome page

82 Signposts to the current Recession Depression Summary from 2008

The Opportunity Clinic - 28 Tactics for managing your business in a recession Part 7 of 28 Geopolitical Opportunities; The hypothesis of Economic Warfare

Things are never what they appear to be, especially in geopolitics. Former Forbes writer and business and energy journalist Jim (or James) Norman, who wrote the book- The Oil Card, and blew the whistle on Enron with the SEC, argues that the United States manipulated the price of oil as a kind of economic weapon against countries such as Russia and China, implying that it overtly uses oil as an economic weapon of financial destruction, and that we, the  car drivers and gas consumers in the West are just collateral damage in this economic warfare game. In the futures exchange (NYMEX), an unlimited amount of money from pension funds was used to overwhelm short sellers of crude oil, as a way of running up the price, he explained. China was hurt by higher oil prices much more than the United States, and has experienced reduced exports, the closing of factories, and massive unreported unemployment, he noted.

The opposite technique, the lowering of oil prices, is currently wrecking the Russian economy, Norman suggested. Russia has little besides its natural resources, and the softening of the crude market could eventually force regime change there, and in China he said.The real reason America went to war with Iraq was because of China, and it had nothing to do with WMD or terrorism, Norman asserted. As sanctions were lifting in 2003, Saddam was going to cut a deal with China so they could acquire ownership of underground oil fields, and the US sought to prevent this, he said. While the US is propping up India as a foil to China, Russia is now moving in a direction of realigning with China, against the US and Western interests, he added.

[N.B. BusinessWeek speculates that India's  growth may outpace China's economic growth--Walter Derzko]

Norman provides some fascinating, logical common sense insights on what could happen next in the global geopolitical space. He gets you thinking about some probable what-if scenarios and what the resulting consequences might be and where the business opportunities might emerge.

YouTube - Economic Warfare Jim Norman (N.B. each part is about a 10 minutes long segment which is part of a longer radio interview)

Part 1;  Part 2;   Part 3;  Part 4 ; Part 5;   Part 6;  Part 7;  Part 8;  Part 9;  Part 10;  Part 11

Here's a plug for his book: The Oil Card -Global Economic Warfare in the 21st Century By James R. Norman

Challenging the conventional wisdom surrounding high oil prices, this compelling argument sheds an entirely new light on free-market industry fundamentals. By deciphering past, present, and future geopolitical events, it makes the case that oil pricing and availability have a long history of being employed as economic weapons by the United States. Despite ample world supplies and reserves, high prices are now being used to try to rein in China—a reverse of the low-price strategy used in the 1980s to deprive the Soviets of hard currency. Far from conspiracy theory, the debate notes how the U.S. has previously used the oil majors, the Saudis, and market intervention to move markets—and shows how this is happening again. This compact and unorthodox analysis will appeal to a broad audience—from energy consumers puzzled by intractably high oil prices to producers wondering how long windfall prices can defy gravity.

James R. Norman is a veteran business journalist and energy reporter. He is currently a contributing writer for McGraw-Hill's Platts Oilgram News. He has also written for Forbes, Business Week, and the Ann Arbor News, where he won an award for investigative reporting on an oil and gas scam. He lives in New York City.

Walter Derzko

Smart Economy

Toronto

Author of the soon-to-be-released book: Hard Times Golden Opportunities.. about opportunity recognition in a recession/ depression features 45 opportunity scenarios.

 

Related posts in this series:

The Opportunity Clinic -  28 Tactics for managing your business in a recession Part 7 of 28  Geopolitical Opportunities;

The Opportunity Clinic; 28 Tactics for managing your Business in a recession Part 6 of 28 What's in your Recession Playbook?

The Opportunity Clinic; 28 Tactics for Managing your Business in a Recession Part 5 of 28 Category Killer Innovation-India's $10 laptop

The Opportunity Clinic - 28 Tactics for Managing Your Business in a Recession Part 4 of 28 “Left Behind “Opportunities- Go Green & Go Slow

The Opportunity Clinic - 28 Tactics for Managing Your Business in a Recession Part 3 of 28 Design Opportunities- Hope or Nostalgia

The Opportunity Clinic - 28 Tactics for Managing Your Business in a Recession Part 2 of 28 Innovation or Efficiency?

