How Bad Is It?
Nine local leaders provide a roadmap for difficult economic times ahead
(page 3 of 3)
Q: What should businesses be doing now to make sure they not only survive, but also thrive, in the longer term?
A. William Kaneko, president and chief executive officer, Hawaii Institute for Public Affairs
Under these circumstances, businesses and nonprofits should focus on their core competencies, and ensure that the basic delivery of their goods and/or services are of the highest quality. If businesses are able to provide the highest level of quality products and services with even greater customer service, they will survive and prosper now and in the long run.
A. Constance H. Lau, president and chief executive officer, Hawaiian Electric Industries Inc.
During downturns, it’s especially important to review your cost structure and make sure you continue to serve customers well so that your revenue stream remains strong. It’s time to be more conservative, and make sure you have adequate capital and liquidity to weather the downturn and to come out the other end as a stronger business. It’s also important not to be shortsighted just to make it through the downturn, but to continue to make good decisions to build your business for the long term. Key among these is continuing to hire the right talent and leadership to build your business for the future. And finally, in a downturn, it’s more important than ever to keep giving back to our communities, as they will need the help more than ever.
A. Kelvin H. Taketa, president and chief executive officer, Hawaii Community Foundation
By their very nature, nonprofits need to be resilient and their leaders adaptive to the ever-changing environment. Strategies such as diversifying revenue sources, collaborating with other organizations and sharing resources, forming and maintaining close relationships with key donors, and telling one’s story effectively may help to withstand the storm and keep them on a positive course for the future.
A. Kirk O. Belsby, vice president for endowment, Kamehameha Schools
We are not looking at particular markets or sectors, but rather at the Hawaii economy as a whole. We still see a relatively unbalanced economy that relies too heavily on military and tourism spending, but we hope to encourage corollary relationships with industries that can build on our existing ones. For example, we need to be supporting the dual use companies in the defense sector as they will bring wider commercialization opportunities. People tend to look at San Diego or San Francisco’s Silicon Valley as models for Hawaii, but only look at the last 10 to 15 years as a basis for comparison. The genesis of California’s technology success was rooted in the defense sector. However, the largest issue Hawaii faces today is addressing our basic infrastructure, including the three major areas of housing, education and transportation. All three areas are in dire condition, and while progress is being made, now is the time to redouble our efforts.
A. Donald G. Horner, president and chief executive officer, First Hawaiian Bank
Actually challenging economic times offer an excellent opportunity for business managers to become leaders. Any successful businessperson understands difficult times require proactive and often difficult decisions about resources. Business is about revenue, margin, overhead, productivity and customer service management. A slowing economy typically reduces revenues, which puts pressure on margin. However, well led businesses actually become stronger during difficult times because their leaders look for ways to expand their product lines, make strategic investments, better manage overhead, encourage and reward true innovation/productivity and view quality customer service as a strategic asset.
A. Maurice Kaya, energy consultant, former state chief technology officer and energy administrator
For many businesses the most obvious near-term strategy to deal with skyrocketing energy costs is to reduce their exposure through investments in energy efficiency. Commercial buildings can typically achieve a 30 percent reduction in electricity use by investing in more efficient lighting, air conditioning and control systems, all with attractive payback periods. If you have significant water heating loads on your premises, solar water heating systems should be investigated and installed. Onsite generation can offer significant long-term energy savings. In the future our electric utility companies should have programs to install these distributed renewable energy systems on customer sites as part of their new business lines. When retooling fleets and equipment, clearly specify the most fuel-efficient vehicle for the application.
Besides individual action, businesses collectively must become part of a large movement to demand answers to uncontrolled energy cost increases. No place else in the U.S. is as vulnerable to oil shocks as we are, and our successes can set an example for others, while generating more business for Hawaii companies in the sustainable energy market.
A. David McClain, president, University of Hawaii
It’s all about focus and efficiency and innovation. Businesses that have a good cost structure, products priced appropriately, and a sharp sense of their market will survive in the short run and thrive in the long run.
A. Sen. Colleen Hanabusa, president, Hawaii State Senate
An issue for government is anticipating these kinds of demands and sustaining us through these times. I believe the Legislature’s long-range planning for Sustainability 2050 is vital. As I have said, one way to best serve our state is to look beyond what we have today, to what we will need tomorrow.
For business as a whole, I hope that we will continue to see the kind of involvement we experienced with the Hawaii 2050 Task Force, not just in terms of government projects, but also for cross-disciplinary efforts within the business community. While competition will always continue as an economic mainstay, we also need to recognize the value of cooperation. Whether with other businesses, with government leaders, or with the community in general, communication will play a vital role in businesses’ success.
A. Douglas Chang, chair, Hawaii Tourism Authority Board of Directors
We have been through these cycles before and during down times we all manage to improve our operating efficiencies. The cost of doing business is going to continue to rise at a faster rate than our guests and consumers are willing or able to pay. To survive and flourish, we will need to leave no stone unturned as we look for ways to reduce our costs. I also believe that industries will need to rally together to ensure that all partners are healthy. We are too interdependent on each other to focus only on our own businesses.
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