Viewpoint — October 2008
Boom, Bubble, Bust!
Written by Bob Gershberg, Managing Partner Dick Wray Executive Search
As I pen this article the Dow has dipped below 9,900, the European credit markets are in turmoil, the Nikkei hit a 4 ½ year low and the Latin American markets are plunging led by Brazil down 15% thus far today. I suspect international credit crisis concerns have led most to anticipate a worldwide recession. Oh how I much prefer to use the expression, “fasten your seatbelts and hang on to your hats” in preparation for the rapid ascendancy of an emerging brand or the upward trajectory of a booming segment. The only good news I can offer now is that when this is all over our industry will be flush with well-capitalized companies as over- leveraged will not be an option.
Once the dust settles a bit in the world markets we will be faced with another butt whooping, a.k.a. earnings season. Do you know anyone who hasn’t cut back in corporate or personal spending over these last few weeks? Do you know anyone who bought a car or approved major company expenditures? Have you had to wait very long for a table at your favorite fine dining establishment of late? Have you discussed unwinding that team trip to attend a conference during Q-4? Third quarter comps are going to be UGLY, UGLY, UGLY!
We are well-advised to remain focused and avoid over-reacting, albeit easier said than done. Those who had best –in-class food cost control systems in place have been far better able to survive spiraling commodity costs. Those with solid leadership and a full compliment of functional managers will be far better positioned to maintain solid operations and good quality service for their customers. Those who are over-leveraged – I wish you strength, resolve and good fortune.
Preventing a global melt-down is likely beyond our control but making certain we are not the next restaurant brand to file for protection is not. In the kitchen we are fond of saying, “volume hides all sins”. As such, a good economy is quite forgiving; our current one is not! Trust me on this one folks – putting off the placement of top-notch human capital is not a prudent strategy. In the business world as in the sports world the best teams always find a way to win!
All the best,
Bob Gershberg |Managing Partner|
bob.gershberg@dickwray.com
(888) 875-9993 ext 102
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