Let’s talk about the state of preparedness in your business and review a few known unknowns of the past 20 years or so.
Hurricane Ian wreaked destruction across Florida in September 2022, after first delivering a historic storm surge that wiped out the southwest Florida barrier islands of Sanibel and Fort Myers Beach. The storm maintained its hurricane strength while crossing the state, unloading two feet of rain in a matter of hours. Upon reaching the east coast the storm reorganized before coming ashore again between Charleston and Myrtle Beach, South Carolina.
The storm was indeed intense, but the type of damage it caused was predictable. The real unknowns were where and when it would hit exact communities. In the navigation of ships and aircraft, a one-degree shift can translate to arriving at landfall dozens or even hundreds of miles off course. The same is true for predicting the path of a hurricane.
Hurricane-strength winds are a known risk at certain times of the year. Hurricane surge is a known risk along coastal and low-lying areas. Surge, to the uninitiated, is the literal wall of water that builds as a storm comes ashore over the shallow depths leading to the coastline. It’s generally understood that one can hunker down and seek shelter from the wind but not from a surge.
I previously wrote that the disruption of the COVID pandemic was not entirely a surprise. Experts foresaw the possibility of such a virus, and government agencies around the world had many contingency plans in place. However, at critical decision points, the plans were not fully enacted.
Each of the conditions above wreaked havoc on businesses. In the case of Hurricane Ian, the damage was largely contained to the storm’s ultimate path. The pandemic proved much more far-reaching. Many companies did not have sufficient cash reserves to weather disruptions in sales and supply chains. As taught on day one in business school, the number one reason companies go bankrupt is that they run out of cash.
Examples of insufficient preparedness
First, in the aftermath of 9/11, experts self-diagnosed a collective lack of imagination in understanding how terrorism could be inflicted in the United States by determined adversaries. Acts of terror were not new to the world at the time of 9/11; they had not taken place on our shores. Our government was still not sufficiently prepared.
Secondly, despite record economic growth over the last twenty-plus years, turbulence has also been with us. The financial collapse of 2007-2008 was a knowable outcome of predatory lending practices and subsequent arbitrage of financial instruments. Several “winners“ shorted the markets, knowing that a collapse was imminent. Their rational assessment outweighed the emotional urges of others to continue along for the ride.
The FY24 defense budget will be approximately $800 billion when the President’s request arrives on Capitol Hill in February 2023. Where in that budget will there be opportunities for your company? Are your communications with your primary customers strong enough for you to reasonably predict pending investments vs. cuts?
For smaller companies overly reliant on the SBIR / STTR funding path, will you again be surprised when changes to the program are introduced? Oh, you missed that in the much-hailed extension of SBIR / STTR authorities, did you? Make no mistake; there will be changes that tighten down the program.
In conclusion, are you prepared for the shift in the workforce that will come? Labor markets are elastic. Today’s difficulty in filling positions with qualified people will quickly become a retention challenge for some and an over-capacity problem for others. Where will your company fall out?Are you prepared for the shift in the workforce that will come? Labor markets are elastic. Today's difficulty in filling positions with qualified people will quickly become a retention challenge for some and an over-capacity problem for others.… Click To Tweet
Putting contingencies in place requires degrees of forethought, intellectual rigor, and imagination. How much time do you spend considering known unknowns? In his book, The Road Less Stupid, Keith Cunningham describes the need for leaders to dedicate time to thinking. He actually calls it Thinking Time.
You might think you do not have time for such contemplation but think of the alternatives to any of the conditions above. Did any of them impact your business? So, see if you can make some predictions about the coming fiscal year. I appreciate that we have just begun FY 23, but if you are not preparing for FY24 now—you are way behind.
My predictions for the coming calendar year
- An energy crisis will draw the United States into an offensive posture with Russia, including some level of boots on the ground in and around Ukraine.
- Semi-conductor chip capacity will be disrupted in Taiwan, whose chip manufacturers supply half of the global market.
- I previously predicted LinkedIn would split into two platforms, one focused on business and the other continuing to allow less business-oriented posts. I continue to believe LinkedIn will find a way to strengthen the business elements of its platform. Sales Navigator is an outgrowth where a subscription fee is a filter—well worth it from my perspective.
- Trade associations will begin to merge. My writings on lemming-like trade show attendance are consistent. There are too many shows without sufficient differentiation. Associations need the shows as their principal source of revenue. Too often, they are gatherings of middle managers who lack decision authority within their companies. Therefore, defense trade shows, where uniformed soldiers, sailors, and airmen are bussed in, highlight the disfunction of the trade show mentality.
- President Biden will not run for re-election in 2024, nor will former President Trump. We will see a dramatic challenge for the nomination in each party, the likes we have not seen in recent times.
I’ll ask again, how prepared are you? What are you doing to prepare those around you in your business? What are your predictions?