TAMPA — How are business leaders changing tactics to cope with a slow-growth economy that experts call the "new normal"?
Three top executives touted different approaches Wednesday to an audience of 800 at a Fellows Forum staged by the University of Tampa business school.
Facing more tepid spending by consumers wary of high unemployment, tight credit and a stock market not expected to show much sustained growth, speakers said rewards await those who slip out of their shell to take calculated risks.
Liz Smith, the new chief executive of Outback Steakhouse parent OSI Restaurants Partners, increased her company's research spending for more menu alternatives and to learn more about customers. That's because the no-growth restaurant industry is now all about stealing market share from rivals rather than opening more stores.
"Value means more than price, or taste or food quality," said Smith, whose company also owns Bonefish Grill, Fleming's and Carrabba's. "It's become the totality of the experience. In an era of less overreaching and overbuying, everything consumers buy has to be worth it. You have to invest (in current stores) because you cannot cut your way to greatness."
Three months into her new job, she discourages any sign of staff fear to take chances. Her office sports her personal "wall of shame," filled with product ideas that flopped during a career at Kraft and Avon. She prods colleagues to diagnose what needs tweaking in discussions she calls "autopsies without blame." She keeps front and center on her desk a Kraft product she helped get to market (she won't name it) that was "a B+ rather than an A" as a reminder to aim high.
"This is not a time for a 50-page, long-range plan with 150 appendixes," she said. "It's figure-it-out-as-you-go nimble with more scenario planning like 'if this happens, then we'll do this.' "
Jonathan Baum, chairman and chief executive of Dreyfus Corp., a mutual fund family owned by Bank of New York Mellon, sees no double-dip before recovery, but a slow revival as unemployment winds down. So low interest rates will prod investors who pulled $400 billion from the market for the safety of fixed-rate securities to get back in stocks and more comfortable with more overseas investments to beat inflation. He sees the U.S. economy growing at 3 to 3.5 percent a year, the global economy growing at 4 to 5 percent.
"And stop watching short-term guys like Jim Cramer and financial news TV that dwells on bad news just to draw an audience," he said. "Focus on the prize. You won't put kids through college or build a retirement on 30 years of day trading."
A Winter Park physician and president-elect of the American Medical Association, Dr. Cecil Wilson was less concerned about pending health care reform legislation than the perils of Congress doing nothing. In 10 years, the "current mess" will cost twice as much and consume 20 percent of the U.S. economy, up from today's 16 percent.
While the doctors trade group has not fought reform as fiercely as insurance companies or partisan politicians, he declined to endorse any plan on the table.
"But we are close," he said.
Mark Albright can be reached at [email protected] or (727) 893-8252.