Be The Voice And Vision In A New Global World
George Minakakis
Founder- CEO @ Inception Retail Group | Sr. Executive/Board Advisor | Keynote Speaker | Defining The AI In Retail | Author
This weeks quote: "The only thing worse than being blind is having sight but no vision." Helen Keller
First the market, as it continues its rollercoaster ride lower
Major investing firms expect the S&P 500 to dive anywhere from 3,400-3,000 and supposedly a few say it will hit 4,800 by year end. The message hasn't changed from several weeks ago. Investors are getting nervous. This weeks "fear and greed index " is at 11, that represents extreme fear by investors. Some suggest that it is best to ignore investments when markets are like this. That's a fair statement if you are a Billionaire, but not as easy for those saving for retirement. Most financial institutions invest other peoples money to make fees, of course the last thing they want you to do is take your money out. Central banks need to be mindful they have to stop inflation not to destroy the economy, retirement savings, consumers and businesses in the process. With that we leave this summary with a quote from 1929. "There may be a recession in stock prices, but not anything in the nature of a crash."- Irving Fisher, leading U.S. economist,?New York Times, Sept. 5, 1929. The market crashed on October 24th 1929.
Are prices out of control?
If you ask Target, Ross Stores, or Walmart they will tell you that the costs related to conducting business are out of control. Even with all their buying power they are spending billions to buy and bring product to stores at a price consumers can afford. And they ate those higher costs. However, it's not likely to stay that way for long. It can't unless companies like this want to play good Samaritan and are willing to continue to eat higher costs. The reality is that investors will keep punishing if they do as their stock prices plummeted over 20%. Are prices out of control? Yes! And as retailers begin to pass these cost forward to consumers that will be felt in a much bigger way than it has already been felt. This is an interesting read from CNBC and these are likely behaviours that are happening in most developed countries. However in a nutshell yes prices are out of control and I for one believe it is opportunistic greed. Read my article in the new issue of Retailer Insider Magazine "At the helm of inflation, supply chains and greed." This is an issue economist and politicians are ignoring. Because of that there is no doubt that in the coming months consumers will be retrenching and signs of a recession could be upon us.
Social: Impact of inflation on society
Unless you were born wealthy you will be socially, emotionally and psychologically impacted by the current economy. The Globe and Mail has an interesting article and real world down to earth impact on workers and businesses. If I were a politician I would be worried not about the price of oil or gasoline which is not in my control. I would be worried about how to sustain businesses from failing and jobs from being lost.
Unpredictable marketplace for business
Business leaders everywhere are scratching their heads wondering what their next move should be. It is easy to be paralyzed by this moment in time. Why? Let's look at it this way in the 1970's where inflation was very much out of control and we faced Stagflation. It was different. How? News was shared at the speed of turtles, competitive updates from publicly traded competitors was even slower to reach the masses and their immediate small to mid sized competitors did what they had to and adjusted their pricing. No one was worried about being accused of price gouging. It was easy to see that if gasoline cost a lot more, everything else was going to as well. But the situation back then wasn't easier to navigate and perhaps even less so than today because business was very local and personalized. No digital proliferation existed, it was local newspapers, flyers and TV or radio ads. By the way as you begin to rethink your strategies to stay in business local marketing experiences are important. What does a business do in a climate like this one? Many will throw in the towel and say it is too complicated. That's the glass half empty or half full syndrome. Certainly, pricing strategies are tricky, who wants to be the first mover with higher prices and alienate their customers pushing them to competitors?
The best competitive activity during inflationary and recessionary times is to go back to your grass roots, create the experience, make it look and feel local and personalized. Communicate it digitally and tell your story. And above all keep coming back with something new from your messaging to your products and services. Believe me waiting for your competitors to act first could be too late.
Retailers are rewriting their playbooks
Strategies today can live and die in a day or in the next play. Listening to the CEO of Target take responsibility for this last quarters results was a demonstration of personal leadership. However you only get one "Mea Culpa" in this industry. He wasn't alone in their performance. Bath and Body Works was in the same place. However, that same place is the higher cost of doing business. You don't get a second chance with even higher costs and lower profits in the next quarter. So what are the options? The low hanging fruit is to correct course on your cost structure and begin to increase prices and get your product mix right because consumers did shift from goods back to services coming out of the pandemic ( or should I say assumed slowdown of the pandemic). The higher fruit is about becoming more aggressive in the marketplace. We've covered this discussion off a few months ago. I was anticipating that this moment would come and I hope that you are prepared. This next session towards rewriting your playbook is about taking share in the market. Raising prices will put off some customers, you will as most provide loss leaders or house brands to help your customers and maintain your margins. However the truth be said not everyone will be loyal at times where prices are higher. So the next move in the playbook is to be very aggressive about driving new traffic into your locations. The tactics will be abundant and the fight will be very corrective. By that I mean that it will hurt and there will be business casualties. It does not have to be that way! Experience in a number of economic corrections offers evidence that these situations are not about waiting out the storm.
