In 2009, the tradeshow industry took a pretty steep nosedive. No matter who you spoke with, everyone felt the pain of the water being let out of the pool. The simple truth was that practically every company in the industry was hurt by this economic downfall.
History repeats itself in business. The first step of corporate America during any downturn is to shift the marketing budget authority from marketing to finance. When no one is buying, it doesn’t make a lot of sense to spend money you don’t have on marketing. Our industry was no different as CFOs moved in quickly to cut show budgets, and everything rolled down from there. A lot of people lost their jobs, and many companies shrank up to 30 percent in revenue. The tendency in a downturn is for a company to simply cut, wait and hope it will be over soon. The fact is waiting and hoping is not a strategy.
Recently, I heard an interview on CNBC with Howard Schultz, chairman, president and CEO, Starbucks. He observed that the markets had just corrected about 3 percent in a few weeks after a market slip. Part of the market slip had to do with struggling retailers during the holidays. Many consumers moved from going to the malls to do their holiday shopping to buying more online. This shift hurt big retailers like Best Buy badly.
Schultz made a very important point about Starbucks, which is not subject to the impact of online shopping the way other retailers, like Best Buy, have been.
“You cannot duplicate the Starbucks experience online. You simply can’t get a Starbucks latte on the Web,” said Schultz.
Therefore, the international coffee chain announced great numbers after the holidays, and their stock was up on a very down period.
What Starbucks and so many others who are succeeding during the downturn understand is that you have to have the right combination to create a unique experience like no one else. Typically, this requires that your company makes innovative investments. This can be a difficult decision if your company has not been positioned to take possible risks.
Momentum Management, like so many others in our industry, took smart steps to sure up cash and hunker down in 2009. Once the budget was set, Randy Bott, president and CEO, Momentum Management, looked for ways to invest in the future.
The key to innovation is that you have to do something before everyone else does it. You have to look where the market is underserved, and find a way to offer better value. It’s the mix of simplicity and complexity into new valued products that work together to achieve this goal.
The innovation for Momentum was to invest in new thinking, new technology and new programs. New training has unleashed our people to deliver truly unique results, different from what has traditionally been done in the I&D space. Partnership is key to our strategy. Very few companies can be great at everything. The key to adapting to a smarter business model is to find partners who don’t do what you want to do, and do what you don’t want to do better than anyone else. This synergy creates the opportunity to safely innovate by focusing on what you do best and partnering out everything else.
During the 1990s, Cisco took on its biggest competitors (Lucent and Nortel) in its industry. However, it won by building an “Ecosystem” of thousands of partners who wrote software, did installations and supported customers buying Cisco products. Cisco was innovative and customer focused, allowing focus to be on making the best Internetworking equipment in the world. Today, like Starbucks, Cisco stands practically alone in the Internetworking space.
Last week, the stock market was down; this week, who knows? What is clear is that each of the companies serving the tradeshow industry must find ways to adapt to the current and near term reality. The fact is we can’t sit around waiting and hoping for a change. Our industry requires innovation to succeed. The ability to innovate uniquely will be the secret to moving out of the downturn better than before it started.