Best predictions are that the UK economy will contract by 35% this quarter but bounce back (perhaps we should call it Boom Back) to plus 30% in the following quarter. That positive shock is just as hard for organisations to handle as the negative one - think of the impact on supply chains, labour demand, infrastructure use, retail demand, capital and cash flow requirements etc. The bounce back looks like being as short and as sharp as the crash we have experienced. An extreme impact black swan in the other direction. And one you KNOW is coming.
The expectation is that after the bounce back there will be a resettlement of the economy to a new stasis with a smaller GDP on a global scale. I will return to this new stasis shortly.
But first a note on the decisions facing us now. The greatest threat to your organisation right now is in choosing the 'hunker down' option. This may appear counter-intuitive. But in hunkering down (ie reduce costs as much as possible, try to get by with the trickle of business you sustain, scale back ambition and initiatives, return to basics, halt investment in the new etc etc... you've been in those meetings) you make your organisation more fragile to the next shock just as the second black swan looms. You will not be prepared for the shock of the upturn.
The net result is you are choosing to be a victim of the first crash, taking all of the hit with no levers available to you to take advantage of the bounce back. Lose-Lose when you could have at least come out evens with a Lose-Win response.
Returning now to the new, post Boom-Back stasis, the new normal if you will.
I wrote recently about The Second Order Consequences of COVID-19, which I urge you also to consider in your preparations for life after the Boom-Back. In it I start to unpack the disruption that will follow.
To those I would like to add a handful more:
1. Digital magicians have had their day. The mystery of digital is rapidly dissipating as even the most Luddite leader is forced to learn how to DIY digital, to maintain any semblance of control over their business and people. The thing they thought they needed an 'expert' for, they have (and not through choice) found they really don't. This means:
2. Digital Transformation will have to go well beyond the tools and training. Everyone and their aged mother now 'gets' digital. The dads are discovering they can dance at this wedding and they don't care who is watching. So digital transformation must now be more about business models not simply the roll out of Teams. That stuff was always IT. Digital is new ways of working and new ways of doing business.
3. High Street Honeymoon: Pop-up shops. This will be a short term boom. The High Streets will be rammed for while but fall back to a-bit-less-than-now shortly after. So, pop-up shops and everything that supports that will explode. Expect markets to get a new lease of life.
4. Value your people people: The first meeting may be the only one in a travel-budget constrained world. Those who are excellent at building rapport will be at an advantage in rapidly building relationships that can continue online.
I want to build on these now to identify the a broader impact on the skills we value in business and the ambitions we have for organisations. The most important may be an end to the idolising of growth.
Grow Or Die, is dead.
The double black swan shock we are going through, followed by the new globally reduced GDP in the mid-term at least, offers us the opportunity to ask what success now looks like.
Are you a successful nation, company, individual or leader if you earn less this year than last?
We are going to have to get comfortable with answering Yes to that question. At the heart of this challenge is the Grow Or Die mythology.
Today we understand that myth is leading us toward environmental collapse. Grow And Die.
Success in a world of less is more aligned to human happiness. After all, our economy was never meant to simply generate a GDP figure. What should it be for? Perhaps to deliver happiness.
Doughnut Economics offers us some clues: "The framework was proposed to regard the performance of an economy by the extent to which the needs of people are met without overshooting Earth's ecological ceiling." In this model the job of the economy is to generate a safe and just space for humanity to thrive.
If that is the job of the economy (rather than to deliver growing GDP) then what is the job of a business or organisation within that economy?
These questions lead me towards the triple-bottom-line thinking captured in the Planet Experience frameworks I have been developing - and an increasing demand for ecologically sound business and products.
In Planet Experience we have a way of being successful without costing the earth, without taking more than we need, and in line with the needs of humanity.
Being successful in 2021 will be all about how well you adapt to thrive within the constraints of a clearly constrained environment.
Empathy is now a key survival skill where ruthlessness was once lauded. Co-operation and collaboration are back.
And that, already, makes me happy.
Photo by Larm Rmah on Unsplash
No comments:
Post a Comment