Two years ago, consultant Jim Bronstien showed a slide presentation at an IBEX seminar titled "Running the Organization (in strange times)," which coincided roughly with the start of the economic decline and its aftermath, soon to be dubbed the "new normal."
The industry veteran's observations included the following:
- Consumers have less money.
- Demand for products and services has fallen.
- There is greater price sensitivity for products and services.
- Tight credit markets have made borrowing difficult.
- Customers remain hard to satisfy.
- Boats are still "unnecessarily complex, expensive machines."
- The industry remains a high-cost, low-margin business.
I heard Bronstien speak at IBEX last year on boatyard management issues, and he began by quickly reviewing some of the same slides, which he and the audience, by virtue of the many nodding heads, concluded were "still true."
I called Bronstien in advance of this year's combined IBEX and MAATS show, and we ran over the list once more. No big surprise - things haven't changed much. "They're probably truer than ever," says Bronstien, president of Marine Business Advisors (www.marineba.com) and former owner and president of the Rybovich Spencer yard in West Palm Beach, Fla.
I hesitate to use the phrase "welcome to the new normal" because it's become a cliché, but it nonetheless has a ring of truth, given the depth and length of the trough we've been in. Bronstien, however, is more likely to say the expression has the illusion of truth.
"I've heard people say, 'When things get back to normal, things will be OK,' " says Bronstien, 49, who has degrees in finance and marketing from the University of Colorado. "Maybe this is normal? New normal to me is a very odd term. I don't know what the definition of normal is." He pauses for a moment before taking a stab at answering his own question: "Normal is continuous change."
Semantics notwithstanding, where are we today?
Like many of us, Bronstien sees small "pockets" of brightness. "People are still buying boats and fixing boats and using boats," he says. "It just might not be at the level we'd like."
But he's also clear-eyed when it comes to forecasting what lies ahead. "If you believe in cycles, at some point things will turn," he says. "But how far will things come back? I don't expect it to be back to the heydays for a long, long, long time."
Through downsizing, careful cost controls and improved efficiency, businesses have learned to become profitable on much smaller volumes, Bronstien says. "I don't know if that's going to change in the near future." Those companies that have made it this far, he notes, should be in a position to ride out the rest of the downturn.
"If you're still alive and kicking, you've probably done something right," he says.
What follows is a condensed version of some of the collective marine and boatyard wisdom Bronstien has delivered to his IBEX audience and his clients.
- Keep things in perspective. "No one needs a boat," Bronstien says. "They choose to have one."
- Perception is reality. "I'm a huge believer that things will get better when people believe they'll get better," the consultant says.
- Periodically re-evaluate your priorities and the viability of your business model. And make sure your strategic plan is keeping you on course.
- Hope and wait won't get the job done. Focus on the have-tos and defer the want-tos.
- Accept the fact that your business is worth less than it used to be.
- More than ever, cash is still king.
- Understand what your customers are going through. Be more flexible with clients and increase the level of communication with them. Provide more personalized service.
- Trust your CFO and make sure he or she isn't a "yes" person. You need timely financial reports that you understand.
- Challenge the status quo. Find new markets and revenue streams.
- Don't complain about things being slow. Busy places get business; slow ones don't.
Bronstien's shorthand vision of the future would go something like this:
"Fewer companies," Bronstien says. "Fewer products. More stable companies. A more stable industry. I'm not sure that is necessarily a bad thing."
I hesitate to call it the "new normal."
This article originally appeared in the September 2010 issue.