By Randal A. Lemke, Ph.D.
Executive Director, InfoComm International
There is an old saying, “May you live in interesting times.” Historians have long argued whether this platitude is a blessing or a curse.
For better or for worse, we find ourselves in times that are interesting. Widely fluctuating world markets, tightening credit, dipping home rates, consumer uncertainty and shuttering retailers are keeping many of the people I talk to up at night. There is concern about hitting bottom, and if this isn’t it, how low might it be?
Unfortunately, the very uncertainty that fuels anxiety also fuels bad decision making. While we can’t make the world more predictable, InfoComm can share new economic survey data that close to 1,000 AV professionals like yourself took the time to share with us in mid-December.
One of the key goals of the January InfoComm International Economic Snapshot Survey is to determine how respondents perceive their company’s performance and overall health. Why do we work with perceptions, rather than hard numbers, like actual revenue? The truth is, in life and business, perceptions are often a better indicator of company performance than a balance sheet.
This survey employs a tool, called the InfoComm Performance Index (IPI), which assesses company performance of the past six months and expected performance over the next six months. Performance is rated on a 1-10 scale, where 10 represents ”record growth and profit“ and 1 conveys ”bankruptcy.“Our January survey shows a modest dip in the IPI over the past six months to 7.08. In September, survey respondents forecast this number to be at 7.10. Looking six months into the future, the 2009 respondents predicted an IPI of 6.46. This would put the IPI into the high end of the “fair” range.
The report is far from predicting doom and gloom. Just under 75 percent of all respondents indicated that their company is in the same or better financial health as it was six months ago. Independent design consultants predict a good financial performance in the next six months for their segment of the industry, with a predicted IPI of 7.13. Systems integrators are also hovering around the ”good“ range in their predictions, with an anticipated IPI in six months of 6.54.
Manufacturers are predicting a less stellar run for their sector. They have changed their expectations for the next six months from good to fair. Rental and Staging responders have the most negative perceptions of the next six months, with just over half of respondents predicting a fair or weak six months ahead. Upon further examination, however, we found that many of the larger Rental and Staging companies did not fill out the survey, and some integration firms with sagging rental business indentified themselves in this category.
I encourage all of you to access a full copy of this new free report at www.infocomm.org/marketresearch and draw your own conclusions on the findings.
With fluctuating moods, what is the best way to handle the pending economic uncertainty? The first thing to do is make sure that your business is great at what it does. Many of the anecdotes shared in the report indicate that repeat business from loyal customers is helping many weather this storm. If training for staff is something you were postponing until your employees were less busy, this is the time to do it. InfoComm has a large variety of classes being offered in the next several months, before, and at, the Show.
We believe so much in training and in the potential of our members, that InfoComm is going to invest thousands of training dollars in our members. For those renewing their 2009 membership at their previous rate or higher, or joining as a new member, InfoComm will double the allotment of EduBucks. For example, Silver Level Commercial Members paying in US dollars, would get double the normal amount or 1,500 EduBucks instead of 750, while Gold Commercial members will receive 3,150 EduBucks instead of 1,575, and Platinum members will get 5,200 EduBucks instead of 2,600. Similar doubling applies in other member categories and in other currencies. Also, the rules for redemption have not changed, and you may continue to use them at InfoComm, in our classroom courses, and via the Academy Online. So plan to double your training activity this year as one way to prepare for the economy ahead.
I also encourage you to remain specialized in areas that your business does best, rather than trying to be all things to all people in an attempt to capture customers. You are selling your company’s expertise – spend the effort in attracting the type of clients you can best assist. This may also be the time to take another look at, and possibly refresh, your business plan.
Certification is also an important differentiator when bidding on contracts. With a growing emphasis on improving government infrastructure, it is important that the certifications your staff holds are recognized by the government in bids. In the US, many government agencies can only count certifications that are recognized by an outside body, such as ANSI. InfoComm has devoted significant resources to ensure that the CTS and CTS-I credentials are recognized by ANSI and that architects and the building industry know to ask for the credential.
Also, be assured that InfoComm will continue to provide you with resources related to the economy. InfoComm will have a leading economist at InfoComm 09 to provide an overview of where the economy stands, along with many sessions containing practical business tips. We are planning more regional training, networking and webinars. In addition, InfoComm can provide you with a better economic assessment of the AV industry if you take time to fill out our surveys. InfoComm will have a special financial survey going out in the field in February that must be completed by company finance officers. Please encourage your designate to complete this important paperwork.
These are interesting times – but most historic periods are ripe with opportunity for those who are able to persevere. Stay in touch, and continue to share your perceptions as we navigate these challenges together.