The Opportunity Clinic - 28 Tactics for Managing Your Business (& surviving and thriving) in a Recession Part 1of 28

© 2005-2009

Walter Derzko -"Changing the world, one idea at a time"©

Author of the soon-to-be-released book: Hard Times Golden Opportunities.. about opportunity recognition in a recession/ depression features 45 opportunity scenarios.

Expert, Consultant and Keynote Speaker on Emerging Smart Technologies, Innovation, Strategic Foresight, Business Development, Lateral Creative Thinking and author of an upcoming book on the Smart Economy "

The Smart Technology Blog: The Smart Economy -- Read, enjoy, explore, speculate, comment !!

To arrange for an in house presentation or briefing on smart technology see here

To explore the opportunities and threats of any new smart technology in your industry - Contact Me or explore how we can work together

• ".....Strategy without action is a day-dream; action without strategy is a nightmare"-old Japanese proverb
• ".......Ours is the age that is proud of machines that think and suspicious of men who try to." -- H. Mumford Jones
• ".......Without changing our patterns of thought, we will not be able to solve the problems we created with our current pattern of thought."  --A. Einstein
• ".......Change is difficult, but complacency and stagnation are surefire showstoppers..." --Walter Derzko

• ".......Never doubt that a small group of thoughtful, committed citizens can change the world; indeed, it's the only thing that ever has."  -- Margaret Mead

• ".......Small minds discuss people; Average minds discuss events; Great minds discuss ideas; --Anon

P. S. if this is your first visit to my blog, please go to our Welcome page

When will the recession end? Part 15 Year-end predictions for 2009 starting to come true

Even I was surprised how quickly the economic situation in the US is deteriorating and how some of my predictions made on Dec 28, 2008 for 2009 are already starting to come true in early 2009..for example...

 Global Hot spots?  PREDICTION [...local US state governments will teeter on the verge of bankruptcy and services are drastically curtailed or eliminated. ]

 

REALITY

On Feb 2, 2009 the State of California announced that it was bankrupt, with a $42 billion dollar budget deficit. The news received relatively little national mass media coverage. Local news stations reported:

"Declaring itself officially broke, the state government will begin issuing IOU's instead of check for grants, schools and any other organization or program which was previously receiving funding. Additionally, your California income tax refund check this year will not be sent out until after a balanced budget is passed. Those who have already filed their taxes will get an announcement noting the delay…[…]… residents won't be getting their state tax rebates, scholarships to Cal Grant college will go unpaid, vendors invoices will remain uncollected and county social services will cease. Services and payments will resume once state legislators come to an agreement on the budget. The Governor's plans involve a mix of spending cuts and a temporary sales tax increase, along with streamlining some of the state government's processes…."

CNN reported: "Some 46 states face budget shortfalls, forcing them to slash funding for many services," …[..]… "But California, the largest state in the union by population, faces a deficit that totals more than 35% of its general fund."

 Global Hot spots?  PREDICTION  [Creeping global protectionism increases, replacing globalization and free trade-Watch for new tariffs in India, China, USA and Russia]

REALITY

Remember back in November of last year at the G-20 conference when all the participants plegded not to stir protectionism. HaHa Fat chance. This round of "verbal" trade wars between Canada and the US will eventually be settled,  by the US congress backing down from protectionist threats, simply because the US does not produce enough local steel and does not have enougth steel-making capacity to meet its emerging infrastructure needs. America also needs to import iron ore from Canada to keep its steel mills going. The "Buy American" rhetoric is  designed for local voter consumption and eventual legislation will likely be watered down, taking Canada off the hook. (see  'Buy American' Rider Sparks Trade Debate.

But this won’t be the last hint of protectionist fights. They will continue globally in more subtle forms in every major trading country

 

Walter Derzko, Smart Economy, Toronto

Author of the soon-to-be-released book: Hard Times Golden Opportunities.. about opportunity recognition in a recession/ depression features 45 opportunity scenarios.

