Industry missed signs and accelerated when it should have been braking. Don't let it happen again
Remember the news of September 2008? Do you recall hearing that if something wasn't done quickly we could experience another Great Depression? Did you, like I, think something along the lines of, Where did this come from? Very few people foresaw the events of September 2008 and the Great Recession that would follow, even though there were plenty of warning signs.
In the boating industry there were plenty of indications that we - as an industry - had our foot on the accelerator when we should have been planning for a downturn. Many marine businesses closed, and many good employees lost their jobs because we did a poor job of predicting our future. Our industry-wide sales were in decline for various reasons, including the drop in real estate values that had been indirectly fueling boat sales through the use of home equity, but we kept increasing capacity and filling the pipelines.
In hindsight, there was ample warning that we should have been preparing for a downturn. Lack of foresight caused the impact of the economic downturn to be much more severe on our industry than it had to be.
So what lessons can we learn from not having foresight a couple of years ago? If we take a peek into the future, what are some of the global trends we should be considering today? There are plenty of things happening now that will impact our future - we just have to look for them.
I am going to share what I believe are some pretty significant global trends, but before I do, here's one very important caveat: The lesson from this article is not going to be from reading 10 of the trends I think are significant. I might be wrong. The real lesson is that we need to have a futuristic mindset. So I encourage you to use the trends I identify below as ideas to help prime the pump of your futuristic thinking, not as constructs to build around.
1. The age of U.S. dominance is over - We have heard the word "global" more in the last year than ever before. International finance and legal organizations are already working to unify how the world does business in a global manner. The United States is running up debt the world cannot sustain; there isn't enough money in the entire world to feed our debt appetite. We cannot support the military dominance we have enjoyed, and China and India are very quickly stepping into world leadership roles. The United States no longer has a monopoly on scientific, technological and educational information. This could have been different, but as a nation we have been making the wrong choices for a long time and continue to do so. I am as red-blooded an American as anyone, but this trend is obvious.
2. Major changes in energy - It is no secret that oil is running out. Many of our grandkids will live in a society without oil. We can choose to ignore it or let new oil field finds or technology improvements temporarily refocus us, but it is inevitable. Oil and gas prices, which are temporarily down because of the global recession, will inevitably skyrocket. The good news is that some people are working on this. Within 10 years we could have nearly 30 percent of our energy from alternative sources, but we need to be doing much more.
3. How we view the environment will change - I don't know what is changing the environment, but something is happening. A few years ago, our family took an Alaska vacation, and the changes to the environment were obvious, including rapidly melting glaciers and forests decimated by longer summers that allow tree-eating bugs to expand their feeding frenzy. One important environmental impact is going to be a significant drop (if not collapse) in global fishing as we continue on a trajectory that is reducing global fish stocks much faster than fish can repopulate. This will result in the expansion of fishing bans around the world.
4. Technology will advance much faster than we can imagine - Hold on, this will be a wild ride. Within 10 years our computers will be thousands of times faster than those of today. WiMAX technology will cover entire regions with Internet access, and holographic television will become a reality. Three- dimensional printing will eventually allow us to print our own products at home. Technology will also dramatically impact education, as more than 50 percent of our educational system goes online. We are learning more and more, and technology is helping to make learning easier. The Web allows us to build off one another's discoveries. Technology advancements are going to speed up and significantly change everything we do.
5. Demographics are rapidly changing the world as we know it - I recently heard former President Clinton on a news program talking about how the differences in birth rates between various population groups are rapidly changing the face of the world. We soon will not have a majority race in the United States. The fact that we are disproportionately educating women over men at the college level will also have a big impact. These changes are going to push a lot of people outside their comfort zones and require us all to do a better job of working and living together.
6. Virtual communities will impact us in many ways - Facebook has more than 350 million users. If it were a country, it would be one of the world's largest. Virtual communities and social media are not a fad; they are a fundamental change in the way we communicate. "Cyber friends" are quickly outnumbering real friends, and it's estimated that nearly 20 percent of marriages this year will come from an online encounter. Along with this phenomenon is the death of personal privacy. More information is now kept online, and anything that happens can be taped and uploaded to the Web in minutes.
7. Biotech advances will pleasantly surprise us - The mapping of the human genome in the last decade is opening doors to advancements in biotech that we can barely imagine. Disease cures and prevention are only the tip of the iceberg. Want to be a billionaire? Much of the world's newest wealth will come out of biotech.
8. Consumer paradigms will be different for a long time - We have entered a new phase of a savings mentality. A tremendous amount of wealth has been wiped out during the last 18 months, and people seem far less willing to forget about it. For many, the unthinkable has happened, and it will impact the way many people think - much as the Great Depression impacted our grandparents. Conspicuous consumption has been impacted. The key questions are: For how long? How will it impact our economy? And, more specifically, how will it impact those of us in the boat business?
9. How we view money is changing - Britain is phasing out the use of checks by 2018, and we are quickly moving toward a cashless society. Biometrics will play a part in this as we fight identity theft. Fractal transactions will result in the entire supply chain being paid at the time of the retail transaction. Identity theft and counterfeiting will create a sense of urgency related to these changes. As I write this, I am sitting on a plane, and a passenger near me just tried to pay for his snack with cash - no luck. The flight attendant said, "We take any type of payment but the real thing."
10. How we do business will be significantly different - Future consumers will not be willing to pay for the waste they have tolerated in the past. Employees are becoming more mobile, and many will have as many as 10 jobs by the time they are 40. We are going to have to recruit and develop them much differently. Marketing is changing in a big way as it becomes much more cost-effective to market through social than traditional media. Baby boomers will soon retire in droves, leaving a huge experience gap in our companies - particularly in leadership. Technology will change everything we do. Online discussion boards will make everything we do public.
As you can imagine, the marine industry will be significantly affected by these changes. Consumer spending paradigms will impact us as consumers become more focused on savings and conspicuous consumption becomes less important. Globalization will force us to compete against more international competitors. We will need to develop and promote a more environmentally friendly and energy efficient boating experience. We will need to find better ways to recruit, develop and retain employees.
Our customers' expectations are going to be much higher. As they experience changes in all areas of their lives, particularly technology, they will expect us to keep up. Our customers will expect us to be available on a 24/7 basis. We are going have to prepare for expanded fishing bans. All of us in the boating industry will have to be doing things differently than we do today, and that won't be easy.
We need to be constantly looking forward. Unfortunately, looking forward does not come naturally for a lot of people. They simply aren't wired that way. In fact, most people are wired to be very focused on the here and now. A natural resistance to change, combined with competency in their current endeavors, leads people to believe they already know what they need to know. That is very dangerous thinking and will eventually lead to significant problems.
As I mentioned, the trends I identify here are only to prime your thinking pump. If you read this and go away just focused on the 10 trends, you will be making a huge mistake. They are just to get us thinking. The real lesson is that we need to be constantly looking forward in an effort to prepare ourselves and our companies not only for today but for decades to come. The good news is we can take action today that will benefit us well into the future. n
Bill Yeargin is president and CEO of Correct Craft, the Orlando, Fla.-based builder of Nautique ski boats.
This article originally appeared in the April 2010 issue.