I think it’s pretty safe to say that the world is in a state of accelerating change – and the economy doesn’t quite know how to take the latest jolt of unexpected (for most of us) stimulus – the Brexit result – certainly seems to highlight the knife edge on which our economies hang in the globalised world. My view is that Brexit will have a long-lasting and widespread effects in the world marketplace – even if there does somehow manage to be a ‘but we didn’t really mean it’ put through. The process has highlighted the power of a crafted question to wreak havoc, unseat Prime Ministers and send the world into chaos.
In this environment, it is crucial that businesses find a way to craft a new normality. One that remains steady in the face of economic unrest and that can remain profitable and reliable with any external stimulus. So how do you achieve this?
1. Scan the environment
Threats come from everywhere, not just your industry. However, this means that this is also where the opportunity lays. Make a habit of continually scanning the environment across all industries and form a view of the broader context.
2. Have robust stop losses – and act on them
Not the sexiest tip I know – but stop losses really are everything. Be clear on at what point you will change your course, have several contingencies ready so you can react to feedback, and be prepared to enact plans very quickly. When the market moves en masse you see exaggerated swings – this is when stop losses fail. You must move quickly and decisively.
3. Maintain a flexible point of view
Have clarity on your desired outcome – i.e. X amount of profit, or X amount of growth – but don’t be fixed on the course you will take to it. You must remain flexible and willing to change your methodology.
4. Keep it liquid
In environments of sudden change you may need cash quickly. Whilst it is important to get a return on your available assets, you must also have access to them if you need them. Make sure you have a good mix of liquid assets in your portfolio so that you have cash available if you need it.
5. Capitalise on change
The pace of change is accelerating. Traditional forecasting is not performing as well as it once did. The underlying assumptions of many business models no longer hold. In this environment you must build change into your business model, so that you thrive in the new reality. Find ways to leverage change, accept it in your business and build a flexible organisation and you will thrive.