Related Recession Posts

When will the recession end? Part 14 Four options for America's race to the bottom

When will the recession end? Part 13 Thirteen economic questions that economists can't answer

When will the recession end? Part 12 Bad times are good times for startups

When will the recession end? Part 11 Bank of Canada optimism

When will the recession end? Part 10, The Conformity Trap or Don't count on your economist for advise

When will the recession end? Part 9 Humor will signal recession /depression bottom

When will the recession end? Part 8 Lessons Learned from the last Post 9/11 recession; designing brilliant winning business models

When will the recession end? Part 7 False signals of recovery

When will this recession end? Part 6 The USA Paradox; Cheer vs Fear vs Transformation

When will the recession end? Part 5 Stop Auto Industry Bailouts, start buying Electric

When will the recession end? Part 4 The double dip housing crash in the USA

When will the recession end? Part 3 The coming collapse of the American Middle Class into an Underclass

When will this recession end ? Part 2 Do you listen to the Optimists or the Pessimists in 2009?

When will this recession end?

82 Signposts to the current Recession Depression Summary from 2008

 

© 2005-2009

Walter Derzko -"Changing the world, one idea at a time"©

Author of the soon-to-be-released book: Hard Times Golden Opportunities.. about opportunity recognition in a recession/ depression features 45 opportunity scenarios.

Expert, Consultant and Keynote Speaker on Emerging Smart Technologies, Innovation, Strategic Foresight, Business Development, Lateral Creative Thinking and author of an upcoming book on the Smart Economy "

The Smart Technology Blog: The Smart Economy -- Read, enjoy, explore, speculate, comment !!

To arrange for an in house presentation or briefing on smart technology see here

To explore the opportunities and threats of any new smart technology in your industry - Contact Me or explore how we can work together

• ".....Strategy without action is a day-dream; action without strategy is a nightmare"-old Japanese proverb
• ".......Ours is the age that is proud of machines that think and suspicious of men who try to." -- H. Mumford Jones
• ".......Without changing our patterns of thought, we will not be able to solve the problems we created with our current pattern of thought."  --A. Einstein
• ".......Change is difficult, but complacency and stagnation are surefire showstoppers..." --Walter Derzko

• ".......Never doubt that a small group of thoughtful, committed citizens can change the world; indeed, it's the only thing that ever has."  -- Margaret Mead

• ".......Small minds discuss people; Average minds discuss events; Great minds discuss ideas; --Anon

P. S. if this is your first visit to my blog, please go to our Welcome page

The Opportunity Clinic; 28 Tactics for managing your Business in a recession Part 6 of 28 What's in your Recession Playbook?

Most executives or entrepreneurs that I talk to have elaborate growth strategies  for boom times or  the upturn in a business cycle but only a single approach/tactic in the reverse down leg or bust cycles- CUTS & LAYOFFS. Be they:  executing layoffs, canceling previously signed contracts, killing product lines or leaning on clients to pay bills faster-they form a narrow mindset. Although necessary in many cases, they are not very creative nor original. In fact, this single-minded mono-strategic approach may be disastrous for your firm.

All baseball, football and basketball teams have set plays in their playbook roster (such as the flea flicker or the "Hail Mary" in football, or the bunt and double play in baseball) that they practice  religously for unqiue circumstances in a game situation. The same logic doesn't seem to transfer into business situations for some reason. Funny that CEO's  practice simulations for problem solving or crisis mitigation (ie, WMD,  SARS or Avian Flu) but they don't spend nearly enough "thinking time" for opportunity recognition or opportunity design.

From the jargon in our Opportunity Clinic © ™ workshop, your Recession Playbook requires six sets of strategies and not just one.

1. coping or surviving strategies for the down leg of a recession,
2. coping or surviving strategies for the bottom of a recession, (it may stretch out to be a long one)
3. opportunity-spotting or opportunity-designing strategies for the down leg of a recession,
4. opportunity-spotting or opportunity-designing strategies for the bottom of a recession,
5. opportunity-spotting or opportunity-designing strategies for the up leg of a recovery, and
6. a cluster of "Hail Mary" strategies in case all bets are off and we head into an honest to goodness depression

The above opportunity windows will vary depending on what the recession / depression bottom looks like and the depth and breadth of the economic fall. As I've commented on this blog before, we could be facing a v-shaped bottom, a V-shaped bottom, a W-shaped bottom, a vW-shaped bottom, an L-shaped flat bottom or an extended L-shaped flat bottom. The Opportunity Clinic has over 300 generic Opportunity Scenarios or Windows that executives can use as templates to explore or design new "opportunity spaces" for their business to not just survive but thrive in a recession.

