Unless you've been on Mars in the last month, or you're a troglodyte, you may have noticed that the whole world has been going through a major financial crisis. (If you haven't noticed, then remember you heard it here first.) People are, rightly or wrongly, worried about their livelihoods and their futures.
We're hearing a lot of gloom and doom. This is normal in a period of economic uncertainty, but I think we also have to keep things in perspective. One way to do this is to focus on fundamentals and ensure we have sound plans and flexible strategies and tactics to meet personal, professional, social and business objectives.
When I was in the military, we used to say that a plan is only good until you cross the line of departure. That expression encapsulates the recognition that things go wrong, no matter how well they are planned. In the current period of economic turmoil, governments, companies, organizations, and individuals will be increasingly confronted with rapid change, risks and uncertainty. This will create havoc with preconceived notions and rigid plans. The watchwords are therefore flexibility, adaptiveness, leadership, resiliency, and robustness.
A natural response is to hunker down and adopt a defensive posture, to wait for better times to come back. Instead, we need to make plans and organize our lives so that we get beyond mere survival and thrive. We must avoid sticking our heads in the sand and prepare for various contingencies while staying on the lookout for opportunities and positive changes. It can take a lot of courage and determination to do so, but that is what good leaders do during times of turmoil and crisis.
It's gloomy now and it may get better or worse. I don't know and no one else does. But remember this. Movies and radio really took off as industries during the Great Depression. There were also major advances in aeronautical technology, automotive technology, and many of the household goods we associate with the booming 1950s, such as washing machines and refrigerators, were actually invented in the 20s and 30s and their respective industries took off during the Depression. The social and economic turmoil also led to the creation of social programs that we now take for granted and which make the lives of millions better every day. This was because of political leaders who were prepared to take calculated and prudent risks. In some cases, they had to lead everyone else in taking very bold ones, people such as Roosevelt.
No matter what, people will continue to need basic services such as transportation, health care, education, and food distribution. They will seek new forms of entertainment and recreation. They will continue to learn and to develop as people, to read books, and to travel. Individuals and companies will also seek new forms of security, new investments, and new challenges. Quantum computing, communications technologies, robotics, artificial intelligence, genomics, environmental science, to name but a few, will probably have a massive impact on economies and societies. Businesses will be created in the process of what Joseph Schumpeter termed the "creative destruction" of capitalism.
Through all of this, it can be of help to focus on three basic principles. First, we need to focus on our strengths. Second, we need to be ready to reinforce success and to jump on opportunities because they may appear very quickly and be somewhat ephemeral. Third, we need to create products, services and modes of organization that are in tune with the times.
As an example, we need only look at the financial industry. Everything is in turmoil, but the banks here in Canada are in a relatively good position. They appear to be well capitalized, primarily as a result of more prudent and conservative policies and regulations. That's a strength, because the world, not just Canada, will need strong lending institutions in the months and years to come to underwrite investment in business and infrastructure. Moreover, there are quite possibly interesting assets available that would have been prohibitively expensive only a few months ago. We only have to look at AIG in the U.S., which has many solid underlying businesses, despite its capital problems at the corporate level. The risks are there, but so are the opportunities.
Manulife Financial has been touted as a potential buyer in that market. Which leads me to the next point. Manulife has been advertising its guaranteed income products in recent weeks. Amongst other things, they have taken out full-page ads in magazines and newspapers. Why? Because they are offering a product that is clearly in tune with the times. Are they taking risks? I'm sure they are. But what is the alternative, to retrench and wait for the turmoil to cease? Will it? Will things be better in a year or worse?
I can't really say if these are good moves or not, but at least it shows a willingness to lean into the wind and to take calculated risks that build on strengths, leverage unique opportunities, and are in tune with the times.Back to newsletters