Major Lessons for 2009

2009 has set a “New Normal” going forward and the old economic realities of high leveraging, low interest rate and excesses in capital markets is undergoing a rapid and fundamental change. We are seeing major deleveraging in many companies, an expanding economic role for government with its aggressive fiscal and monetary stimuli to prod the economy along and pervasive uncertainties despite sporadic and occasional sprouts of unexplainable exuberances. The crisis has broad managerial implications for many businesses which upended business models but at the same time also created unexpected opportunities.



The crisis taught us about the fine balance of leveraging and business growth and that “big is not necessary good”. Bigness entails maintaining a large structure imbued with organizational and people’s complexities, which can be expensive and in times of crisis, it is not easy to toe the thin line with a top-heavy organizational structure. The crisis taught us the importance of building flexibility into a company’s strategy and to always maintain nimbleness and responsiveness. We excel by being nimble and quick and outmaneuvered competition by maintaining high level of liquidity which gives us strategic options for entering into new businesses.



The financial markets, from Wall Street to the Chinese bourses and Singapore Straits Times indexes already experienced powerful rallies over the past six months and the double-dip prospect may look remote. Even with the early week modest pullback on Wall Street, the U.S. stocks are up 60 percent since March. The 52-week range for the Straits Times index is 1,455.47-2,803.85 which is more than 100% leap of faith. Properties prices climbed and are testing new highs for per square feet prices- HDB inclusive. This “New Normal” is unpredictable and can be disruptive like climate changes which can happen in a flash.



2009 taught us to be fiscally and monetary prudent and not to live on the sugar-high influences and the “New Normal” will not be normal to us anymore.