DOING BUSINESS IN A VOLATILE, LOW GROWTH WORLD
Here are the notes — slightly edited — based on my impromptu speech on Effective strategic thinking and planning for a Volatile, Uncertain, Complex and Ambiguous (VUCA) environment. Sharing in case it helps other corporates and entrepreneurs to better navigate this challenging but ever so exciting world of business we live in.
The conference (in Johannesburg) was organised by the wonderful Dudu Msomi, founder of Busara Leadership Partners (www.BusaraLeadershippartners.co.za)
Good morning everyone and welcome.
If some of my jokes fall flat this morning please forgive me. I am Swiss and a little known fact about Switzerland is that at birth they surgically remove your sense of humour.
We live in really exciting times. If you are an SME volatility — financial, psychological and emotional — is essentially part of your DNA, be it by your nature or by acquired taste. If you are a large corporate the future is a little scarier. Either way, the volatile, uncertain, complex and ambiguous business environment in which we find ourselves is scary.
A large part of this scary space is because of the strange weather we are in… Many different boats of all shapes and sizes and built for different purposes — from the little vessels that are our entrepreneurs to the big oil tankers and cruise liners that are our large corporates — … but the weather is weird. It is like being on rough seas with the ups and downs that big waves bring about (think business cycles), yet there appears to be no wind — or a wind that seems to be going in all directions. Investors — with a few notable long term investments mandates — seem to be chasing the latest winds, be they bitcoin, big data or the snapchats of this world until the next better wind comes along.
If we stick to the naval analogy — and you’ll have to forgive me for I am a simpleton — then how does one navigate this seemingly unnavigable ocean of opportunities if there is no predictable wind?
I don’t know better. I can’t speak for all of you. What I can speak is purely based on subjective observations through my travels and interactions with a lot of players across the world and sectors. Here are my top 7 strategy and planning tips for navigating a world of VUCA for all you sailors and sailorettes out there:
- Don’t fall in love with your vessels. Fall in love with your destination (meaning — the business model is your vessel, the problem you want to solve is your destination). Change vessel often, sometime it will even require you to come back to port, seemingly making a big step back.
- Bring a couple of different types of sails and engines with you — maybe a small motor for the days when it is completely still or you are about to hit the rocks of cashflow. Build a small revenue part that can save the day when all else fails. Make sure you have some good sails on board to take advantage of different winds. You don’t need to build a 200m Yacht sail — start cultivating intra-preneurship in your organisations.
- Be nimble in your administrative elements. Have systems (bookkeeping, invoicing, support, etc) in place that can accommodate different directions so that the switching costs are a short outburst of exercise like when you see sailors change sail direction.
- Careful of building a too multifunctional vessel. It is oh so tempting to build a monster of a ship that can handle everything you throw at it — but these vessels are expensive and investments are harder and harder to come by. In some cases it might be better to build a fleet — but make sure you know the difference between a captain of a vessel and an admiral who is in charge of the bigger picture. Building small boats in today’s age has become even easier as the cost of building a small business from scratch has come down substantially.
- Focus on making money. Ideally something along the concept of responsible profits. Making money means you know if you are daydreaming or have something real. Making money also focus you on listening to your customers. There are a few exceptions such as when companies need to reach a certain critical mass to become successful, but as a generalisation it works.
- Have a meaning that goes beyond your day to day business. After the holocaust research showed that those individuals with a meaning had a higher chance of survival. What is the meaning of your business? Not the marketing slogan and it can’t be shareholder return… Be the Christopher Columbus of this day and age but not just of new lands but of seeing things differently. As Proust said, the journey of discovery is not just in seeking new lands but in seeking with new eyes. Maybe your new market is right in front of your eyes. Are your eyes open?
- And finally, how many of you are in relationship? Remember when you started the relationship and you actually listened to each other and were interested in learning from each other? It is time to start a new relationship with Miss VUCA and listen to her and what she tells you… with a little luck you will have a long and prosperous relationship with her and have many wonderful economic children