It is time to CHOOSE – Blizzard, Winter, or Ice Age

A few days ago, I was in a Zoom meeting (part of my ‘new normal’ with many virtual meetings per day) being hosted by Tyler Dickerhoof (if you don’t know him, get Linked In asap!) when another caller, Ryan Oletzke (another good connection to make) shared the insight, “… we could be in a blizzard, winter, or new Ice Age.”

As part of Tyler’s Transformation Roundtable discussion, it did exactly as expected in a good ‘roundtable’ or ‘mastermind group.’ It triggered an avalanche of valuable sharing and cross-pollination. Bingo! ROI on my time investment spiked to 1000%.

After the call I did what we all do. I googled it! It appears that O’Shaughnessy Asset Management gets credit for coining the analogy. But the even more important question is, “What will you do with it?” As my mentor, John Maxwell says, “Experience is NOT the best teacher. EVALUATED experience IS the best teacher.” The key is to stop, think and learn from experience so you can use it see clearer, understand deeper and act sooner… and smartly!

WHAT IS THE NEW NORMAL?

For weeks now we have been enduring a brutal blizzard of information and misinformation that is almost certainly a statistical aberration. The fear and chaos induced by the “news” being shouted about the pandemic implies a “certainty” that a new Ice Age is upon us. We can end up a victim-by-accident if we aren’t a capable thinker acting as a thought leader within the moving-square-meter where we exert the most influence. To quote Maxwell again, “Leadership is influence. Nothing more, nothing less!”

Because I was an accountant before becoming an engineer and now an author-speaker-entrepreneur, I did what I always do – apply the math to assess the probability of what the “New Normal” will be, determine the options and then try to choose the best path forward.

If it will help you, here is the simplified version of my PIR (Probability, Impact, Response) analysis.

Option 1 = Blizzard: Probability = 15%. Impact = Inconvenience. Response = Resist the urge to become a prepper, practice social distancing and use the ‘free time’ to invest in me and develop my intellectual property.

Option 2 = Winter: Probability = 70%. Impact = Compulsory, unavoidable realignment. Response = Start pragmatic innovation planning and testing of my business (and personal) operating model to extend and expand the ways I create value for clients (and my family and friends).

Option 3 = Ice Age: Probability = 15%. Impact = Fundamental disruption the “old normal” of economic survival. Response = Resist the urge to panic. Use the market-altering disruptions induced during the last 3 decades by new technology and FAANG (Facebook, Apple, Amazon, Netflix & Google) FinTech companies as case study data to chart a path forward.

WHAT TO EXPECT

The current situation requires the recognition that whatever ‘traditional methods’ you’ve been using to guide your business or career decision making over the year, they are less useful than you believe and their value may fall precipitously or even become inverted as we go through this pandemic, but vertigo is avoidable.

Blizzard (15% probability)

To paraphrase Tyler’s insight during the Transformation Roundtable meeting, “Ideas are great, but WHO is EXECUTING them is the difference maker.” To survive the volatility and uncertainty of a blizzard you must have a plan, execute the plan with focus and discipline, and apply a step-by-step process to continue forward progress. More than ever, taking the time to think through the METRICS you will use to guide your decision making is a critical success factor.

Metrics to assess what supplies we have (cash on hand). Metrics for how will we monitor, conserve and extend their availability and value. Examine your metrics so they don’t accidentally induce dizziness and fatigue.

Winter (70% probability)

Alternately, surviving a winter, which is by definition a period sustained low progress and constrained opportunity, requires maintaining viability until springtime (a recovery) opens the door to achieve new heights for growth. Winter is hard and can be painful, but it is always followed by spring and summer which becomes a time of great opportunity for those who reach the other side prepared and equipped to leverage it vigorously.

Having agility with your self-imposed cost structures and making discretionary investments of time and energy in the equities of professional growth and intellectual property, will produce the biggest long-term returns, by far. 

Two keys to leveraging winter are, first, conserving cash in hand because it is like having a warm fire during winter. It keeps you calm and focused, so secure that fire. But don’t go overboard. You don’t need years of cash on hand. You do need immediate discipline with the cash you do have, and a plan to increase it whenever possible. Second, realize the biggest errors occur as a consequence of improperly managed ‘behavioral patterns.’ To quote my mentor John again, “When you’re in the frame, you can’t see the FRAME.” Investing in a properly-vetted roundtable or mastermind group can return one-thousand-fold by preventing unforced-errors which can be induced in periods of uncertainty like now.

Ice Age (15% probability)

An Ice Age – like the Great Depression – is horribly hard but opportunity still exists. During the 1918 Spanish flu pandemic retail was crashing but business was up in drug stores and mattresses, for example. (huh? go figure!?!)

Scary times induce herd mentality amongst investors and consumer behavior driven by crazed psychology impact the fundamentals of expected outcomes. That means data, metrics, and process are critical. Intelligent choices made under the Blizzard-scenario and Winter-scenario contribute the data and baseline metrics to help you build a plan with expectations that are realistic and durable, not fragile.

WHAT TO DO

We all know, the cheaper you can buy blue chip stocks the better. Convert your time into revenue and build that warm fire if you can. When you can’t invest in the ‘integrated equity’ of your expertise and intellectual property. Realize that as the ‘market value’ of your time or services falls, meaning your calendar is not full of paid engagements, the ‘cheaper’ it is to acquire stock in you, to invest in you!

As much as the Covid Craziness is a distraction and potential threat, it has created a relative-investment-opportunity that may match the cheap stocks that followed the dot-com bubble-crash in 2001. (Have you ever wished you bought your now favorite stock back then?) You didn’t buy then, but that doesn’t mean you can’t invest now!

Using that analogy as a simple model to quantify your strategies could help you identify huge future earning opportunities. Consider how cheap your time, right now, may be versus your own history. Then consider how valuable every time investment made in you will certainly be, relative to the large growth potential of the next market up-cycle, if you keep your eye on the prize.

Metrics and trendline thinking are critically important parts of your process and relate directly to how the quality-of-YOU-factor can be defined as stock-in-trade. Can you recognize this as, perhaps, a historic opportunity?

Like you, I have don’t know when the blizzard or winter (a combined 85% probability) will end. But my reading of the data suggests the market will award the highest returns to investors focused on quality and increasing their market-value.

Externally a state of global fear and uncertainty is the new normal. And because an ice age is possible – though highly improbable, in my view – you need to decide what “hedges” you feel are sensible. I am keeping normal cash on hand because I believe in warm fires. But I am clearly focused on how to cross the chasm, create amazing new value for my clients, and re-emerge in the spring prepared to make huge gains.

As my friend, John Maxwell says, “Never underestimate the power of compounding consistency.” I am an accountant turned engineer so I am an optimistic skeptic or a skeptical optimist. I believe you and I can both cultivate a determination and resilience that overcomes epidemic models of thinking that suggest an unavoidable – and un-survivable – ice age. Instead we can form or join a transformation roundtable or mastermind group…and TOGETHER we can reach beyond success to SIGNIFICANCE!

Please let me know what you think or feel. And by all means, share your insights too!

Your friend, and hopefully trusted advisor,

John