Thoughts From Our Chairman
A helpful – if somewhat depressing – way of looking at the state of our nation’s business world is to see it as an economic winter. A period in which our processes, people and infrastructure will be tested to the limits by the forces of systemic disruption.
The double shock of the Covid-19 pandemic and Brexit uncertainty on incomes and employment, plus the general sense of gloom (labelled by economists as low consumer confidence) means that for many businesses, this ‘winter’ may turn out to be fatal. As in nature the old, the frail and the inflexible will perish. But, happily, as in nature, the young, the vibrant, the adaptive and the sheltered will survive and prosper with the arrival of spring.
Applying this analogy to present circumstances shines a light on the prospects of two very different corporate cultures. On one side are the long-established enterprises with cultures which can best be described as extrapolative – where tomorrow is an extension of today and looks pretty much like the day before. By contrast, the entrepreneurial organisation is opportunist, rather than ossified, welcoming change and drawing energy from disruption.
Take, for example, the recent collapse of Debenhams. A venerable name with a noble history dating back to 1778. For them, winter came early. The company totally failed to protect itself against the radical shift in consumer behaviour from offline to online which was evident once Amazon expanded beyond bookselling in 1998. I have no idea what went on inside the Boardroom and C-suite but doubtless they received many Management Consultants’ presentations on strategy proposing survival strategies. But, sadly, like a herd of Alpine cattle which the farmer fails to bring down to shelter before winter sets in, store after store collapsed and died until, after two futile attempts to find shelter in administration, the final death knell tolled in the run up to their traditionally busiest period and the whole business collapsed into liquidation.
Historically, large organisations were often saved at the last-minute through government intervention or a white knight saviour. With Debenhams, no-one came to the rescue as it was seen as a failing business that, like Monty Python’s dead parrot, had succumbed to the Grim Reaper.
In this economic winter, if a business finds itself trapped on top of a mountain as the temperature falls, there is no chance that someone will launch a rescue mission. And worse, as Debenham’s demise shows – no one will mourn its passing.
Enough despondency! Failure is not inevitable. Businesses – even the most habituated – aren’t trees with zero ability to adapt to external events. They are more analogous to animals with the capacity to move and to affect their environment – although for those working inside the behemoths, it is easy to believe that change is impossible! Inside even the most sclerotic business, there are people with the solutions to the existential challenges (and opportunities) facing the organisation. Surviving the winter and – whisper it out loud – prospering in the spring requires identifying those with the answers and empowering them to speak up and be heard. As that great pundit, F. E. Smith put it so powerfully – “There is nothing like the prospect of death for concentrating the mind.”
In a previous life, Inogesis CEO, Rob Kerner, was a pilot in the US Navy. A dangerous and risky job but one which makes him something of an expert on what it is like to face and tackle nerve-wracking risks. As an armchair combatant I imagined that flying a fast jet over hostile territory was the zenith of a fighter pilot’s experience. Rob put me right by pointing out that, thankfully, that was a relatively rare occurrence while landing a plane on a moving ship was an everyday experience. Think of it, to succeed, the pilot has to navigate a plane though changing weather onto a landing spot which is as small as it is mobile! A case study in having a concentrated mind!
In nature, winter is the equivalent of a battle in which only the fit survive. Businesses are in a contest for resources (customers and capital) acquiring a competitive advantage is the secret of success.
Corporate death is a decision and not a definite. But avoiding it takes quick thinking and an acceptance of risk.
In our economic winter, the survivors will be those who embrace change and adapt to it by deploying all of the resources at their disposal. Established businesses are rich in proven processes, loyal people and solid infrastructures but they mostly lack the enthusiasm to embrace change. Getting to spring will entail learning the lessons of the Navy pilot and foregoing the illusory comfort of not moving until every element of your path is aligned. Instead, those destined to survive and prosper will have the confidence to develop strategies engage with potential collaborators who are naturally less cautious and more innovative. Those collaborators aren’t to be found in the realms of Management Consultancy but rather amongst the huge and growing pool of technology-centred entrepreneurs focused on developing solutions to solve the world’s problems. Accessing them requires the liberation of an organisations’ intrepreneurs – the savvy men and women who are champing at the bit to drive change but who find that a reverence for dyed in the wool systems and processes prevent them from being heard or heeded.
Link the intrepreneurs to the entrepreneurs and the resulting release of heat and light will give the best chance of survival for any organisation vulnerable to the cold and dark of this economic winter.