Newsweek supports this notion, writing this week:

 

“In theory, every manager should have the skills needed to guide companies through a recession, the way every baseball player is supposed to know how to bunt or steal a base.” …[but most don't]…"After spending their careers in single-minded pursuit of growth, business leaders have to adjust their mentality,"…[…]… "The new reality is that, barring acquisitions, [the average] company will be smaller two years from now than it is today."

If you are interested in extending your Recession Playbook, call us or email us (by clicking on my name in the signature below) to get more information about the Opportunity Clinic © ™.

Walter Derzko, Smart Economy, Toronto

Author of the soon-to-be-released book: Hard Times Golden Opportunities.. about opportunity recognition in a recession/ depression features 45 opportunity scenarios.

Related posts in this series:

The Opportunity Clinic; 28 Tactics for managing your Business in a recession Part 6 of 28 What's in your Recession Playbook?

The Opportunity Clinic; 28 Tactics for Managing your Business in a Recession Part 5 of 28 Category Killer Innovation-India's $10 laptop

The Opportunity Clinic - 28 Tactics for Managing Your Business in a Recession Part 4 of 28 “Left Behind “Opportunities- Go Green & Go Slow

The Opportunity Clinic - 28 Tactics for Managing Your Business in a Recession Part 3 of 28 Design Opportunities- Hope or Nostalgia

The Opportunity Clinic - 28 Tactics for Managing Your Business in a Recession Part 2 of 28 Innovation or Efficiency?

The Opportunity Clinic - 28 Tactics for Managing Your Business (& surviving and thriving) in a Recession Part 1of 28

Related Posts over that past year:

·         Opportunity Recognition in Difficult Times

·         Recession - Proofing your Business - Spotting & Designing Opportunities in a Downturn

·         Recession - Proofing your Business - Spotting & Designing Opportunities in a Downturn – June 25, 2008, Ontario College of Art Design, Toronto, ON

·         Recession-Proofing your Business-Strategies and Tactics for smoother sailing in turbulent seas

·         Master Class in Opportunity Recognition for entrepreneurs and intrapreneurs> May 30th 2008> University of Toronto

·         Turning Misery into Opportunity

·         Vacuum leaves pullout opportunities;

·         How will baby boomers handle the recession? Zoomers, Doomers, Gloomers, Opportuneurs

·         Recession, Depression and Shortages as Opportunities

·         Restructuring of American Business-A New Business Model?

·         Using New Yorker Cartoons for Opportunity Recognition /Sense-making & Pattern Recognition

·         Text Mining for S&T Scouting, Foresight and Opportunity Recognition

·         The Opportunity Clinic-swapping opportunity scenarios 08-002

© 2005-2009

Walter Derzko -"Changing the world, one idea at a time"©

Expert, Consultant and Keynote Speaker on Emerging Smart Technologies, Innovation, Strategic Foresight, Business Development, Lateral Creative Thinking and author of an upcoming book on the Smart Economy "

The Smart Technology Blog: The Smart Economy -- Read, enjoy, explore, speculate, comment !!

To arrange for an in house presentation or briefing on smart technology see here

To explore the opportunities and threats of any new smart technology in your industry - Contact Me or explore how we can work together

• ".....Strategy without action is a day-dream; action without strategy is a nightmare"-old Japanese proverb
• ".......Ours is the age that is proud of machines that think and suspicious of men who try to." -- H. Mumford Jones
• ".......Without changing our patterns of thought, we will not be able to solve the problems we created with our current pattern of thought."  --A. Einstein
• ".......Change is difficult, but complacency and stagnation are surefire showstoppers..." --Walter Derzko

• ".......Never doubt that a small group of thoughtful, committed citizens can change the world; indeed, it's the only thing that ever has."  -- Margaret Mead

