Thoughts on the Year That Was — and the One Ahead
The past few years haven’t been the easiest for area businesses, thanks to a recession that spared few. And any forecast for 2013 is clouded somewhat by the so-called fiscal cliff that, at press time, had not been resolved. In many ways, the region’s economic picture is improving, yet a number of industries — from healthcare to education to technology — are changing so rapidly that it’s difficult to predict what the future will bring. On the following pages, 10 area business leaders share their outlook for 2013 — and what others in their fields must do to effectively compete in an uncertain marketplace.
Cautious Steps Forward
Robert Gilbert Jr., President and CEO, Dowd Insurance
Economic outlooks are difficult at best to forecast. Even weather forecasters can’t always get it right for the next two days, let alone next year. However, there are strategies and signs that help enable the planning process.
Depending on the outcome of the federal fiscal cliff, businesses will pay higher taxes. The Commonwealth of Massachusetts has already announced at least a $500 million shortfall in meeting expenses. If you depend on the state for grants and financial support, you may see cutbacks. In addition, unless the state freezes the unemployment-insurance rates, we will see a 25% increase. Fortunately, technology business is growing, and state officials and employers are teaming together with the Mass. Advanced Manufacturing Collaborative to attract new industry.
In Western Mass., there are signs of change. The Massachusetts Green High Performance Computing Center in Holyoke has attracted the interest of investors. Trucking companies are starting to ship and distribute more product. And we see activity surrounding casinos.
Next year promises to bring some change. But it will undoubtedly be more of the same with small, steady progress.
Educating a New America
Carol Leary, President, Bay Path College
Ever since the Great Recession of 2008, personal-finance pressures, shifting demographics, and even learning itself have impacted higher education. There is a New America, ever-changing, challenging us as educators to respond to our increasingly diverse student populations and their needs.
Without a doubt, the economic slowdown has affected the ability to pay for an education. As a result, we find that some prospective students are delaying their education or seeking alternative ways to earn a degree. This is most strikingly evident in the rise of adult students who are looking for the work-life-education balance — needing and requiring a delivery form of education that adjusts to the realities of their world.
Our faculty members are also finding the use of technology continues to grow and is a powerful force in teaching. It is defining the classroom of today on campus, online, 24/7, and 365 days a year. I think of it as learning on demand.
All of these factors combined force us to question and have very positive conversations — at all levels — on how we can more effectively and efficiently educate students for the 21st-century economy.
New Frontiers in Healthcare
Hank Porten, President, Holyoke Medical Center
As we look ahead to the coming year, our country, and particularly the healthcare field, continues to face an uncertain and troubling economic climate. This year we will move forward with the implementation of the federal Affordable Care Act, and with that, the face of healthcare will continue to evolve. Many predict that the cost of implementing such a system will exceed projected amounts, and that additional burdens will be placed on doctors, hospitals, and taxpayers. These burdens will come in the form of further payment reductions, and our struggling system cannot continue to absorb these cuts.
But not all the news is discouraging. With healthcare reform, we will see an electronic patient medical record where providers will have access instantly to the information they need to provide quality care. The patient-centered medical home model will transform primary care and close the communication gaps in service delivery, avoid duplication of services, and help people to be more proactive in their own care.
As our healthcare system continues to change, there is one thing you will always be able to count on. Holyoke Medical Center’s mission will never change, and we will always be there for the community that we serve.
Tough Love for Social Media
Meghan Lynch, President and CEO,
Six-Point Creative Works
I found that this was the year of having heart-to-hearts with companies and nonprofit organizations about social media, and learning how to separate hype from opportunity.
Obviously, any opportunity to save marketing dollars or find new customers in a very competitive economic environment is seductive. That said, findings in the 2012 IBM CEO Study reflect many of the sentiments we have heard business owners and marketing executives express: few use social media themselves, which makes them “uncomfortably reliant on the counsel of less-experienced Generation Y advisors.”
This discomfort shows itself especially when company leadership begins to ask ‘so-what’ questions’ when they receive reports from staff or social-media specialists on likes and retweets. Our company has seen more requests than ever this year to develop social-media/web strategy plans that help executives get a handle on why they are using social media. It is no longer being seen as a mysterious magic bullet. There is much more skepticism.
Overall, this skepticism will prove useful for companies investing in social media in 2013. Customers and prospects are seeing more marketing clutter in social media than ever before, so they will vote with their feet and become more discerning about the brands that they interact with in that environment. The brands that are providing true value will be rewarded. The companies that are using social media as a bully pulpit will be ignored.
It will be up to skeptical leadership teams to demand meaningful results from social-media efforts in order to keep their brand in the first camp.
Joe Marois, President, Marois Construction
I think this was, at best, a break-even year, and under the circumstances, that’s not bad, given the fact that there wasn’t a lot of work, and the bidders for projects grew to 15, 16, sometimes 20 — and some of the bids are so low, you wonder how they’re even doing the work.
