I’m convinced we are in a high risk, high volatility era that will last out this decade. The South China Sea tension could turn into a hot-war at any time. The Chinese Communist Party (CCP) has promised to “re-unify” Taiwan before the parties 100th birthday (July 2021). The USA is also in an unprecedented period of financial, social and political volatility. A perfect storm is building.
The 2020’s is going to be a wild ride. Risk is manifesting as social anxiety. Action is one way to address this. So I wanted to share some observations from the last few months.
I’ve seen people voting with their wallets. Using thrift, buying local or trying new suppliers. Downscaling, downsizing are real and effective strategies. Thrift is actually one of the fastest growing Google trends in the last 3 months. Frugality is an art that dies during the good times and is reborn every crisis.
I’ve been getting a better deal on primary business operational expenses (OpEx). Our data hosting at Saasu.com, the data feeds we get and apps we pay for to name a few. Shopping around makes a difference.
I’ve spoken to multiple businesses who have been open with their staff about their financial situation. All have reported the positive response in those cases. Openness can remove fear and anxiety.
Relatives, Michelle and David, who work for large corporates, sourced screens and setup their home office at their own expense. They didn’t want to hassle the companies they work for to solve that headache. They pro-actively discussed the crisis early with like minded people in business. Your network can give you lead time when economic, health or other problems are arising in life. I really admired their attitude that it was a decision point for people to either play victim or just get on with it. They set an influencing example for our wider family.
Staff at one trade related business anticipated that the business they work for may go into a stressful time and took it on themselves to help promote the business in their personal social media accounts. #rockstars. The people that run that business are notably very positive personalities and great communicators. That’s the takeaway beyond this.
Close friends Simon and Alisa went into aggressive risk mitigation very early with their businesses and investments. Securing term property leases, doing a financial medical, planning for key person risk scenarios, restructuring debt and cash, deploying sales initiatives, adjusting product mix and a lot more. They are seasoned players though with vast business experience so it was more akin to watching a masterclass in crisis management. The point is they didn’t stuff around. As Douglas Macarthur said “Have a good plan, execute it violently, and do it today.”
Some people noticeably dropped non-essential activities to reduce stress. For example pulling out of a school P&C for some time. It may seem selfish but sometimes you need to survive and get your own house in order so that you can help others. The analogy is that parents should take the oxygen mask first on a plane and then put on their child.
Some business people I know have a stoical demeanour in their decision making. They clearly have thought more logically and scientifically and less emotionally during these times.
Going minimalist has helped me and also our business. I’ve seen others embrace minimalism online. What better time to embrace a philosophy of consuming less. Reducing the burden of “stuff”. You are freeing your mind by having less objects and obligations to worry over. This creates clarity and presence.
Personally I was impressed seeing people prepare by buying supplies early. Leaving aside the toilet paper crisis, which was crazy, taking action for your family to have more than the weeks groceries is hard to brand as sinful. Many did that and in fact if more people did that before the crisis hit as a prepping lifestyle then it would have been far less of an issue during the crisis. Logically, and by definition, preppers wouldn’t have been the ones clearing the shelves, they stockpile supplies before a crisis is known. Empowerment, insurance, and future price proofing are benefits they get. Venezuela taught the world that lesson. I actually saw shows like TheProject as being the fuel for the panic despite their virtue signalling that they were the saviours.
Live financials are very helpful in tough times. Through our own service queue at Saasu.com we anecdotally saw small business owners being very proactive in getting financials up to date. Both to facilitate their understanding of their financial position but also in case they need good data for ATO claims or Bank borrowing requests. Checking and cleaning up your credit history is a good idea also.
Shrinking down is a strategy I have discussed with many people in business. It seems to be almost everyones Plan C. If things get bad you have to wind back to skeleton staff to keep the business alive. That may seem ruthless but it is better to have the business survive and be in a position to rehire than for it to go under and the financial and emotional trauma that goes with that.
Whether you agree or disagree with the severity of the measures the government is forcing on people I felt deeper respect for businesses taking it seriously. It’s logical to save lives with low costs behavioural changes in my local cafe as an example. I actually changed coffee shops during the crisis because mine wasn’t taking it seriously. There were big hygene issues and others noticed it also. The new cafe I go to is following the rules, are showing people their options and being upbeat and positive in the crisis. That’s what their community is expecting in my observation.
There is a shift now in some industries to an understanding that the Movie Production model may be better. Bringing people together for a specific project and disbanding when done. Previously some project based businesses could get away with running an ongoing OpEx business model where you essentially have to fund OpEx in the gaps between contracts or projects but for some industries going forward that won’t work.
That said, sometimes you need to know when to call it, when your industry, niche or business model is so altered that hanging in for a recovery is an emotional mistake rather than taking the logical decision to exit and minimise the damage. I have seen this and it is often one of the hardest but smartest moves because it is about a logical decision winning over an emotional one.
Some go into hibernation. I’ve seen some retail businesses close their doors to do a refurb. Clever. Others use retail as pickup points for new ecommerce businesses. Nice differentiation advantage to have pickup choices so their customers can save on freight versus pure e-commerce who can’t offer that.
In other cases it was better to completely close than to try and sustain a tiny revenue flow with high cost of sales and operational costs behind that. So it has proven to be harmful to tough it out in some cases. The trick is to outlast and not give up. Then re-emerge from the ashes when the fire has passed.
Motivation has been very difficult for people generally. Many, many people embraced home workouts including my own kids doing P.E. with Joe.
Working from home for many people was difficult but after a period of adjustment and office setup I noticed peoples opinions to actually liking it. Some of us are very much people personalities and it doesn’t and won’t ever work. I think this one is very personal.
I will be the first to admit that when I heard some corporates like Lion Nathan being hit by a Cyberattack (coincidently a very big Barley buyer) I had some natural anxiety for someone in my position. Endorphins from coffee in bad time can lead to anxiety rather than joy. I diverted a bit of time onto security and I cut my coffee back for a few days. I think it helped.
Not everything above is ground breaking or insightful, I understand that. I didn’t want to presume anything though so I just listed it out so people could take from the mezza plate what they liked.
Photo by Ben White