As we leave 2018, it seems that uncertainty rules, and not just in this country. But there are actions you can take despite this.
It has been suggested that small and medium-sized businesses (SMEs) have no control over national and global events and so are at the mercy of outside forces. But this assumes that SMEs can’t adjust their strategies to allow for global changes, which simply isn’t true.
Whilst SMEs aren’t huge oil tankers who can ride out any storm, they are agile, and if prewarned, can at least turn their bows into the next big wave. This is where we come in – attempting to make sense of global changes so that SMEs can reduce risk or even take opportunities.
Our meetings and discussions at the recent Global Peter Drucker Forum in Vienna and the International Entrepreneurship Forum in Nancy raised interesting views on geopolitical changes worth considering.
Rise of fascism
Donald Trump is not alone: there are other “strong men” leaders appealing to the rise in disaffected middle-class and working-class voters who want to go back to an easier, simpler life. We all know we can’t go back, but populist policies produce this type of leader who promises change by creating walls, both real and imagined, developing a sense of them and us, pushing ‘them’ out, and driving an older misogyny as part of their personal agendas. Apart from the US and Russia, we can add the Philippines, Brazil, China to some extent, and more locally Poland and Hungary into what is rapidly becoming the new fascism.
Break down of old social compacts
Last century production-line style economics led to big businesses balanced by big unions, where employment was steady and interspersed with small periods of unemployment. Now the compact for social stability between big business and government is breaking down as people are living longer and are more mobile with longer periods between work. This makes it difficult for governments to maintain the fabric of society through social insurance (unemployment benefits, pensions etc.) as there is less funding through the implied self-insured element of the state. As workforces becomes more fluid, they more often decide what work they’ll do and how much they want to work – we all become Millenials!
This also has implications on how urbanisation creates gentrification with subsequent rising house prices creating a more mobile renting class. The previous mortgage laden generation were limited in their employment choices to those employers within commuting range. More renters have greater employment choices, and in exercising them damage the state’s ability to fund social programmes.
Implications for SMEs
Given these factors, we have come up with three actions and considerations for you to think about.
1. Think carefully before doing business with “hostile” states
Given the growing discontent in some states and their ‘them and us’ attitude to outsiders, it would be wise to consider whether these are markets where an SME would want to put a lot of effort and resource.
2. Listen to your colleagues and invite their input
We must try harder to keep our people, as we know. But how? What do people want? Clearly, given the rise of the strong men, we have learned people want first and foremost to be heard, their opinions valued and acted upon. As the old hierarchical Taylor based business models of the last century don’t work, then breaking down these barriers gives your colleagues opportunities to be heard.
3. Empower your customer facing colleagues
Big business still makes us feel like hostages rather than customers. The law of the customer is the law of people – your people. To quote Vineet Nayar, former CEO of HCL in India “If you want to truly create a unique customer experience, start with creating a unique employee experience, employee first, customer second.” Because differentiated value exists at the interface between employee and customer and is created by the employee, so empower whoever has customer facing work.