No one is ever going to accuse me of being prudent
I’ve never saved enough or made enough AVC payments and doubt that my pension will amount to a comfortable retirement.
I’m the complacent child of the lucky generation who have had comfortable retirements from final salary, index-linked pensions and who, to my mind have largely spent too much time, managing cash they didn’t actually earn.
If you aren’t over 45 or studied economics, this might not make much sense and I’m not going to get into the rights and wrongs of it.
What I can claim is a certain caution in sensing when things aren’t quite right.
We built room44 on this tendency and created a business that looks at converging and emerging trends to see where opportunities and threats lie.
Grab an emerging trend
You may have done very well out of COVID. Some companies did. In honesty, room44 didn’t. A consultancy, that works in a notional future, found it hard to gain client confidence when no-one knew if Boris was blowing hot or cold on any given day.
Happily, a couple of years beforehand we’d taken trend insight into our own hands and created a plan that resulted in us opening an electric bike business too. When one thing fell off a cliff, the other one climbed it and things balanced out.
What we did was the effect of seeing a change in a market, taking definite action and trusting our own skill and judgement.
Today, both businesses work which is why this is timely.
There’s another pinch point right around the corner
Already we know business costs are going to get a lot higher this year and into next. You may be carrying bounce-back loans as an extra debt and that nice Mr. Sunak has already told us that he’s increasing corporation tax by 6% in April 2023 – your corporation tax.
It won’t hurt immediately but it’s on the books.
Inflation is nudging 10% and we can cite any number of price increase stories – from wood to micro-chips – that far exceed 10%.
The good news is that there is more than enough time to get creative and look at new ideas to generate diverse revenues.
Your choices are to sell more, sell for more or get creative and trust your own skill and judgement.
If you want a bit of help to see where the opportunities lie, let’s talk. Book some time with me here.
Future thinking. Future proofing. It’s what we do.
At this time of year we write a content calendar that usually includes a blog timed for March saying something like, your year is 25% time gone: what has changed?
Obviously, it’s provocative. Understandably, it can get a reaction along the lines of ‘shut up, smart arse, we know’.
This year we decided it was worth writing the blog a bit earlier. As usual, predictions abound – like this decade will see more technological change that we’ve experienced in the last hundred.
No real surprises there. It was the same in the 2010s and is difficult to plan for.
But it was only a few weeks ago that the UK government announced we could have a Christmas and that they’d review things in four days’ time. Policies that last four days? That’s a new kind of normal.
In February, of course, all bets are off and the only place you ‘need’ to wear a face mask is on a bus.
In other news the UK and France aren’t really getting on (again). Inflation is soaring. Domestic energy costs are set to rise by 50% this year. Lithium is in short supply, so batteries are too, affecting almost everything. Internationally, the Ukraine is in a state of flux; Kazakhstan is worth watching; US Republicans are planning a Trump return to power while Democrats aren’t able to stop regional restructuring that might permit it.
But none of this can affect your business because it’s all a long way away and in the future.
Stuff happens every day doesn’t it?
The obvious reaction is to, well, react because that’s pragmatic. But how differently would it be if you had already anticipated the macro events that could sideswipe you?
You can forecast your future
The idea of stepping into the future and looking back is attributed to Steve Jobs (but probably not his original thought). He was right though; step into the future, look back and join the dots – when they join up, you have a route map/ plan/ strategy – whatever.
There’s always one
This concept of future thinking makes perfect sense until the sceptic in your team says, ’but you can’t predict the future’. There’s always one. It’s usually the same person who insists on forecasting everything. Forecasts and trends watching aren’t quite the same. Forecasts are guesses based on historical data and maybe you can’t predict the future; but you can keep an eye on it so it doesn’t catch you out. You can also build a plan for your possible futures.
Planning for change
The diagram below illustrates the point. Try it for yourself: print it out and do the exercise as instructed.
Now turn it through 1800 and do it backwards.
See what I mean?
Future thinking. Future proofing. It’s what we do.
If you want to talk about this, here’s my diary. Pick a time that suits you.
Right through COVID-19 lockdowns, established, proactive business has been morphing into new versions of itself. At the same time, start-ups have been making huge noise. Individuals and groups of entrepreneurs are re-starting, re-surging, re-energising and finding new ways to grab attention and grab business.
And now we have the holidays when everything stops again.
Companies who have struggled to trade, or haven’t found a new way to trade, will have to come out of their imposed exiles with the same job to do again – to restart, re-surge and re-energise.
