Edition 226 – Predictable Disruption
It’s been a long day. An early start, followed by a series of back-to-back meetings and Zoom calls and I’m done for the day. At 4pm, I fire up the 5.0 litre V8 and head out for a coffee and a short drive. It’s time to clear the head.
As I’m cruising some of the quiet country roads close to home, with the windows down, the music up and the sun setting quickly in the west, it comes to me. The disruption to family businesses and to our economy that have been created by COVID 19 is actually nothing new. Yes, the health aspect of it is new, but have a look at this pattern of disruption in Australia over the last 50 years:
2020 – Bushfires – COVID 19 – Recession
2009 – Global Financial Crisis
2000 – The Introduction of GST – The Millenium Drought – Dot com crash
1991 – “The Recession we had to have” – Record high Interest Rates
1982 – Ash Wednesday Bushfires – Drought – Recession
1974 – Global Oil Crisis – High Inflation – Recession – Government Deficit Blowout
Roughly, every 10 years, there has been a disruption of some sorts wrought upon us. Economic contagion or collapse. Natural disasters. Drought. A fundamental change in government policy. Global pandemic. Each of those in the past 50 years in Australia has led to Government stimulus packages, economic bailouts, business collapses and a reframing of the landscape which we find ourselves in.
With that in mind, it’s fair to assume that sometime over the next 7 to 10 years, there will be some other event, of some other magnitude, from some source that we don’t yet know, that will disrupt our family businesses, our lives and our economies.
With that in mind, and thinking through where you are yourself personally right now and where your family business is currently sitting, here’s some questions that are worth pondering:
- How do we build profit and resilience in our family business between now and the next disruptive event?
- What’s our plan for paying down debt over the next 7 to 10 years?
- What are the opportunities that are there for the taking now and how can we capitalise on those over the next 7 to 10 years?
- Am I physically and mentally in the best shape to take our family business through the next 7 to 10 years?
- What do we need to do to protect our assets and livelihoods to survive the next disruptive event?
- What support am I going to need, both internally and externally, to ensure we achieve the level of success that we’re aiming for?
- What size war chest should we be building up to take advantage of any disruption in the future?
- Will our family business in 7 to 10 year’s time be doing the same it is doing today, at the same level of revenue and profit?
I’m posing these questions today for one reason only. If there is a high degree of predictability that there will be another significant disruptive event in the next 7 to 10 years, doesn’t that mean that in order to insulate ourselves from future shocks, we should be thinking of what we need to do now – not in the future?
This Week’s Tip
The only three forms of disruption that I can’t see have happened in the past 50 years in Australia are War (on a widespread scale), Cyber Meltdown (much like a worldwide cyber attack) and Massive Social Change (think Arab Spring).
Are there any others that you may have considered?