I’ll huff and I’ll puff and I’ll blow your house down!
Those familiar with the historic fairy tale of the 3 little pigs will recall that 3 pigs set out in the world to make their way and fortunes. Each of the pigs chooses materials to make their house from. 1 chose straw, 1 chose sticks and 1 bricks.
The first 2 are able to finish their houses quickly and set about doing other things, while the 3rd pig takes a lot longer to build his brick house. As time goes by the wolf appears looking to feed on the pigs and one by one attacks the houses with some famous lines “Little pig little pig let me in” and “I’ll huff and I’ll puff and I’ll blow your house down”.
The first 2 pigs meet a horrible end when the wolf is able to blow their houses down and swallow them up. The 3rd pig’s house being built on solid foundations and in a very strong / solid way is able to easily repel the wolf’s efforts to blow it down.
The wolf then tries to outsmart the pig to get him out of the house but the pig uses its head to outsmart the wolf and in the original versions ends up killing the wolf in a boiling pot of water (a trap).
Okay so you are wondering where this is going?
The world of business is hearing the doom and gloom stories of the current economy and consumers are feeling the pinch of rising interest rates and fuel prices. If you believed all the press you would think every business is in a down turn and that doom and gloom is about to enshroud the country and planet.
Reflect a little on the fairy tale.
Who is the wolf or what is the wolf? Who are the pigs? Are the first 2 pigs the operations that have pushed the boundaries of business and finance rules constantly in the last 10 year boom cycle without thought of consequence? Could we call these the ‘greedy little pigs’ who have pursued their ends without investing in the solid infrastructure in their operations to ensure they can withstand the wolf?
(For this post I am not going to discuss the lack of input or direction from national regulators).
Many businesses have been formed around great ideas or to profit purely from special holes in the market, and the press has highlighted their successes while growth continued. Now of course the walls have started to come tumbling down, extended credit with no asset backing, are leaving a trail of wrecked corporations and investment vehicles behind them.
From Investment operations to public companies we are seeing that the growth for growth sakes model has been proven again to have flaws if not managed correctly. Consumers and other businesses are returning to the solid rock operation who might not be providing the stellar growth options but who they know will survive the current tumultuous conditions – those built with bricks.
I don’t mean brick and mortar businesses either. I mean businesses built with a solid foundation and structure that have both valuable products or services to sell, and processes to deliver them to their customers. They will be able to cope with changing cash flow circumstances and slackening demand in some areas, and will have experience in modifying their business to capture the opportunities that become available in this type of market.
We are already seeing the change in sentiment in our smaller customers. Those who are being impacted are reducing the freedom with how they spend the money and being more circumspect about when they spend it. Now they don’t just believe the promises they hear from freelancers and other smaller new businesses, they are more concerned about who will be there when they need them and while knowing that sometimes going with a bigger organisation can cost more (not always) they know that business will be there when they need them.
It would be unfair to say that there is a particular size or type of business that can withstand
changing economic market fortunes. There are freelancers who have been around a long time and
know how to manage and deliver on client expectations and there are new start-up enterprises that have started with solid foundations. There are also older businesses that might not be focusing on their business who will also get bitten badly by the wolf.
All in all it comes back to making sure you have a plan, use solid methods to
get there and remember you still have to outsmart the wolf by thinking on your feet and not
believing everything you read or hear at face value!
Ireckon I better go and check if we have a pot of water under the chimney!