The Strategy Page - Tragedy Edition

At a glance:

1. Maui wildfires
2. Unions make their mark
3. Shifts in consumer behavior
4. By Marc Emmer for Inc:?How to Spot Tech Shifts With Staying Power
5. By?Marc?Emmer for Forbes: A Novel Solution to the Recruiting Crisis? Tap Into Older Talent
6. Podcast recommendation: Should traffic lights be abolished?

Maui wildfires

It’s sobering that our last edition, “It’s Hot Outside”, focused on the impacts of climate change. Little did we know that we would publish it days before unimaginable tragedy struck in Maui. I was in Lahaina with my family last year. Aloha is the Hawaiian word for love, affection, peace, compassion and mercy, which you see in the nature of the people who live there. It’s time for us all to rise up as Americans and help this devastated community. Our firm will be making a contribution for relief, and we encourage everyone to give in any way you can.

Relief agencies there include?Hawaii Community?Foundation,?Maui United Way, and?Salvation Army Hawaii.

Contingency planning has become more important than ever. If an entire neighborhood can be extinguished in a matter of minutes, every company needs to have a?disaster recovery plan?in the event their physical building or workers are not available for several business days. It’s also important to have reserves to bounce back from the unexpected, or to fund emergency relief for employee healthcare or personal needs.

Unions make their mark

Unions continue to expand their influence. The Teamsters negotiated a $7.50 per hour raise in a tentative agreement with UPS. United Airline pilots won nearly 40%. The United Auto Workers Union is in talks with General Motors, Ford, and Chrysler. But they will have to be careful not to overplay their cards, as many companies are weakened and already feeling the pain of higher wage costs. The strike plaguing the entertainment industry is a prime example—the Union is asking for concessions on AI at a time when studios can’t even define what AI tools will be available in the future.

As we’ve been saying for two years, it’s becoming clearer that rising direct labor costs have a long tail and will be higher into the foreseeable future. Companies need to find a way to replace labor or adjust their operating assumptions.

Shifts in consumer behavior

One reason we haven’t had a recession is that consumers are spending freely. But the steady rise of interest rates is beginning to take a toll on consumer behavior.

Summer online promotions offered by Amazon (including Prime Day), Walmart and Costco were illuminating. Online retailers reported sales increases of 6%—much lower than prior years—and shoppers paid less per item, suggesting a flight to further discounting. They also use more buy-now, pay-later options. While inflation has normalized around 3%, consumers are still feeling the effects of two years of hyperinflation.

Ecommerce will also be impacted by Yellow Freight ceasing operations. With the loss of a low-cost provider, freight costs are expected to go up.

By Marc Emmer for Inc:?How to Spot Tech Shifts With Staying Power

One day you're in, the next day you're out -- that's the reality of digital Darwinism. For instance, Elon Musk's recent rebranding of Twitter as "X," claiming it will revolutionize social media with an "everything app" approach, has captured everyone's attention.?

Read more?

By?Marc?Emmer for Forbes: A Novel Solution to the Recruiting Crisis? Tap Into Older Talent

Employers are facing a significant problem. According to the?Federal Reserve Bank, the labor participation rate of 63% and unemployment rate (below 4%) have barely budged. Even if our economy slows down, it will be some time before there are fewer jobs than people to fill them. It’s time to get creative.

Read more

Podcast recommendation: Should traffic lights be abolished?

Americans are so accustomed to the standard intersection that we rarely consider how dangerous it can be — as well as costly, time-wasting, and polluting. Is it time to embrace the lowly, lovely roundabout?

Listen to the episode

Our Strategy Experts

Marc Emmer?is President and Chief Strategist & Facilitator at Optimize Inc. He is an author, speaker and consultant recognized as a thought leader throughout North America as an expert in strategic planning.

John Morris?is a Senior Strategist & Facilitator at Optimize. He brings experience in venture capital, executive coaching, angel investing, investment banking and financial management to his strategy consulting role.

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