Economic and business cycles are a way of life for governments and businesses; something to manage and surf on a best-effort basis amid continuous ambiguity, blocks, complications and disruptions – otherwise known as the ABCDs. Since I started writing this column in May 2005, I’ve lost count of the number of the bearish economic outlooks as well as bullish recoveries.
Even when the 'big one' in 2008 came, hit and went, many businesses reinvented themselves and progressed after some painful adjustments. If one fears headwinds and only rides tailwinds, then piloting a business may be the wrong career choice.
One should not be unduly worried on reading articles where some academic scholar or Dr Doom prattles over fearful headwinds of recessions – and some writer says he or she has the mythical universal magic bullet solution. A prolonged global recession should be the major source of concern only when business flows evaporate.
In this case, the only option is to drastically cut limbs to allow the business head to survive and ride out the years of ravage, since during such times government aid programmes cannot support every business, so will probably only back bigger companies that employ more workers. An SME's best option is therefore to grow prudently, be frugal in their investment during bullish years and save for the bearish ones.
A upbeat tailwind reminder: Asia’s economy comprises more than 4.5 billion people, has 60% of the world population living in 49 different countries, and opportunities and hot spots are always present. Government trade officers should continue studying these constantly evolving opportunities and hot spots on different levels (country, industry, cluster, Tier 1 to Tier 3 city level, etc), review what policies and programmes need adjustment and then actively communicate and reach out to support their local businesses.
Business executives are increasingly hiring more in-house strategy directors to keep monitoring the changing ABCDs, government policies and regulations, competitor moves and customer tastes and preferences in order to quickly advise their senior management on business impact analysis and recommend optimum moves. Digitisation transformation will help many companies, although impact and speed will vary. Most important is to keep your know your customer profiling current and improve product and service offerings to maintain high net promoter scores.
Don’t let a recession discourage you. Research constantly, maintain your strategic planning, keep upgrading organisational competencies and happy customers will always sustain your business in the vast Asian goldmine of opportunities.
Lawrence Yeo is founder and principal consultant of AsiaBIZ Strategy, a Singapore-based management consulting firm providing Asia market research, business strategy development and export/FDI promotion services.