Can business plan for the unknown?

“The problem with the world is that the intelligent people are full of doubts, while the stupid ones are full of confidence.” Charles Bukowski

If Bukowski had not lived in the USA and died in 1994, he might well have written this about the UK’s upcoming leap into the post Brexit unknown. After months of idiotically instructing business to stop whining and prepare for life post Brexit without providing a clue as to what that involves, Government confidence certainly smacks of stupidity.

Warnings of Kent being a lorry park/enormous toilet/grid locked with 7,000 backed up lorries go unanswered. Calamity in Kent combined with the UK Warehouse Association’s report that storage space is 3% from capacity fuel fears of the country running out of fresh fruit and vegetables; we import 62% of our fresh food according to Kantar. Never mind a significant reduction in consumer choice across the board as retailers sensibly focus on continued availability of core products. 

With around four weeks to go before this all comes crashing down on us, it is hardly surprising that intelligent people are full of doubts. Even with a bare bones deal, time to prepare for compliance is beyond miserly. And this on top of the mismanaged approach to (not) preparing for Covid-19 and (not) following a thought through, consistent plan to deal with it.

And yet.

In ‘Welcome to the 21st century: How to plan for the post-Covid future’, a wonderful piece by Tim O’Reilly written in May and brought to my attention by strategic forecasting specialists Trajectory (‘We strive for a world in which the future is better understood, better planned and less feared’), he says that if we:

..(move away) from the quest for certainty, it is possible to prepare for a wide variety of unknown futures, to imagine how you might respond, and to make plans that hold up across a range of possible outcomes.

O’Reilly’s core point is that Covid might be a catalyst that changes fundamentally and forever what comes afterwards across the world, just as the Black Death in Europe forced landlords to accept the end of serfdom by giving tenure to workers whose scarcity gave them greater value and power; just as the Second World War brought women into the workforce, a position they have never left, in turn leading to huge changes for women’s role in society at large.

For business, it is possible that the world post Covid-19 is ‘an inflection point... (in which) our marvellous, globalized, just-in-time economy has been discovered to be fragile’. (A fragility that may provide a timely smokescreen for the Government to mask the damage to come from the Brexit fiasco.)

O’Reilly counsels creating businesses that are not only flexible, agile, and focused on embracing the possibility of a very different future, but are resilient – by which he means having the space within the business model to be able to survive dramatic changes. This requires sufficient cash and time; it also means not running the business to a degree of lean ‘efficiency’ whereby anything more than a slight disruption to the process brings it down.

He casts the possibility that the ‘...comfortable “American century” of conspicuous consumer consumption, global tourism, and ever-increasing stock and home prices may be gone forever.’ It is a short mental jump from here to business embracing the imperatives for change demanded by the climate crisis, and the need to live sustainably within the resources of the planet. ‘Build back better’ applies to individual business actions as much as Government.

Air travel, and hospitality & leisure, seem obvious areas that could impact our business lives permanently post Covid. We are aware that Zoom meetings may continue to replace in person meetings for business travel, while mandatory quarantine may make short duration trips to wine producing countries unviable. But perhaps more importantly, all these sectors have a strong dependence on high levels of occupancy to drive their business model and profits. From mass market consumer restaurants and hotels, to theme parks and airlines, getting bums on seats is key. This allows low prices. Fewer people leads to higher prices to cover costs. Higher prices in turn leads to fewer people and lower revenue. This feedback loop spirals down, and with it the bottles of wine consumed in these places.

And yet.

A November update to Trajectory’s March study of UK attitudes explored which of the trends developing under Covid were likely candidates for long lasting change. Increased online shopping and working at home scored highly. The good news for leisure and hospitality is that consumers enjoy this more than anything. All the signs are that they have every intention of returning to their old ways as soon as health concerns and Government restrictions allow. According to Trajectory ‘The fundamentals are strong: post pandemic these activities will be reprioritised by consumers and many of the jobs under threat today are viable’. It remains to be seen how many existing businesses will be able to survive until post Covid or will be replaced by new entrants.

Building businesses that are imbued with competence and agility, while not needing to trade at the limit of capacity to survive (nor electing to do so through greed), seems a robust strategy to prepare for whatever the future brings. Trying to cover all eventualities is impossible, but the mindset of being ready for anything is not. When it comes to booze, Charles Bukowski seemed to have all angles covered:

“That's the problem with drinking, I thought, as I poured myself a drink. If something bad happens you drink in an attempt to forget; if something good happens you drink in order to celebrate; and if nothing happens you drink to make something happen.”

This article first appeared in Harpers.co.uk