Flexibility
…or all tied up in knots
Here we are in a Covid-19 world we can’t even begin to fathom. New Zealand is free of the plague that has the rest of the world reeling and we feel pretty good about that. We are just getting on with our lives. But increasingly it begins to feel a little bit artificial.
We have wrapped ourselves in a bubble, but we are small, incredibly interdependent on the rest of the world for trade and unless the world comes right soon, life here will begin to look very different.
I don’t want to be a pessimist here. I am trying to be objective and objectively, I think we’ve got some hard thinking to do.
Let’s look at a few things going on right now -
COVID-19 pandemic worldwide
US heading towards political and social chaos
Europe in danger of destabilising
Russia stirring the pot wherever they can
China flexing muscles in ways that may make retaliation inevitable
Conspiracy theories (including Q-Anon and Christian Armageddon fans)
Climate change
World economy in tatters
I am so grateful to be in New Zealand. We have COVID under control at the moment, we have a stable government and business is ticking along. But you can’t ignore how fragile all this is.
Soon we have wage subsidies and various business supports running out. The school holidays is over so no domestic travel masking the loss of international travel. We’ve had our post-lockdown spend-up. Now it’s back to business in whatever the new normal is.
This is really the point of this piece. What is the new normal? All we can be really certain about is that it won’t be the same as the old normal. We have to adapt. But adapt to what?
If you allow me to slip into simile for a moment, try this. In a world where you are supremely confident about the future and your business’s place in it, you may adopt the stance of a weightlifter. Feet planted firmly, body perfectly balanced to take the load and manage it above your head. You know that if you get your stance exactly right, the chances are that you will succeed are exponentially higher.
In our current economic situation, you need to adopt the stance of a soccer goalie preparing to save a goal being scored against you. The dynamic is completely different. You don’t want to be planted firmly. You want to be on your toes, hyper vigilant and loose - ready to move in any direction in a split second.
Of course business is not soccer and similes only get you so far, but the point remains valid. Right now, we don’t know where the striker is going to aim the ball so we better be on our toes.
I’ve said this before but it needs repeating. You should have a plan for your business that prepares you for many different scenarios. Scenario planning is a lot more complex and creative than strategic planning because it requires you to look from now into the future and imagine several different possible environments, circumstances and responses to them.
Your business might be a lucky one and the new world will be highly beneficial to you. That cannot be predicted, so you would need to plan for either what you have now, or for expansion at a rate you haven’t anticipated. Where are you going to get the skilled staff, materials, finance needed to successfully achieve your growth?
On the other hand, you might find that your business is badly affected. In this instance you need to be planning for how to deal with the staff reductions, the possibility of closing parts of the operation, down-sizing premises, dealing with unpaid creditors and an increasingly impatient bank.
You might find that although there is no hope of operating in this environment, there is a possibility of coming back, so a hibernation strategy is required to ensure you don’t unintentionally kill the business rather than putting it to sleep for a period.
All I can say is that we are in for a hell of a rollercoaster ride and we’d better start practicing being flexible now before our options start getting cut off.
Again I say, I am not being pessimistic. I’m looking at the signs and they say BE CAREFUL loudly.
If you’d like a conversation about how to approach this flexibility thing and scenario planning, please feel free to give me a call or drop me an email.
+64 275 665 682
john.luxton@regenerationhq.co.nz