The Shepperd Report 4.03
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Hello, Again!

After a long silence, the Shepperd Report returns with the new Quadral Website. You can look forward to a unique perspective on global events, strategies, opinions and a straightforward approach to opportunities and solutions in the global economy. As in years past, we also address the human side of globalization. The demands of the global business exec as well as the impact and the responsibility, he, or she has to communities around the world.

To the many casual readers and to all those, who requested subscriptions, thanks for your support. Thanks for your thoughts. In many ways, a major cloud has developed over globalization, mostly through misunderstanding, and its trends for the future. No more. Now, more than ever, the ties of the global economy are keeping the bridges between peoples, nations and continents open for all.




Global Business in Troubled Times:

Iraq, war and its aftermath are in the news on a daily basis. Many companies around the world are keeping a very low profile, wondering what will happen after the war with the global economy. It has been quite a time. Really, there has been one hit after the other since September 11^th. No, the attack in New York City didn’t cause the downturn. The economy had already started to shift in the Spring of 2001. What the attack did is hit the economy with a shock that hastened the descent into our current global doldrums.

As New York slowly crawled out of the WTC aftermath, there came the threat of war last fall. That froze decisions, then came the rollout of the US military, extend further, then the war, then, the peace. How long can you hold your breath? How long can one wait for a turnaround? Are we just waiting for another slump in global business? If we wait, we might just get the result we expect.

The world has certainly changed since September 11^th. However, the global economic model remains as strong as ever. The numbers aren’t great right now, but the structure is firm and proven. Many companies have fallen into the trap they fell into in the Gulf War of 1991. The cut back. They stopped traveling. They stopped selling. Everything turned inward as they lost their eye contact with the customer. The result? What else? Sales are off and profits down. There are certain bright spots in retail and some other markets, but for the most part, it has been a tough two years for most businesses.

With this downturn, however, there is much more going on. The process of globalization is taking a very serious turn. Smaller companies, as well as some big elephants are falling on their knees. The merger market appears to be in a dark, but full swing as less profitable companies are either washed away, or gobbled up by the competition. This has also has a significant impact on cities, states and nations.

In the 1830’s, the United States was connected with canals. It brought raw materials out of the hinterland, like Ohio and brought finished goods from all over the world to remote areas of a young country. Towns sparked up overnight near locks, where boats were raised, or lowered to continue their journey. Economic development was everywhere up and down the Erie Canal in New York and the Ohio Erie Canal in Ohio. In the 1860’s however, the world changed. War broke out between the states of the United States and fast, efficient transportation was urgently needed for troop and supply movement. The train, the Iron Horse, proved the death knell. Not of just the canal boat, but the cities and economies dependant on canal commerce.

Now, global communities, like Omaha, Nebraska are popping up as major global economic centers out of very remote areas of the US, or around the world, while many familiar cities have hit very, very hard times. There is a new dynamic and regions known for their economic strength are now going to have to go back to the basics, take a new look at their cities, states and regions and see what they can do to get back in the global game. If they don’t they risk the same fate as those canal towns that withered and passed into history.

Yes it is a very difficult time in the US, in Europe, and most everywhere else. However, it is time to move. It is time to adjust to the new economic realities. It is time to rise up and make things happen again. This is actually a great time for new opportunities, new business and planning for growth on a major scale. It’s the “Counter-cyclical Plan.”

That’s right. Now is the time to work harder and do more than ever. While everyone is licking their wounds, it is time to be with the customer. Never has the engineer at the customer had more time on his, or her hands. They might even need to meet you just to look busy, so they don’t get the axe. They may need to champion a new project, or a new supplier to make a name, save costs and you may be that supplier.

I know one mid-sized client started a few years ago with supply to a major global company of just one part. Now, about 8 years later, they are the global supplier to the company in their sector. The company has grown phenomenally and all is rolling nicely for them in spite of the current climate. In fact they are picking up large chunks of business with other customers from the same sector because of their global pro-active approach. They are at the customer’s door. They are looking for new projects from the customer, proposing new projects they have developed themselves. They are always looking at the customer’s cost and how they can reduce the customer’s cost of supply. That is not the same as the supplier’s price.

Yes, it is time for companies to arise! Yes arise! Stop the worry about the war and the economy. Work counter-cyclical and your rewards will be great indeed. As for cities, states and regions looking at their economy in despair? Look closely. Look with open eyes. Many localities have simply lost their industrial base never to return. If that is the case, admit the facts. Move on. Let the great elephants of the valley role quietly in the dust. It is their time. It must be.

It must pass, so that new economic opportunity can take root. Then, grab the future. The past will pull quickly away no matter how hard you try to hold on. Work against the grain. It’s tough regardless of where you may be located in the world. However, in the long run, that effort will be the basis for major gains in the near term and be the major driver for sales and profit, when the economic strength returns to markets around the world. Cities and regions are wise to do the same, if they want true growth and prosperity for years to come.

FMS