Learing to Love Recessions – Deciding What to Cut and What to Keep

No matter what label you put on the current state of the economy, companies are looking for ideas to help their business cope with reduced sales and challenging capital markets.

As we publish this blog, the number one Google sponsored link for the search term “recession” is a link to a Book of Revelation based forecast for the end of the world. This is sobering, but so misguided. Recessions can be difficult, stressful, and they can lead to the “end times” for some companies. But companies who thrive in tough times do so by “loving” recessions as an opportunity to position them selves for accelerated growth as the economy rebounds. Time and time again, companies who have increased shareholder value spring to leadership positions during recessions, differentiating themselves from survivors by thriving in new market conditions.

• Flexibility – Their management teams strive for balance sheet and operational flexibility, spend cash strategically but aggressively on acquisitions, and improve their processes to position them to absorb acquisitions more efficiently. Enabling process improvement may require some tough decisions about retiring and replacing (or, integrating) legacy systems using service oriented architectures and mash up tools.

• Talent – Innovative leaders realize that in difficult economic times, good people can be easier to recruit and use recessions as an opportunity to upgrade their talent pool, performing assessments of their existing teams and making important decisions about staff capability and cost.

• Innovation – Importantly, they also use techniques such as open innovation, gathering valuable customer data from social networks and other sources. Successful companies innovate to create product and service diversify into adjacent markets and new geographies.

• Invest in what is measurable – They shift marketing dollars online to more measurable techniques to reach customers and develop sales leads such as eMarketing / mail, analytics, eNewsletters, webinars, streaming video combined with other methods for measurement, etc.

• They balance innovation and strategic projects with disciplines such as IT portfolio management, which help them decide what to keep – or invest in – and what to cut. This creates opportunities and tensions within corporate boardrooms and line management. Innovation can create real value, but portfolio management may if not used properly kill innovation as companies seek to address short-term cash or profit and loss challenges. Companies who cut too deeply loose capability they need as the market improves.

• Some companies emerge from a recession stronger and more highly valued than they were before the economy took an unpleasant turn for the worst.

By making strategic choices that sometimes defy conventional wisdom, they increase their stock market valuations relative to those of their former peers and thus gain more power to shape their industries.

Michael F. Arrigo

Michael is Managing Partner & CEO of No World Borders, a leading healthcare management and IT consulting firm. He serves as an expert witness in Federal and State Court and was recently ruled as an expert by a 9th Circuit Federal Judge. He serves as a patent expert witness on intellectual property disputes, both as a Technical Expert and a Damages expert. His vision for the firm is to continue acquisition of skills and technology that support the intersection of clinical data and administrative health data where the eligibility for medically necessary care is determined. He leads a team that provides litigation consulting as well as advisory regarding medical coding, medical billing, medical bill review and HIPAA Privacy and Security best practices for healthcare clients, Meaningful Use of Electronic Health Records. He advises legal teams as an expert witness in HIPAA Privacy and Security, medical coding and billing and usual and customary cost of care, the Affordable Care Act and benefits enrollment, white collar crime, False Claims Act, Anti-Kickback, Stark Law, physician compensation, Insurance bad faith, payor-provider disputes, ERISA plan-third-party administrator disputes, third-party liability, and the Medicare Secondary Payer Act (MSPA) MMSEA Section 111 reporting. He uses these skills in disputes regarding the valuation of pharmaceuticals and drug costs and in the review and audit of pain management and opioid prescribers under state Standards and the Controlled Substances Act. He consults to venture capital and private equity firms on mHealth, Cloud Computing in Healthcare, and Software as a Service. He advises ERISA self-insured employers on cost of care and regulations. Arrigo was recently retained by the U.S. Department of Justice (DOJ) regarding a significant false claims act investigation. He has provided opinions on over $1 billion in health care claims and due diligence on over $8 billion in healthcare mergers and acquisitions. Education: UC Irvine - Economics and Computer Science, University of Southern California - Business, studies at Stanford Medical School - Biomedical Informatics, studies at Harvard Medical School - Bioethics. Trained in over 10 medical specialties in medical billing and coding. Trained by U.S. Patent and Trademark Office (USPTO) and PTAB Judges on patent statutes, rules and case law (as a non-attorney to better advise clients on Technical and Damages aspects of patent construction and claims). Mr. Arrigo has been interviewed quoted in the Wall Street Journal, New York Times, and National Public Radio, Fortune, KNX 1070 Radio, Kaiser Health News, NBC Television News, The Capitol Forum and other media outlets. See https://www.noworldborders.com/news/ and https://www.noworldborders.com/clients/ for more about the company.

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