September is the month of ‘mists and mellow fruitfulness’ – an appropriate time for businesses to plan for the final quarter and the year to come. This September is not just misty but densely foggy. And there is precious little sight of the mellow fruit of economic recovery. The growth of the last two months is probably just pent up demand being fulfilled. Now that is done, now the State subsidies are stopping, now people come off furlough, the real challenges begin. How do businesses need to behave? How do leaders drive through the fog of uncertainty?
When you drive through fog you drive differently. In normal conditions, we often multi-task as we drive, thinking of that meeting coming up, listening to the radio, talking to our passengers, vaguely aware of the instrument panel and generally but not specifically aware of the current condition of the vehicle. When conditions are benign, we proceed on auto-pilot and at speed. When it’s foggy, we kick into manual control, we focus our attention and prioritise the most important actions. We progress slowly, deliberatively and focus on getting to the next place we can see in a rolling sequence of increments. We operate smoothly – no sudden movements – but always alert to the need to react very quickly. Background noise (music, chatter) goes off. We attend exclusively to the task at hand – staying on the road and avoiding any collisions. We heed the instrument panel much more than we would ordinarily – all data and information is assimilated to help navigate through the fog.
Running a business in this climate is a lot like driving in fog. There is virtually no visibility of what lies ahead. The landscape keeps changing – every increase in Covid cases throws in a new bend in the road. Businesses have to concentrate very hard and proceed slowly – not something that comes naturally. The worst thing we can do in such circumstances is to go helter-skelter in one direction, work out that doesn’t work, about turn and charge off in another direction. In this foggy environment, we need to drive slowly, consciously, thoughtfully, considerately, alertly, carefully. We proceed tactically and we prioritise only that which is vital – all other distractions go on hold. All that matters is to get to the next place we can definitely see and proceed from there. In this respect, the recent signing of the trade deal with Japan is very timely. Japan is well known for making decisions slowly and consensually. In Japan they will sacrifice speed for surety. They also define speed differently: as ‘moving slowly but in the same direction’ (think tortoise rather than hare).
Those businesses that move slowly but in the same direction, which prioritise and operate tactically whilst remaining wide awake to the possibility of reacting very fast to circumstances, will trade through this situation. Those which spread their attention across too many tasks, dilute their focus or which continue to go too fast will have a hard time of it in the coming 18 months.
In 2007, on the eve of the last cataclysmic economic depression, my clients in a large French investment bank were tearing their hair out in frustration with their highly risk averse bosses because they were closed out of deals happily being made by competitors such as, er, Lehmans. The French bank weathered the crisis without a government bailout. One of the only major banks in the world to do so. We all know what happened to the other firm. Worshipping at the altar of speed isn’t always the way to wealth. The trader mentality shouldn’t always hold sway; the slower, more deliberative, consensual, analytical, tactical style works better in recession. The watchwords for now are: prioritise and behave tactically. The fog will lift. For now, we just have to get through it without incident.