Looking forward, it’s hard to tell right now what will happen. After an election, there’s typically a slowdown in December through the first of the year because of the holidays, so it’s hard to determine what 2013 will be like. The indicators right now suggest it won’t be much different, due to the fact that we may be looking at tax increases, and incentives for companies to grow and expand and spend money on equipment probably aren’t going to happen.
People are still being cautious. There’s so much uncertainty — unlike any other time since I’ve been in business.
A Time of Risk — and Opportunity
Jason Mark, Co-founder and Creative Lead, Gravity Switch
It’s been an interesting few years, and I love interesting times!
Change presents great risks, but also great opportunities. Companies circled their wagons for as long as they can, cutting costs and watching expenses, but they’ve taken that as far as they can and are looking at growth again, which is good news for companies that can help them do that.
We saw this trend of investing in web, marketing, and lead generation begin near the end of the downturn with national clients of ours, and it’s now in full swing in Western Mass. I expect this trend to continue through 2013, regardless of market conditions, as smart companies have already gotten as lean as they can and now need to be looking at growth (at the expense of competitors) to sustain their profit margins.
By delivering more value than traditional marketing companies, digital agencies such as Gravity Switch have benefited more than others by these changes. Should the economy start to grow, I expect to continue to see many clients looking for help with branding, foundation building, and two- to three-year growth plans. If the economy takes another downward turn, we expect desperate companies and organizations to come to us for lead-generation and conversion help. Either way, companies will continue to convert to a ‘digital-first’ marketing strategy and shift budget away from traditional methods (such as print) to new methods (Google AdWords, SEO/SEM, and digital PR).
Overall, 2011 and 2012 have been great years for us, and we’ve been able to grow while still being selective about which sales leads we pursue, and whom we work with.
Our biggest problem continues to be hiring. While we got a large influx of tech workers over the past few years during the downturn, many of them weren’t up to our standards. This is a 20-year national trend in our industry, and based on President Obama’s latest statements, I don’t expect an influx of qualified, knowledgable workers any time soon, regardless of the economy.
Beyond Government Funding
Kirk Smith, President and CEO,YMCA of Greater Springfield
As the economic climate continues to change, the YMCA of Greater Springfield has adapted its business model to become less dependent on government support, which unfortunately has experienced significant decline in recent years.
With that decline comes the need for greater support from other sectors of the community. We now rely more heavily on our community partners in the private sector to support that increasing need. Thankfully, our partners have a good understanding of the impact that our work is having on youth, teens, families, and seniors throughout our region, and have chosen to support us in a way that has allowed us to grow, despite the challenges of the economy.
From a business perspective, we have learned to leverage our earned revenue to produce greater results in our fund-raising. By focusing on increasing membership, we not only increase revenues, but we also grow our donor base.
In short, our success from a business perspective starts and ends with building relationships. Cultivating and maintaining relationships with our members and community partners is what has sustained us for over 160 years and will continue to do so for many years ahead.
Buying Local Boosts the Economy
Greg Desrosiers, vice president, Hadley Printing Co.
The strength of our local economy is only as strong as those who decide to support it. Western Mass. is a community that, for the most part, understands this philosophy. We understand that we can remain strong only by supporting local business. It has been proven in studies that local dollars spent within local communities help keep more dollars in circulation in that community and thus have a more positive impact on our local economy.
People who live and work here, and who are invested here, want Western Mass. to remain as vitally strong as possible. We are a company that invests most of our time, energy, and resources into servicing Western Mass. We believe that our success is based on the success of Western Mass. No doubt, there are challenges in running a business in this difficult economic climate which force small to medium-sized companies like ours to be creative in order to remain viable; however, we are continually grateful for the consumer or buyer who consciously decides to use their purchasing power to strengthen the local economy by supporting local companies like ours in their own backyard.
There are many challenges that face local small business in 2013, from potential new tax codes to increasing insurance costs to competitive pressures from companies that are not invested here but want a piece of the pie. Nobody can speak louder than a consumer. Purchase power speaks volumes. So the next time you are making that purchase of any product or service, at whatever value, choose wisely and support local business. If we all do our part, we will create a vibrant community that benefits us all.
Still More Caution Signs
Mark Cress, Attorney, Bulkley Richardson
We have seen some uptick in commercial-loan financing and refinancing activity as a result of historically low interest rates, but we expect that businesses will generally continue to be cautious in 2013, based upon uncertainties concerning efforts to address deficit reduction and their impact on business and personal taxes.
Standing Out in a Downturn
Derek Allard, Founder, Tunnel 7
I work in the technology/marketing sector, and 2012 has been a good year for me. I suppose I’m in a good position, as I have a nice mix of local, national, and even international clients to pull from, and I think that has helped Tunnel 7 to weather a down economy.
In a down economy, I think making your business stand out is more important. In my work, there are thousands of companies that can build a website, but there are very few that can take it that next level and help the business actually succeed online. These differentiators are more important now and should be stressed more.
In 2013, I’m hopeful that the fiscal cliff can be avoided and the economy can continue to grow, which will mean good things for my clients and my business as well.