• ".......Small minds discuss people; Average minds discuss events; Great minds discuss ideas; --Anon

P. S. if this is your first visit to my blog, please go to our Welcome page

When will the recession end? Part 14 Four options for America's race to the bottom

All the leveraged debt bubbles (15 in total) that I’ve been discussing on this blog, were not started in 2001 after the last recession, as most people assume. It actually goes back to 1980 or 28 years to mount to these levels. Total US consumer debt in 1980 was a manageable $352 billion. Compare that with $2.6 trillion today. American consumers have increased their total debt level by 738% in 28 years. Revolving credit increased from $56 billion in 1980 to $982 billion today, an order of magnitude increase of  1,750%  in 28 years.

In 1980, the US GDP was $2.8 trillion. Today it’s  $14 trillion and but declining. Since, 1980, American GDP has grown by 500%, but the national debt has grown more than twice as fast as GDP.

 

(Source: stats from the  James Quinn blog )

 

This is an unsustainable trend. America’s  financial debt bubble and resulting economic disaster took 28 years to inflate  and will not likely be fixed in a single year or two, unless the US defaults on its debts As I see it, there are only 4 real options for America's race to the bottom. Take all you bad medicine all at once, but risk overthrow of the current government in power (see options 1) and 2) below)  or prolong the agony and pain of the depression for everyone, possibly for 2 decades like in Japan currently -since 1990. (see options 3) and 4) below)

 

1. Cancel debt & start first-world debt restructuring
2. Default-like the Russians and Argentines did last decade
3. Print more money & live with the consequences-hyper inflation and devalued currency
4. Just keep borrowing more money, assuming the world still has faith in the $US and T-bills-prolong the pain for everyone.

Niall Ferguson makes a case for outright default in a Vanity Fair story - Niall Ferguson: America Needs to Cancel Its Debt

Prudent businesses need to make contingency plans for all 4 cases and ask the right "what -if" questions.

© 2005-2009

Walter Derzko -"Changing the world, one idea at a time"©

Author of the soon-to-be-released book: Hard Times Golden Opportunities.. about opportunity recognition in a recession/ depression featuring 45 opportunity scenarios.

Expert, Consultant and Keynote Speaker on Emerging Smart Technologies, Innovation, Strategic Foresight, Business Development, Lateral Creative Thinking and author of an upcoming book on the Smart Economy "

The Smart Technology Blog: The Smart Economy -- Read, enjoy, explore, speculate, comment !!

To arrange for an in house presentation or briefing on smart technology see here

To explore the opportunities and threats of any new smart technology in your industry - Contact Me or explore how we can work together

• ".....Strategy without action is a day-dream; action without strategy is a nightmare"-old Japanese proverb
• ".......Ours is the age that is proud of machines that think and suspicious of men who try to." -- H. Mumford Jones
• ".......Without changing our patterns of thought, we will not be able to solve the problems we created with our current pattern of thought."  --A. Einstein
• ".......Change is difficult, but complacency and stagnation are surefire showstoppers..." --Walter Derzko

• ".......Never doubt that a small group of thoughtful, committed citizens can change the world; indeed, it's the only thing that ever has."  -- Margaret Mead

• ".......Small minds discuss people; Average minds discuss events; Great minds discuss ideas; --Anon

P. S. if this is your first visit to my blog, please go to our Welcome page

 

 

The Opportunity Clinic - 28 Tactics for Managing Your Business in a Recession Part 3 of 28 Design Opportunities- Hope or Nostalgia

Mention the word design and what do you think of? Most people associate it with product design-creating functional differentiation through novel features, effectiveness through ergonomic principles, superior performance, convenience,etc. Think Apple iPod, iPhone or the Dyson vacuum cleaner.

In difficult economic times people turn back to nostalgia and comfort foods. I saw the following advertisement in the subway last night.

 

“Eating Kraft Peanut Butter makes you feel great but you can’t narrow it down to just one feeling,” said Jordan Fietje, senior product manager, marketing, for Kraft Canada. “We are reminding our consumers of all the good feelings you get when you have peanut butter.” ....A heart, happy face, peace sign and sunshine are among the 10 symbols used throughout the campaign.

