Many business leaders are using the unwelcomed — and unfamiliar — term austerity to label as the new normal, which is intended to describe a maturing market with controlled spending habits. The belief is that the days of relying on market dynamics to fuel wild business growth are history and we need to learn to live with contained market rhythms.
I agree with a part of that statement; you shouldn’t rely on market dynamics as a sole basis for growth. That is a misplaced security blanket.
The strength of the dollar, reduced velocity of funds and the resulting spending pattern changes are shaking business confidence. Well, at least it did last year and they’re creeping into this year as well. This raises a critical leadership differentiator.
While others are looking at the past, successful leaders see a future that others don’t. Yesterday is history, today is over and tomorrow is your future. Keep your eyes fixed on where you’re heading — the future.
Many leaders don’t do that. Let me illustrate what really happens. I’m sure if I were to mention the prestigious luxury goods company Richemont — the owner of brands such as Cartier, Van Cleef & Arples, A. Lange & Sohne, Jeager-LeCoultre — at dinner tonight, I would hear, “They’re having a terrible year.”
Then someone would claim to have had a privileged information and quote rumour-fuelled statistics as evidence of his hypothesis. The conversation would end up blaming a globally depressed luxury goods market for their bad sales.
They would be right if they were talking about yesterday as those facts are out of date. They’re history. If he’d listened to Richemont’s latest quarterly earnings, he would know the company advanced 9.4 per cent to a one-year high. Demand is picking up.
Be cautious, even sceptical, about the information you’re relying on. Many well-intending (and some not so well-meaning) people are accidentally spreading confidence-busting rumours. Additionally, many, if not most, of the stories shaping corporate dialogue are six to nine months old and an incomplete pictures of reality.
There is no doubt that spending patterns have changed; businesses also need to change. Your choice is to shrink into the changed habits — the new normal — or grow from them. The new normal that we are living in requires a new boldness.
The response of most businesses has been to take the easier path: become efficiency focused and trim every bit of excessive cost you possible can. While it is important to be lean, don’t become anorexic.
When you engage everyone on efficiency exercises, cost leadership becomes the rallying flag of the business. If it’s necessary for you to do such in order to adjust to the new normal, keep your company focused on why you’re getting lean, which is to be nimble and agile enough to be bold in the new normal.
The new normal isn’t the time to shrink; it’s the time to work even harder to grow. Frankly, this your real opportunity, because what you do while others are hesitating will determine your future market position.
If you stop focusing on growth, restarting the organisation is like trying to start an engine that’s not been driven and became clogged up. You company will be just like a car when its driverless days turn into weeks and weeks turn into months. The car won’t start easily, spews noxious smokes, and is simply a physical shell of its intended power.
The new boldness is making decisions based upon where you’re heading not where you are or were, which means focus on growing from where you are. There is nothing unique about the boldness needed. The market has changed... not the boldness.
I prefer to think of it as being brave. The new normal requires more courage as you’ll be growing against market sentiments. This may sound counterintuitive, but now is your best opportunity to change the game in your favour with new products or services that will command market share. Many people are merely trying to adjust and get through, hoping one day they can go back to business as usual.
But business as usual will never return because the markets are irrevocably changed. Why not create change that moves the market in your favour, instead of waiting for and reacting to the changes as they take place?
Greet the new normal with a new boldness. A boldness that turns tomorrow’s unlimited potential into your new reality. You can be anywhere, everywhere, and anything.
The writer is a CEO coach and author of “Leadership Dubai Style”. Contact him at tsw@tommyweir.com
