“Uncertainty is the only certainty there is, and knowing how to live with insecurity is the only security.” John Allen Paulos
This quote may come from a mathematician rather than a business leader, but I think it sums up the mood of many within the business community right now.
Companies are having to adjust to major changes in the world around them. From the uncertainty triggered by the UK’s decision to leave the EU to slowdowns in major countries like Brazil and China, the global economy is going through a period of significant change.
Reflecting this fact, the World Trade Organisation (WTO) recently revised its forecast for global trade growth down by over a third. According to the organisation, growth this year will total 1.7 per cent.
This is down on its April estimate of 2.8 per cent. Responding to the statistics, director-general of the WTO Roberto Azevedo said the slowing of trade growth is a serious issue. He went on to suggest it should “serve as a wake-up call”.
Businesses must be prepared to adapt and innovate
It’s easy to panic when market conditions get tough, but instead of doing this, it’s important to try to take a step back and see what we can learn from situations like this.
To me, the WTO figures reinforce the fact that companies have to be ready to adapt and innovate whenever they are met with difficulties. By making sure they are agile and prepared to change their business models to deal with the challenges of the time, companies can protect themselves from a whole range of potential problems.
In fact, the savviest operators are often able to turn seemingly negative situations into positives for their businesses.
A business case in point
In a recent blog post, I referred to the example of the music industry and the so-called ‘lost-decade’.
As the digital revolution kicked in and people started to change the way they consumed music, the profits of traditional record companies tumbled from US$14.6 billion in 1999 to $6.3 billion 10 years later.
While many companies struggled in these difficult circumstances, some were able to overhaul their approach and went on to not only survive, but thrive. They did so by innovating and creating new, successful products.
As Paulos’ quote elegantly expresses, there will always be uncertainty. It’s knowing how to cope with changing demands that can bring people (and in this context businesses) a sense of long-term security.
Chris Niarchos is founder and chairman of the Cobra Group of Companies. In his role, he is responsible for setting the strategic direction for all of the businesses within the group. Since setting up the company in Australia in 1988 at the age of 22, he has grown it into a successful international organisation. It is now a group of diversified companies specialising in managing and developing an exciting and varied portfolio of businesses.