Turbulence is the new normal: let’s stop adding to it
Some decades ago, a journalist asked UK Prime Minister Harold Macmillan what was the greatest challenge to his administration. His reply: ‘Events, my dear boy, events’.
The idea still holds true: leaders are beholden to events. The first half of this year again demonstrated the speed and unpredictability of global economic and political events. What’s less obvious is how their impact can linger long after the issue has faded from the headlines.
Take, for example, the strong demand for travel driven by the post-Covid rebound, whilst the sector is still grappling with staffing and resource constraints caused by the same pandemic. The war in Ukraine will have long-term implications for defence and energy—the latter especially in Europe. AI and climate change will affect every aspect of the economy and business.
So we should expect turbulence and look for ways to mitigate the turmoil. But, instead, the modern high pace of business seems to amplify it. We’ve spent decades building fast-paced, agile organisations that can respond rapidly and fiercely to competition. The availability of capital, the fluid movement of talent, and quick access to powerful tech has enabled start-ups to easily attack long-standing companies and markets. Business and consumers can find, choose, and buy new products and services with ease—and have little loyalty. External events may cause turmoil, but we’ve also normalized it.
Of course, a business leader should always be looking for new opportunities, new ways to prosper. At the same time, they need to invest in their ability to weather constant change.
➡ So how can mid-market business leaders invest in resilience?
1. Diversification and reserves. Diversity of markets, products, and staff will be more and more vital. Reserves of stock, cash, and loyalty may take years to build up, but are the bulwark against ‘events’.
2. Invest in your people and connections. A business is only as good as the people and their relationships, internally and externally. Your people need the support, energy, and skills to connect with customers and colleagues. Businesses that enjoy sustained success are constantly investing in their people.
3. Online and automation. Ensure that all your customers can interact with you online before, during, and after a sale, so a competitor can’t simply present a new experience. Also look to shed unnecessary manual work through automation, so your people can focus on what really matters—your customers.
4. Risk management. ‘Events’ are inevitable. So make it part of the company culture to list, discuss, and plan for risks and change. And don’t just let those plans gather dust—update them often, considering multiple contingencies. As Mike Tyson said, ‘Everyone has a plan until they get punched in the face’.
Anyone running a business knows that strategies are important. But strategies are useless without a resilient, flexible business. The events will keep coming—so let’s get ready for them.