Business bankruptcies are up
It may not matter to most but business failures do have an economic impact. The question over the last twelve months has been where are all the bankruptcies? Recently the numbers started to jump. Back in January of this year a insolvency specialist was pointing out that we should expect them increasing. I believe that as all the government stimuluses have been pulled back and now its time to repay it, the bankruptcies and abandonment rate of businesses will begin to surface. Add in our current issues in the economy and it is a perfect storm. Here is an article I was extensively quoted in on this matter. In the article I offer sobering advice on how to refocus your efforts and keep the doors open.
Technology: Have technology and innovation stalled?
If you were betting on technology in the equity markets you are likely disappointed that your favourite stocks have lost 50-75% of their value. Does that mean that innovation is taking a pause? Hardly! Innovation never stops. As for some of the existing technology companies perhaps we turn to Cathy Wood from Ark Invest for her perspective on Inflation and technology.
Environment: Dear class of 2050...sorry!
The valedictorian address; Dear fellow classmates,?I chose to start with a message my great-grandfather left to his future offspring.?He was a business man, author and engaged citizen. Here’s?what he wrote.?“To the human race of 2050 sorry we chose lower gas prices and obsolescence, we axed carbon taxes and abandoned protecting clean air and water. We feared our economic destruction more than the destruction of our planet and lives. We hoped your generation would understand. Populist politicians delivered fear and lies promising we could still save the environment without emission goals. The profiteers and gullible lined up once again like sheep to slaughter marvelling at our great economy and wealth creation as severe storms became more frequent and raged with their destructive power. Still we knew that kicking the can down the road like our grandparents and parents before us was wrong. We wanted a planet that could simply heal itself and not prevent us from living without all of our shiny and new possessions. We’re sorry, we hope you are stronger and smarter and can do better. Begin by learning to see the deception created by greed and self-serving political agendas. Choose the future you want and become an unstoppable force to build it. We missed that opportunity, instead we allowed for the creation of forever chemicals that make us sick. We pollute the air and water with waste and chemicals in the name of economic needs. We neglected, abandoned fast tracking and perhaps even buried innovations that could save you. So many diseases from known and unknown sources created by humans. It was irresponsible, I am sorry. ”
Personal Log: Voice and vision in a new global world
My view of leadership is quite simple have the courage to stand up, stand out, take responsibility, risks and continue to perform better than the rest and how you did last year or month. I know it is a tall order. The world has changed and you will find it more complicated. Even those who are 35-45 will discover that their approach to leadership has become outdated unless they work for a company that has not yet discovered how outdated they are themselves. I've learned that both insecure and over confident leaders fall into the same trap. They believe that their time tested practices are still viable and will work for everyone and in all situations. However, what worked last year, in the business battlefield or last job or role, even strategic initiatives most likely will not work. A leader can impose their will on an organization but that doesn't mean it will deliver the same results. It doesn't work in management or even on a board. If you thought it was as simple and as cavalier as adding military type strategies you will be disappointed because even in the battlefield your enemy is not conventional. Ask the Russian's how they feel about Ukrainian soldiers. To be successful you cannot be closed minded to your own beliefs just because it worked in one organization or a country for that matter. Culture is a very important part of creating the future. But to be successful you need to find your voice and have a real world grounded view and vision on how it is changing. Most will dismiss this message because it conflicts with their internal beliefs. That is usually the first sign that finding one's voice and a new vision or even an epiphany are low. To be successful you need find your voice, learn something new everyday and continue to redefine the vision you have yourself in this unfolding world. That's your new beginning to staying relevant throughout your career.
You can be a business leader, stand for a cause, protect the vulnerable and not play politics. Leaders that where teflon jackets like politicians who abstain from voting from issues are not conflicted or undecided. They choose to take no position to play it safe, they will always fail.
Thank you for reading this weeks issue of The Business Brief.
On a personal note: I fight in the real world trenches along the side of society for businesses and communities, not to take from them, but for their betterment so that we all have more time to enjoy life and exist in a safer, fair, equitable and peaceful world. I am not a politician (not yet), politics for me lacks true experienced leadership, conviction and honesty. So many mistake leadership strength with parliamentary procedures and board protocols. Politics is also overwhelmed by one liners, rhetoric and bantering that solves nothing. That's why so many people stay away and choose not to vote, the truth is that's what they want you to do. Be silent.
Until next week!
George
contact me: [email protected]