Thursday, October 1, 2009

The New Normal

The entrance to Microsoft's Redmond campusImage via Wikipedia

With Less, Do More

The other day I read Microsoft CEO Steve Ballmer’s latest executive e-mail, entitled The New Efficiency. A few of his thoughts resonated with me, and in my opinion, have broad applicability to the market segments and business functions we serve at EthicsPoint. I’d encourage you to read all his comments, but want to highlight a few here.

Ballmer’s email starts with,

In all the talk about the economy, one term that comes up more and more frequently is something called “the new normal.” I like this phrase because it speaks to the fact that economic reality has undergone a fundamental shift over the course of the past 12 months.

So what is the nature of this shift? After years of economic expansion fueled by unrealistic rates of consumption and unsustainable levels of private debt, the global economy has reset at a lower baseline level of activity. Today, people borrow less, save more, and spend with much greater caution.


This is the new normal and it will be with us for some time to come. The issue now is how to respond.

I think Mr. Ballmer is spot on with this line of thinking – despite some encouraging signs of economic recovery, I think it’s going to take longer and be more difficult than any of us want, and even after the recovery has been achieved, the marketplace in which we all compete will be completely different than it was prior to the meltdown.

Mr. Ballmer goes on to stress the importance of cutting costs, but points out that no company ever cut their way to greatness. Rather, to ultimately succeed, you need to do two things – increase productivity and provide value to your customers – the trick is how you achieve these two objectives simultaneously. He writes:

For years, we’ve talked about how information technology enables companies to do more with less. But during this economic reset, IT provides business leaders with the answer to a slightly different question: Can my company with less, do more?

Other trends give this question even greater urgency. Workforces are more distributed and employees are more mobile. Government regulations are increasing and compliance requirements are mounting. Data security is more important to preserve and more difficult to maintain.

At EthicsPoint, we’re seeing Mr. Ballmer’s comments play out in our customer base every single day. Compliance mandates are mounting, governmental enforcement is strengthening (witness the increase in FCPA prosecutions and Corporate Integrity Agreements), rates of employee misconduct – if not increasing – are at least holding steady, and compliance, audit, HR and other budgets are being cut. The only way to effectively manage in this environment is to find ways to build efficiencies into your processes – increase the level of collaboration, communication and insight across the enterprise, while eliminating waste, and the barriers that create and maintain organizational silos.

As I’m going through our own internal 2010 budgeting and strategy-setting sessions, I’m challenging myself and my team to think about Ballmer’s question: how can we – with less, do more?

What are you doing?

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