Retirement

ColumnWhy crises are not fair

Lars Vollmer
Lars VollmerAndré Bakker

I went for a swim in the ocean this morning – it’s one of the best things you can do in Barcelona on the hot, humid August days. Many locals traditionally leave the city this month. The host of tourists who usually replace them will not be here this year. For reasons. So it’s unusually quiet and pleasant in town.

The shops open anyway, at least those that still open. The crisis in Spain can be felt in every corner.

All the more I noticed something while walking to the sea …

Everything must Go!

On this way I pass a restaurant where I often and gladly eat the Menú del dia – a lunch that is as cheap as it is tasty. At this early hour, the restaurant is usually visited by many groups of senior citizens from the neighborhood, who sip a coffee and one or two liqueurs here.

These older people prefer to sit inside in the pub, because it’s so cozy there and the acoustics make conversations easier. But they haven’t done that since Corona. Spanish seniors are also very careful not to enter interior rooms where other people are as seldom as possible.

But the restaurant has reacted to this development: every morning the employees carry half of the furnishings out of the restaurant to the large square in front of it. Instead of the usual maybe five tables, there are now 20 or more. And not only that: Large green plants and floor lamps, for example, also wander outside with you. The latter are not connected – why should they, after all, it’s bright as day – but the objects create the atmosphere that these visitors love so much.

And I can tell you: It’s jam-packed.

The few tables in the neighboring café, which are outside as they were before the crisis, are completely orphaned.

The cake problem

Sure, that’s a pretty mundane example of a mini-innovation – but even such a mini-innovation can be enough to knock out the competition. It has never been easier than today.

I would also like to find out with you why that is. If you look around, you will notice: Many markets are fallow, dead pants. But when something is offered that is special, when an offer seems to offer a real substantial advantage – no matter how small it may be – then the customers grab it.

In most companies there is currently no money problem. As also, financing costs have never been so low, delays in bankruptcy so legally close to legitimation and the banks’ accounting options for bad loans so diverse. But of course the companies set very clear priorities for what they spend money on. In other words: When in doubt, companies prefer to keep their money on the high edge. They want to invest and buy, just not everything they bought before. They only grab the offers that they believe will really help them and set them apart from the competition.

As a result of these reduced investments, the pie in many sectors has become significantly smaller than it was before the crisis. That per se intensifies competition. What makes the situation really difficult for many companies: This shrunken cake is not simply distributed in the same pieces as before – that is, “fairly” – the pieces of cake are not just getting smaller. No, because the remaining cake is suddenly only shared by one or two providers. And those who have just succeeded in an innovation.

That may not apply to all industries. However, it certainly applies to those in whom efficiency is not the most important criterion, but in whom function, quality or the good solution count. This includes, for example, mechanical engineering or software systems. Here, the innovative companies often make a significantly better cut than they did before the crisis, while the rest of them have a bitter disadvantage.

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