It seems, talking to many people that we all feel the same – 2013 has just gone by in a blur. Now I know that the scientific fraternity tell us that time is linear, but with so many people thinking the same, you sometimes have to wonder!
So the question is; what have you done this year, what has your business achieved?
To many, the recessionary effects being what they were, just being here is enough – survival is still the ambition of many businesses. But for some, this will have been a great year so far, with expansion, profits, new markets and new Customers. So which one are you, and more importantly which one will you be next year in 2014?
I have held a theory for the last couple of years now, that we were never in a traditional recession at all. We if you measure the GDP shrinkage and apply the term, well yes it was a technical recession, but not one that we have ever experienced before.
If you look at the stats, the depth and length of the economic shift has been twice as long and twice as deep as the 1930’s depression. There are two reasons why we are not jumping out of buildings, or warming our hands on fires in large barrels, and they are; the Welfare State, and Quantitative Easing. But for those things, our lives may have been very different over the last three to four years.
So, I hear you ask, if we haven’t been in a recession, then what?
The answer is that we have in fact been in a RESET Economy. The reason I use the word “reset” is that it describes a state of returning to basics, reloading our rules and with the expectation of NOT returning to the place where the reset occurred. The financial rules have changed, and more importantly our attitudes and approach as individuals and consumers has broadly changed as well. So if we don’t return to the old good times, (not the good old times!) then where are we headed? The answer is uncertain. The rules have changed, but have we acknowledged the fact and what are we doing to play in the “new game?” What have you done this year to identify the new rules and plan how to use them to deliver results to your business.
I talked about the companies who have enjoyed growth and profits in the last year at the start of this article, they are the ones who have worked out the new rules, and are playing the game successfully. What is the secret of the Reset Economy, and what do we do to play the new game. And what if we don’t?
The results of not identifying the new paradigm, the revised rules and the changes needed, are written in the blood of failed corporates this year and for the past couple of years. Big names, household brands, failed and liquidated. For every household name, there are 10,000 smaller businesses who have failed or had to significantly restructure their cost base to stay alive. For every 10,000 smaller businesses, there are 100,000 businesses out there today, travelling the same old river, heading towards the waterfall – mostly oblivious to their fate.
As the pace of change accelerates our lives, you are completely forgiven for thinking that there’s not much we can do, except what we do and know how to do.
In 1993 we saw the very first launching of the commercial Internet the way we understand it today. 20 years later, and my children ask me what it was like in the t’olden times when internet didn’t exist and Wifi was an affectionate name for your wife.
The pace of change since then has been truly remarkable in human evolutionary terms. For most of us, we already feel left behind to the younger generation in the use and adaptation of technology. I was once an IBM computer engineer, and today I find it difficult to comprehend Cloud technology. And I am certainly not alone.
The good news in this small diversion from the point of this article, is that human beings do not fundamentally change in their core beliefs, their ambitions, basic needs, their hopes, aspirations, fears and desires.
In the current swiftly moving world, with the year flying past us, we as business Leaders have the ability to adapt and change to move forwards. It was Darwin that suggested that it was not the strongest or the most intelligent Species that would survive; it was the one that could continually adapt to the new that would outlive all others.
So let’s get back to the point. Our reset economy has presented us with some issues and some opportunities. Those who are unprepared, who retrench “until it all gets better” will tend to fail. Those who decide to make a new plan and reach out to the new economic options, will tend to survive and thrive.
So, can I share with you, the results of some research done nearly three years ago now, sampling the responses of the CEO’s of the most recognised and successful companies in the world? They summarised their responses to provide us with the top five things that will frame up our New Plans to take our businesses forwards.
Before I do this, you will have noted that this was done three years ago – which means that many of your competitors are already ahead of you on this road. So if you think after reading it, that you have some catching up to do, then don’t hesitate or delay in calling your Board and your Managers to action –tell them you need a new plan, and fast.
The top five things that will position your business for success with a greater probability are; (in no order)
Access to Capital – planning your finances to be able to identify the need for capital – whether that be working cash flows or investment in new facilities, plant or equipment- allows you to obtain the best rates and terms applicable by taking the less expensive capital when it is available. Capital availability ebbs and flows like a tide. You will have noticed mortgage rates reducing, loan rates coming down as risk is lowered etc. Plan the need and take the best options for capital.
Green Credentials – now I know that tree hugging and carbon credits are not something we take very seriously, but recycling, energy efficiency, showing concern for the environment, are all things that are considered by the younger generation of consumers and stakeholders. Positioning your business with a credible plan, a sincere plan and a published plan will attract those who are concerned about those aspects of the planets future. This is not just about your Customers, it’s about your Suppliers and employees as well. Like it or not we are going to be driven by the concepts of conservation and planetary protection for the decades ahead, and you need to get your company behind this quickly.
Go Global. The Reset economy has had a remarkably fast and concerning shift of economic growth from West to East. The tiger economies as we sometimes refer to them, are powering ahead in the world. They have used their wealth to buy western companies, infrastructure and financial options that will control our western economies for generations to come. Even if you are not an exporter, you will be dealing with Companies under foreign ownership, and it is those who take the time to understand the global picture that will win the business of these Tiger owned companies in the longer term.
Use of IT – using the most progressive IT can be daunting to those who lack the technical understanding. Two things apply here; firstly to embrace technology by using those who do understand it – IT suppliers and consultants who show a demonstrable link to business. Secondly, ensure there is a business benefit, clearly understood and explained to the Board that drives all of these projects. IT permeates our everyday lives in so many ways, and used properly, can reduce Company costs, provide competitive advantage and allow future expansion without the linear costs associated with extra systems and people.
Employ and retain the very best people– and I mean the very best. They are the drivers of your Company’s success, both now and certainly in the future. Hire the best, invest in their employment wellbeing and training, and ensure that they stay with the company, motivated and fully engaged. Spend some time to initiate ways of engaging and growing your people, as this will surely return to you many fold.
(Source http://www.thesecretsofceos.com)
To summarise what has been covered so far then;
We understand that this economic shift is more of a reset than a recession. Once we get to grips with this idea, we then face the uncertainty of what to do to ensure our Company not only survives, but grows and adapts to meet future Customer demand and expectations.
To do this, we need a new bold plan.
A call to arms is needed within our Businesses, a new explanation, a shift from the past and a step into the future is the only way forwards. Now is the time to take the decision to move, as standing still is an option that will lead to our demise in a given time line.
For an informal chat about what this means to you and your business, give me a call on 07711 008350, or email me at Philip@tamplc.com
Wishing you future success.