Season of Good News

The good news comes from all sides.

On the spiritual side, the Christmas message of joy, love and hope is eternal.

Temporally, Reserve Bank and trading banks, share purveyors and mood surveyors, statisticians and econometricians, media and greedier – all queue to tell us the glad tidings. Terms of trade are stupendous. The manufacturing and services recoveries have been building for 12 months and are now broad-based. All activity and confidence indices are expansionary, having mostly returned to their 2007 levels. The Reserve Bank’s indication of raising the OCR confirms that excess capacity is being absorbed. Six long years are behind us.

Most businesses have survived. Early on, the wise ones adopted a hunker down strategy, managing for cash and resizing for “new normal” volumes. But survivors may be smaller, weaker and more cautious. Balance sheets may still be ugly. Remarkably, while the stats are still coming in, there seem to have been fewer receiverships and closures than in previous no-growth periods.

In upswings, opportunities are plentiful, especially for those who could maintain their development investment, and stay current in skills and technology. As importantly, those firms which are realistic about risk should capture additional share from those which cannot shake their retrenchment mindset. This adjustment of thinking is difficult, coming out of an extended period of trading disappointments and confidence damage. However, with a diversity of view at Board and Senior Management level, adopting a balanced risk and expansion setting should be OK.

And how could you use the more benign climate which all commentators are predicting? I suggest it enables business owners and leaders to make Big Changes. To Transform the business for its Future. For example, to implement succession changes, to split out a new division, to commit to a major new technology, to stretch a brand, to make a takeover, to cement an alliance. A forgiving trading environment is ideal to implement a Big Change. More demand provides cash, confidence and resilience to overcome glitches, bed in the Change, make refinements, and set the transformed business for success.

Just as the advice is not to waste a good recession, the contrary is also valid. Don’t waste a good boom year.

Roll on 2014!