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Sunday, May 28, 2023

To Succeed in the Next Economy, Get Smarter

Recently, I spoke before a trade group comprised of local bricks and mortar retailers. The people to whom I was speaking sold flooring. My talk was new to them, but familiar to me: the next economy.

In the next economy, I told them, all companies are going to have to be meaner, leaner, greener, keener and better connected. Then I told them that we are already well into the next economy. The next economy being an economy that operates in ways substantially different from the economy that preceded it.

The old economy had its roots in the post-World War II era with the U.S. as the dominant player in the global economy. In the next economy, the U.S. is but one of many leading players.

In simple terms, if the old economy was analog, the new economy is digital. The old economy is bricks and mortar; the new economy is clicks and mortar and may soon be much more about clicks than mortar. The old economy is local, the next economy global.

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You probably get the drift about the next economy for at least two reasons: First, I am among a multitude of people writing about this. See Thomas Friedman’s book, “The World is Flat,” for example. Second (and most importantly), if you are in business today, you are living, minute-by-minute, with the transition to the next economy.

Meaner, Leaner and Keener

So what is this notion about meaner, leaner, greener, keener and better connected? For me, these are the underpinnings of the next economy.

Meaner is a euphemism for an economy that is more competitive; the marketplace is meaner, tougher, more demanding of companies because business moves at a faster pace, is more transparent and accessible. In the case of the retailers, their customers were buying product from out of state via the Internet, having it delivered and installed at prices well below what they had been charging. That’s a meaner economy.

Meaner gives way to leaner. It is no accident that we use the words lean and mean together at times when describing people who are tough and ready for whatever may come their way.

In the case of the next economy, companies experiencing a meaner marketplace also experience downward pressure on their margins. They respond, in turn, by doing more with less; hence, they run a leaner operation than in previous times. This is most clearly reflected in the number of people companies employ because leaner means, above all, doing the same amount of business with fewer people.

Green is now so much a part of our lexicon that, in some way, nearly every company today considers itself green. Besides the obvious environmental benefits, green is important because it implies doing more with less, as in leaner.

Keener is all about being smarter. Successful companies today not only try to be smarter about how they are doing business, they work to make their customers smarter as well. Making your customers smarter is the new differentiator, the value add that also adds margin.

Apple Inc. is the best example of a company that is not only smart, but makes its customers smarter as well.

Finally, we have connected. Today, we are all connected to one another in ways we could have only imagined a decade ago. Successful companies will leverage that connection to their advantage, using it to be more competitive, with greater efficiency to make themselves and their customers smarter. Think mobile devices as the connective tissue for businesses in the 21st century.

So, with my next economy overview as a backdrop, I was challenged with the questions, “What do we do about our retail customers who go on the Internet to find lower prices or better quality or a combination of both and then buy via that channel? How can we compete with that?”

My answer should have been no surprise: Get mean and lean (and green if you will) and use the power of connections, but, most importantly, make your customers smarter. How do you do that? Get smarter yourself.

Reo Carr is editor-in-chief of the San Diego Business Journal.


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