Design is increasingly being acknowledged as an important strategic tool in creating preference and deeper emotional value for the consumer. Different design elements may be used strategically to create two very different outcomes or value chains from a consumer’s perspective. Certain design elements are more likely to create functional product differentiation and transactional consumer outcomes, while other design strategies tap into a more emotional form of value creation. An emotional focus in value creation is more likely to create desired and powerful outcomes such as loyalty, joy of use, delight and even passion. Given current business trends towards relationship-based customer management, this emphasis on emotional value creation through product design is becoming particularly relevant and a growing opportunity window. Entrepreneurs need to consider product design strategies that can use to enhance the transactional as well as relational values in their customer relationships...so you can design nostalgia or hope into a product. Wonder if Olbama is listening?

From the Opportunity Clinic ™ ©  1981-2009

Walter Derzko, Smart Economy, Toronto

Author of the soon-to-be-released book: Hard Times Golden Opportunities.. about opportunity recognition in a recession/ depression featuring 45 opportunity scenarios.

Realted posts in this series:

The Opportunity Clinic; 28 Tactics for managing your Business in a recession Part 6 of 28 What's in your Recession Playbook?

The Opportunity Clinic; 28 Tactics for Managing your Business in a Recession Part 5 of 28 Category Killer Innovation-India's $10 laptop

The Opportunity Clinic - 28 Tactics for Managing Your Business in a Recession Part 4 of 28 “Left Behind “Opportunities- Go Green & Go Slow

The Opportunity Clinic - 28 Tactics for Managing Your Business in a Recession Part 3 of 28 Design Opportunities- Hope or Nostalgia

The Opportunity Clinic - 28 Tactics for Managing Your Business in a Recession Part 2 of 28 Innovation or Efficiency?

The Opportunity Clinic - 28 Tactics for Managing Your Business (& surviving and thriving) in a Recession Part 1of 28

 

Related Posts over that past year:

·         Opportunity Recognition in Difficult Times

·         Recession - Proofing your Business - Spotting & Designing Opportunities in a Downturn

·         Recession - Proofing your Business - Spotting & Designing Opportunities in a Downturn – June 25, 2008, Ontario College of Art Design, Toronto, ON

·         Recession-Proofing your Business-Strategies and Tactics for smoother sailing in turbulent seas

·         Master Class in Opportunity Recognition for entrepreneurs and intrapreneurs> May 30th 2008> University of Toronto

·         Turning Misery into Opportunity

·         Vacuum leaves pullout opportunities;

·         How will baby boomers handle the recession? Zoomers, Doomers, Gloomers, Opportuneurs

·         Recession, Depression and Shortages as Opportunities

·         Restructuring of American Business-A New Business Model?

·         Using New Yorker Cartoons for Opportunity Recognition /Sense-making & Pattern Recognition

·         Text Mining for S&T Scouting, Foresight and Opportunity Recognition

·         The Opportunity Clinic-swapping opportunity scenarios 08-002

© 2005-2009

Walter Derzko -"Changing the world, one idea at a time"©

Expert, Consultant and Keynote Speaker on Emerging Smart Technologies, Innovation, Strategic Foresight, Business Development, Lateral Creative Thinking and author of an upcoming book on the Smart Economy "

The Smart Technology Blog: The Smart Economy -- Read, enjoy, explore, speculate, comment !!

To arrange for an in house presentation or briefing on smart technology see here

To explore the opportunities and threats of any new smart technology in your industry - Contact Me or explore how we can work together

• ".....Strategy without action is a day-dream; action without strategy is a nightmare"-old Japanese proverb
• ".......Ours is the age that is proud of machines that think and suspicious of men who try to." -- H. Mumford Jones
• ".......Without changing our patterns of thought, we will not be able to solve the problems we created with our current pattern of thought."  --A. Einstein
• ".......Change is difficult, but complacency and stagnation are surefire showstoppers..." --Walter Derzko

• ".......Never doubt that a small group of thoughtful, committed citizens can change the world; indeed, it's the only thing that ever has."  -- Margaret Mead

• ".......Small minds discuss people; Average minds discuss events; Great minds discuss ideas; --Anon

P. S. if this is your first visit to my blog, please go to our Welcome page