Despite the economic environment, there are some universal truths that businesses ignore at their own risk. One of the most important is that quality and a strong reputation are the only ways to consistently drive new business and guarantee repeat customers who stay with you for the long term.
While cost-cutting measures may seem like a good idea to solve short-term cash flow challenges, those of us who have been around the block a time or two have seen these strategies go awry again and again. Companies who adopt austere and short-sighted cost cutting measures inevitably watch as this mentality not only fails to achieve it’s the intended aim (reducing expenses), but also inadvertently create situations that hurt their long-term viability.
In this age of free information and 24-hour news cycles, companies can’t afford the bad press that is often the companion to shoddy production and oversight processes. Law suits charging companies for serving horse meat and General Motor’s recent car recall catastrophe can spell billions of dollars in fines – and even more in fees to the PR firm they hire to rebuild their brand.
Even in an age of shrinking margins and deflationary pressures, it’s vital not to take your cost cutting ethos too far. As in the case of GM, otherwise you may find you have thrown the baby out with the bath water.
Ultimately, leadership’s critical mission is to instill in its staff an understanding that, in the end, creating quality output is better for your company than churning out products at the absolute lowest cost. As you can see in the chart and link below, the costs of ignoring this core business principal can be dire.
The ultimate results of GM’s cost cutting measures on its stock prices
2nd Quarter Industry Insight Survey 2013
What a year so far.
As many of you know, our offices are located in Copley Square immediately adjacent to the first bomb of the Boston Marathon. At the time I write this, the offices are a crime scene and we are not allowed access. The outpouring of concern from you has been heartening. For current information our Facebook page is best.
Yes, these are very tough times. We are doing everything we can to help our people and local community recover. One way you can help is to give even a small donation to this fund http://onefundboston.org. We have. The fund was set up by the Mayor of Boston and the Governor of Massachusetts.
A few words about our results and the current economic environment.
Last survey we had the election results and fiscal cliff. This survey we have sequester, payroll tax increases, commodity crash and terrorist attacks.
The recent economic news has been, for the most part, negative (not unexpectedly considering the headlines). The disconnect between Main street and Wall street has never been more apparent.
We expect the GDP numbers due out to reflect a sharp contraction. Our survey respondents, when asked about quarter one profitability, indicated the largest quarter to quarter contraction in the history of the survey. We are also very concerned about the current high level of unemployment taxes levied on businesses and the negative impact it is having on hiring. Hiring is the keystone of any recovery. If people do not have funds to spend, everyone’s business suffers.
I think every business person has similar concerns right now: How long will things be slow or contracted? How can we get regulations reduced? How do we reduce the extra expenses coming at us from every angle? On top of all these issues, is the looming Obamacare implementation concern. Based on the survey results concerning Obamacare it appears that confusion reigns supreme.
Let’s get to the survey and see what else we can find out.
Over the last days, the sheer number of people and companies checking in with us is completelyamazing and unexpected – We Thank You.At this time we are still unable to access our Corporate Headquarters and the Boston Office.We posted the following on Facebook the other day and will update that information source.Yes, these are very tough times. We are doing everything we can to help our local communiity and people recover. One way you can help is even a small donation to this fund – http://onefundboston.org it was set up by the Mayor of Boston and the Govenor of the State. We have.The following is the information we shared after the event:As many are aware Semper’s HQ is located a short distance from todays terrible cowardly events. NO STAFF was injured.The authorities have compelled we evacuate our HQ and Local office. This could be for 24 hours from the time of the heinous acts.We ask- Please be patient if you have issues you need answers too till things settle and we can figure out how to deal with each request. This type of event is new to everyone here.This was a very traumatic incident. Those of us in Boston saw many injured and broken people. Being close to an event like this is MUCH different then seeing it on TV. The Marathon is and will be again all about healthy people, families and people supporting people.To see the Marathon so violated and the people so damaged – hard to explain. So we ask our outer offices, our clients and external staff to understand we will work very hard to provide the usual excellent level of service you are used to.We realize we still need to do our jobs and take care of each other and people that count on us. I ask the Boston Teams and HQ STAFF (in fact, all of you) to take a breath, hug your loved ones, rejoice in life and family. Remember that fear is not a way to live life.After the senseless attack many of use joined in a huge BIG HUG a Group HUG, that is what life is about.Hate and Violence are NOT THE ANSWER.United We StandSemper and Semper PT
Was sent an email today with a link to “10 of the worst jobs of the future”. There were a number related directly to the printing industry. My thoughts on it are found below.
Please comment if you wish to evolve the dialog.
I can not see many industries or job types that have a bright future. Looking at healthcare workers and energy workers and the eco system surrounding those industries as a few of the areas that will see growth.
Imagine being a bank worker were now your job either goes away or is off-shored as the personal touch is replaced by the video touch.
Or in this case any worker. As we see the relentless push to increase profit and reduce head count. Mind you UTC is just the example, many companies are doing what UTC is doing.
And the soaring cost of workers is crushing. And to date the Affordable Care Act has not hit or been fully realized. Most people I speak with have no clue how the affordable care act works or will impact their companies. I am seeing our larger clients start to increase use of temp workers and decrease hiring as they want to decrease head count in preparation for the changes coming. You will also see companies look at their work force and decide what types of workers are ones they can work part time (30 or under hours a week) to avoid parts of the Affordable care act.
Looking at the cost of workers is tough. The extension of unemployment from 28 weeks to 99 is rearing its head. Business are now paying for that extension in a large way. I am paying many thousands of dollars more per week for unemployment than I was last year. It is incredible.
In conclusion, while print certainly has its challenges, it is a much bigger issue than our industry and it makes sense that we make sure and understanding that Print is not a negative in and on to itself, but an overall shift is happening in the worker company paradigm.
Our Thoughts to those impacted by Hurricane Sandy.
The busy season is here. Many had a tough third quarter as the overall economy slowed in June and July through about mid-August. The afterburners kicked on about the time the Fed eased in September. We had a mini-slowdown the two weeks after Columbus Day weekend but things seem back on track currently.
The election as I write this is one week away. Status quo or change is anyone’s guess. Maybe the people at Time magazine have an idea, as last election I received my copy in the mail announcing Obama won the morning after the election closed. One way or the other interesting times ahead.
Frankly, I could do less with interesting and more just plain steady and growing. We added a special question to this survey regarding the personal cost in managing through these economic times. Some interesting results to share.
We appreciate your support over the last years for the survey and hope it is a help.
Let’s get to the survey.
To access the survey: CLICK HERE