Any discussion around the current business climate inevitably seems to end with agreement that “this is just a cycle and business should start to recover in the next ……..” But is it?
The “when” trading conditions are expected to recover depends on how positive is the mindset of the person to whom you are speaking and varies between the latter half of 2009 and the end of 2010. And so a lot of businesses are battling along and basing their future plans on an expected return to the “good economic times” we experienced before the Global Financial Crisis – or GFC.
But is that really what is going to happen? Are things going to get back to the halcyon early years of this decade? Can we realistically expect that this is just the bottom or somewhere near the bottom of the trough and we will soon be moving out of it and back into much better times? We are not so sure that is automatically the case.
Increasingly, knowledgeable commentators are suggesting that the world has changed – and changed forever! They are suggesting that there is now a new world economic order and to quote one group from the McKinsey Global Institute “the turmoil was not merely another turn in the business cycle but a restructuring of the global economic order …. the overall picture is of a restructured landscape. It does not seem there will be any going back to the pre-crisis world.”
Three other writers Heifetz, Grashow and Linsky in their article “Leadership in a (Permanent) Crisis” seem to agree.
“It would be profoundly reassuring to view the current economic crisis as simply another spell that we need to get through. Unfortunately, to-day’s mix of urgency, high stakes and uncertainty will continue as the norm even after the recession ends. The immediate crisis merely sets the stage for a sustained or even permanent crisis of serious and unfamiliar challenges.”
But are we fooling ourselves? Are we really sure that things will revert to how they were before the GFC? Or should we be looking at our businesses and assessing how we can best make them thrive in a changed set of circumstances?
The authors suggest that there are two phases – the emergency phase in which the job is to stabilise the situation and buy time and then the adaptive phase when we tackle the underlying causes of the crisis and build the capacity to thrive in the new reality.
So do you know where your business sits currently? Do you have a clear idea of how your industry is likely to play itself out in the future? Where is your business now - still in the emergency phase and buying time or needing to adapt to the new reality? To what extent are you confronted with a set of radically different circumstances? How do you need to re-invent your business to cater for and thrive in the new reality?
And is the past now no longer any sort of guide as to the future whatsoever? These are just some of the questions which we need to be asking ourselves.
As business owners and leaders, our job is to try to balance the need of the business to adapt and adopt new practices and processes to meet the new reality of the market – whilst simultaneously finding ways to help our people cope with the uncertainty and change. How do we re-invent the business to mirror the changed circumstances and yet still create some sort of environment which gives people the structure and stability that they need?
How do we re-invent our business? Particularly when we are so close to it – and often cannot see the wood for the trees. Without doubt, these are the answers which we are going to have to find and find quickly if we are to ensure that our businesses are placed on those future paths that will give them the greatest likelihood of success – in a world significantly different to the one we have got used to. And those businesses which can unravel their strategic thinking, which can understand how markets have changed and those which can then make and execute dynamic and effective marketing plans – will be the ones that thrive in the new reality!!
Tags: adapt to the new reality, balance, challenges, changed set of circumstances, current business climate, dynamic marketing plans, effective marketing plans, future plans, good economic times, mindset, new world economic order, permanent crisis, recover, restructured landscape, stability, structure, trading conditions
