Penny For Your Thoughts...

I think just about everyone would agree that the end of 2022 and the beginning of 2023 have been challenging. The market dynamics have been hard to predict. Companies have gone from the frenzy of just trying to hire people to having to think about how to streamline their business. Tech is laying off thousands of workers. Was that because they had been stockpiling talent or is it a more ominous indicator of a market slowdown?

The truth is no one really knows. There are certainly people out there attempting to chase the market and making all sorts of wild predictions. ?And, a select few will likely thread the needle just right. But, for the majority of us, we are just trying to survive.

“Don’t dwell in the past, do not dream of the future, concentrate the mind on the present moment.” – Buddha

We’ve all heard the advice of not dwelling on the past. That seems to be a universal lesson of life. And, how many times have you heard someone say “It will get better” or you tell yourself that something good is around the corner. The possibilities of the future can be compelling and something for us all to focus on when trudging through challenging times.

Additionally, how many times have we been told the sister advice to just “focus on the here and now.” I suspect we all have, especially when faced with a monumental task. At times, it seems impossible to get past the current task at hand and/or apply the advice given by others.

Typically, in the work environment, most of us tend to be focused on the future. It is natural because having a job is basically a contract on what will be delivered in the future, even if just a few minutes from now. Very few jobs are about the here and now. Even a fast food worker, who just needs to think about fulfilling the next order isn’t immune. How long does it take that worker, who seemingly has a routine set of tasks, to start to think about how many more burgers they must flip before their day is over? I think we all know the answer to that…

“The world is full of obvious things which nobody by any chance ever observes.” - Sherlock Holmes

Ok, now that we have established that the world is full of unknowns and we all are guilty on focusing, perhaps too much, on the future, it is time for the truth.

In the deal space, most of us are worried about the impacts that the economy can have on our livelihood. No one can predict how things will go or give you enough comfort that everything will be alright because it might not be or it might.

What I do know and suspect some of you also would agree with is that the last five or so years in the deal space have been nuts. Serial acquirers have been gobbling up organizations as quickly as they could, PE firms are looking to flip something while the market is hot and companies on the outside looking in are asking themselves, “Should we be getting in on this?” All the while consultants, advisors or other outside partners have had an overabundance of work and where hiring like a new gold rush was upon us.

The natural reaction, in times of uncertainty, is to STOP! Don’t spend another dime, retrench into the bunker until the bombing seems to have subsided.

I prose to do the exact opposite and “invest” vs. just “spend.” Of course, investing doesn’t mean it comes with a huge price tag.

Invest (in-vest) verb – Expend money or other capital with the expectation of achieving a profit, material result or advantage.

Spend (spend) verb – To give money as a payment for something

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Spending is a five letter word, or 8 in this case, that CFOs and CEOs cringe when they hear. In its simplest form it is about giving up resources in the hopes of getting something in return. And, as we all know and CFOs remind us, you don’t always get what you paid for.

It is not to say that the word invest goes over an easier, the ledger types are pretty keen and pick up on it. However, for me, the difference between the two is that one has an expectation of improvement while the other is more focused on the outgoing of currency or effort with some expectation of near-term benefit.

“Always remember, your focus determines your reality.” - George Lucas

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So, if we turn our focus from spending to investing the outcomes are endless. Yes, I realize it is a game of semantics. To me, investing implies improving yourself, others or an organization while either spending or investing comes at a cost. Nothing is free, typically.

So, we have already established that those CEO and CFO types likely won’t let you spend right now. But you know what gets Boards, shareholders and business line executives excited – making things better than when we started by INVESTING.

So, to recap: everyone has been very busy and many have not finished the tasks they set out to do because the market was on-fire and we all had a case of FOMO (fear of missing out). Well, now, the tables have turned and things are uncertain and our CEOs/CFOs have been a buzz kill and have turned off the spicket, we must get creative.

But, what if we use the word “invest” when pitching to the CEO, CFO, Board? Sure, some will assume money is being spent that shouldn’t be and in some cases that is true. However, money doesn’t always need to be spent to invest.

It’s my observation that many savvy organizations realize that their M&A operation has been held together by spit, gum and the shear will of professionals. All the while, these same professionals have told anyone that would listen that “This just can’t keep going on like this.” And, now here we are. It isn’t going along the same way but the problems still exist. And, they become even more apparent when you have a few minutes to reflect.

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“Never confuse motion with action.” - Ben Franklin

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So, what should be done with those idle hands, half-baked ideas and broken processes? I suggest you invest. Invest in taking stock of your current processes, tools, governance and deal rationale while you have the time. Put those deal professionals to work making things better and more efficient. Show those pesky CEOs and CFOs that a little elbow grease, while keeping an eye on the “spend,” will prepare your organization for the future.

For those with no money, do what you can with the time you have. Not all process improvement costs money outside what is already being spent. But those brain to work that show up every day.

For those that might still have some budget: use it wisely, pick areas that perhaps are beyond your team’s ability and partner with outside resources. Who, by the way, have capacity that you simply just might not have.

“If you chase two rabbits, both will escape.” - Russian proverb

This is not to say that motion equates to effectiveness. Choose wisely, focus on low-hanging fruit and things to will pay dividends down the road. The current road might be bumpy and rocky but if you don’t forge ahead you just might be stuck on that stretch of cobble longer than you need to be.

Hitch your wagon to those that have a desire to forge ahead and don’t get distracted by too many of the potholes along the way…

Until next week - Stay strong, stay focused, stay sane and stay the course…__________________________________________________________________________