Culture needs a strategy to feed on
The stop/start nature of many market sectors over the last couple of years has taken a toll. Clearly the logical response is to pick up where we left off as soon as possible.
Maybe, however, there’s another option.
The oft-quoted Peter Drucker is reported to have said, “Culture eats strategy for breakfast” – and it’s true.
What’s also true is that, for this to be the case, culture needs a strategy to feed on. No-one wants an empty breakfast plate – so the two things go together.
Unfortunately, with vastly reduced incomes, businesses that have been forced to stall some of their creative operations are now being asked to resurge and the inclination (for the money people at least) is to retrench, conserve, trim, cut, slim down…
When you need to push forward, the guys in suits are the people to tell you to survive. Culturally, a battle is being played out in boardrooms where a fourth or fifth COVID wave is being experienced and where, now, we’re getting used to plan for the next re-opening.
Don’t trim too much
In business, it’s hard to avoid the temptation to trim away parts of an organisation when tough times loom. Typically, training gets canned, marketing budgets are an easy target, and even sales resource comes under pressure while the suits play God.
Resist the impulse. Good sense and pragmatism are just as useful in times of trouble as they are during periods of growth.
If you’re trying to get back to a version of your normal, please take another look at your options. You may need to change more than you realise and we’re here to help.
Future thinking. Future proofing. It’s what we do – and have done since 2014.
Maybe now it’s time to think about innovation.
Pivoting to grow
Being honest, if room44 had stayed wedded to its core business at the start of 2019, we probably wouldn’t be here today. When the pandemic shut the UK economy down, we had already opened a new venture that became our growth opportunity for 2020 and 2021. Since then we’ve also added a new ‘artisanal’ product stream to our portfolio and room44 innovation consulting has resurged.
This all came about from a reading of market trends that indicated strong growth in areas that we may not have leant into without an understanding of the probable impact of world events. We were deep into the Brexit transition back in Q1 2020 so ‘change’ was inevitable. All we had to do was take it seriously.
Old business clinging on to old ways
Since Lockdown #1, many thousands of people have seen huge shifts in their work lives. Lay-offs have released people to pursue their own dreams, as well as throwing others into the grip of financial despair. One impact of this is that the UK is doing better than ever at creating new businesses and poorly at letting old ones die naturally.
In Q1 2021 Companies House recorded a record increase in new company incorporations – up by 24%. According to Fathom Consulting, the UK now hosts @4.5 million privately owned companies and more Unicorns (£1bn+ companies) than France, Germany and Sweden combined.
So, the government has made it possible for new business to start, grow and thrive with more bounceback funding, including another £1.5bn available to support start-ups* but the same financial support has also allowed businesses that were struggling to stumble on for longer. Loans, grants and furlough funds have let companies reset. The downside is that some of them should have simply stopped being.
Hope as a strategy
An article by Matthew Lynn in The Saturday Telegraph a few months back argues that old business is clogging up the very system that should help new companies grow (Recovery depends on killing Zombie companies). It’s a good point. SMEs are a tenacious bunch and won’t give up easily, but hanging on and hoping isn’t a strategy.
Building a new vision based on new market dynamics, seeing a less-than-obvious opportunity and then acting on the vision is what will help old business survive. If you have any doubt, look at the current crop of start-ups – looking at things differently is exactly what they have done.
What is innovation?
If you’re a follower of Clayton Christensen, you’ll recognise the definition of disruptive innovation as being “a process by which a product or service takes root initially in simple applications at the bottom of a market and then relentlessly moves up market, eventually displacing established competitors.”
In the context of re-imagining a business’s potential in order to survive, maybe a less ambitious definition is appropriate. How about something like – taking ideas that work in other places that we can make work here.
Business development asks you to grow your business. Innovation asks you to offer your customers something different than they can get today to satisfy a need differently, or to meet a new need entirely. This isn’t innovation in its truest sense but, if the process demands that a failing business changes what it does for the survival of the company and gives their customers something newly valuable to buy, let’s give it the benefit of the doubt.
If you’ve relied on government funding to get you through a tough patch and are worrying about how to cover the wage bill now that furlough funding is over, now is a really good time to think about a change in direction.
As the saying goes, the best time to plant a tree was twenty years ago. The next best time is today. If you’re an established business who wants to talk to an agency that has done exactly that, drop us a line.
Future thinking. Future proofing. It’s what we do.