Which Way is the Wind Blowing?
How well can your business adapt to change?
I have recently repaired and repainted a sailboat with a view to “eventually” doing some weekend sailing on the bay. So I have been doing some thinking about sailing and how it applies to business.
The interesting contrast between sailing and power boating is that with sailing you are taking the natural condition of wind and using it to get where you want to go, while with power boating you are essentially using a motor to fight the wind and waves to get to your destination.
A sailboat can go pretty much any direction that it wants to simply by setting the sails to transfer the direction of the wind into motive power to drive the boat. The trick is finding out which way the wind is blowing and having the know-how and experience to adjust the sails to take advantage of it, to get where you want to go.
There is a parallel between sailing / power boating and your business / marketing strategy.
Some organisations spend a lot to drive their products onto the market using all the power of advertising, promotional incentives, special offers etc, just like a power boat. The opposite is the businesses that are smart enough to see emerging trends or opportunities and launch a new product or adapt a product they already have to meet the new situation. They gain additional sales and often get free publicity from the media through providing something new or interesting.
All businesses, big and small, are affected by the winds of change to some extent. A big organisation, like a big boat can ignore small local or regional changes, but has to find ways to adapt to the bigger national and international ones.
Small businesses like small sailboats have to watch out for smaller local or industry changes in wind direction, risk being capsized, or worse failing to take advantage of an opportunity for progress.
You can either catch and surf a wave, or be wiped out by it. It is the same with the winds of change.
What winds of change are affecting you and your business?
Which way are they blowing you and what strategy do you need to put into place so that you can use these winds to advantage?
Out on the Bay or the Ocean, or in business, the winds are fickle and can change direction from hour to hour, so you need to keep changing the settings of your sails to keep your business heading in the direction you want.
The first thing you need to do to achieve this is to recognise that your business or yacht is being affected by several different winds of change at the same time and that you need to keep them all in mind when skippering your yacht or business.
The GLOBAL wind
Whatever is happening in the world affects not only you and your business but also exchange rates, business confidence, imports, exports, your competitors and finally your customers.
The Global Financial Crisis (GFC) for example nearly bankrupted some European countries like Greece, emptied the war chest of the Australian Government and left a lot of Australian Bank’s assets looking less solid.
Whether that is the cause or not, the relative strength of the AUD Dollar versus US Dollars, Pound, Yen, etc means problems for farmers and easy money for importers. Is there another round of the GFC yet to come?
How would the World handle it when they have all borrowed heaps to stimulate their economies out of the last one?
What about the effects of global warming, refugees from war torn countries overrunning Europe, cyber-attacks, the US President, secret tax havens for global businesses, global internet and email communication, the world market for goods and services, technical and communication improvements.
There are a lot of “Global” winds affecting our lives and businesses.
The NATIONAL (Australian) wind
Winds closer to home produce more immediate effects!
Because we have a minority government, climate change protests, and concerns about banks, falling property values and general pessimism, future directions are difficult to predict. What we do know is that the mining industry is now down-turning and the prices for the stuff we dig up, like coal and iron ore, are very ordinary and the future use of coal fired power stations opposed. Add farmers in drought and in debt to keep the cattle and their families fed and you have a multitude of Australian winds and cross winds to deal with.
The STATE (Queensland) wind
The big question in Queensland is whether the population growth continue and keep the building industry in the buoyant state they have become used to. Add in the continued sale of State assets and the price rises that seem to inevitably follow as they have with electricity supply. A lot of households and businesses have already installed solar power and a lot will be looking at battery storage to make it go further.
I’m sure I am not the only consumer out there who would like to be independent of the supply grid. Does that mean fewer power stations in the future?
With the Adani mine moving forwards and climate change protestors disrupting regular business, there are plenty of winds in the State that are confusing and worrying businesses
The LOCAL wind
What is happening in your local area? How does that affect your business? Is it positive or negative?
Your INDUSTRY wind
What trends are happening in your industry? In retail for example we have the failures of the Masters Hardware Stores and icons like Dick Smith, dampened your thought of expansion? What does the huge growth of on-line shopping say about the retail business?.
Your CUSTOMER’S wind
There seems to be an unprecedented number of sales and special offers happening at the moment, so we can see consumers are trying to hang on to their hard earned cash. That confidence crisis at consumer levels affects other industries too. How are your customers travelling at the moment? How can you make it easier for them to do business with you rather than your competitors?
The BACKGROUND wind
The background wind is a difficult one to pick. But I sense a general dissatisfaction with Governments at all levels and a move towards self sufficiency and independence. The dramatic devaluation of superannuation during the GFC also dented people’s confidence in the future. Partly a “tree-change” trend, partly driven by fear and distrust I think.
Where is the Wind Coming From?
Is the wind blowing you towards your objectives or away from them? Is it good for business or bad? Is it a wind coming from the side that just moves you sideways without going forwards or backwards?
“How can you set your sails to take advantage of the wind whichever way it happens to be blowing?”
Wind Behind You
If the winds of change are behind you and blowing your business in the right direction, it is time to take advantage of your good fortune and get your sails out as wide as possible and break out the spinnaker as well. Make the most of favourable circumstances while they last and watch out for changes in the wind direction so you can lower the sails quickly if you have to.
Wind Blowing Towards You
If the wind is in your face and you don’t want the business to be blown backwards, you have to “tack”. Your yacht can sail easily at a 45 degree angle to the wind direction and can still make progress towards your objectives by zigzagging towards them. It takes a bit longer but you still get there.So if the winds of change are blowing your business backwards look for areas where you can make some progress at least, instead of battling head on.
Wind From the Side
When the wind is from the side it is not directly affecting your yacht or business. But if the sails are set so that the wind from the side fills them then you are off like a rocket. So if the winds of change around your business, industry, customers, location are not blowing you forwards or backwards, look for an angle that can give your business an advantage. While the wind is blowing you can use it to power you in any direction you want.
There is no wind at all and your business is becalmed getting the same old results from the same old customers as previous years. It’s time to start up the outboard motor or get the oars and start rowing.
Change is now a constant in life and in business so if you are not changing you will be going backwards. So if you are becalmed start thinking about doing things differently, adding new product lines, chasing new customers. Talk to a marketing consultant and start putting a strategic plan into place.
High Wind - A Storm is Coming!
If you can see a storm coming your way the smart thing is to make a run for the nearest port or shelter and batten down the hatches until it is over. That tactic is the same for your business, reduce costs, reduce inventory and get prepared to fire up again when the circumstances are favourable.
Businesses in my opinion are a lot like yachts out on the bay each making decisions that affect their performance and safety and using the wind to help them to get where they want to go.
When planning your business strategy it pays to think about all the things that could be affecting your business and the winds of change analogy is a helpful way of looking at them.