While the recovery that was supposed to characterize the year wasn't as robust as expected, there were still plenty of success stories in the past 12 months to teach us a thing or two about doing business. So before we officially say goodbye to 2004, let's review the pearls of wisdom that we can take with us into the new year:

1. Superior service wins customers. So you knew this already, but this year provided some compelling examples. For instance, Apple found that a healthy 30% of customers who sought help from its retail stores' Genius Bar purchased something the same day. And Wegmans, a supermarket chain, increased revenue by some 9%—a rate of growth that far exceeds the industry average—by offering cooking demos and wine sampling in its stores. Taking the "service is key" lesson even further, many companies are learning to identify their best customers and offering them a higher level of service. And the rewards have been impressive, in the form of higher profits and skyrocketing customer retention rates.

2. Productivity investments pay off. This year we saw companies get payback from their vast investments in software and hardware infrastructure, which totaled $1.7 trillion between 1990 and 2000. After inching up about 1.5% a year in the late 1990s, productivity has soared, growing 14% a year since 2001. And companies are expected to spend even more on technology that bolsters productivity because of the availability of low-cost computing.

3. If you can't beat 'em, join 'em. Instead of going head to head with behemoths like eBay or Amazon, companies have learned to "eat off the big guys' plate," as Entrepreneur magazine puts it. For example, eBay drop-off stores and eBay software have sprouted up to serve the eBay community. Trend agency Trendwatching.com even has a name for such companies—"feeder businesses." They help the customers of runaway successes like Google better utilize the service.

4. Collaboration can speed up and improve product development. The growing popularity of product lifecycle management (PLM) software and rapid prototyping have underlined one thing: collaboration is important, specifically among the distinct segments of product development, including design, engineering, manufacturing and supply chain. It allows for a better product and a faster time to market. "The ability to take design and process knowledge and electronically capture it so that it can be shared anywhere, anytime and forever, is the tide of the future," Duane Lowenstein, Americas business development manager for Agilent's Knowledge Services Organizations, tells Industrial Equipment News. "Long gone are the days when the engineer was the only person who could design a certain RF response, or the technician who could debug the failed product."

5. Size doesn't always have to matter. This year we watched the value pricing of CAD programs and the spread of Six Sigma—once exclusively for large enterprises—to small and midsize companies. Even PLM software is attracting smaller companies. In short, size did not restrict firms when it came to taking advantage of technology and processes. In fact, companies of this size are uniquely positioned to utilize these innovations because they're oftentimes more flexible and agile. And attractive pricing has sealed the deal.

Sources:

The 5 Lessons of 2004
Michael V. Copeland
Business 2.0, December 2004
www.business2.com

Fever Pitch
Entrepreneur, December 2004
www.entrepreneur.com/article/0,4621,318038,00.html

Materials Jump Quickly From Design to Parts
Joseph Rosta
Industrial Equipment News, December 2004
www.ienonline.com

Value Pricing Now More Popular in CAD
Machine Design, October 21, 2004
www.machinedesign.com/ASP/viewSelectedArticle.asp?strArticleId=57475&strSite=MDSite&catId=0