Tariff tensions put a dent in consumer confidence in June 2019 but measurements are still bumping around historically high numbers. Small business optimism is near a high and macroeconomic and small business forecasts are positive.
Most of the businesses I work with are reporting strong growth and record revenues. There is more investment money out there than there are solid ideas to invest it in. We’ve had 10 years of strong macroeconomic tailwinds. It’s easy to get comfortable and feel like a genius.
The last time I felt this level of optimism and opportunity was back in the late 1990s. The ‘dot-com’ bubble was punctuated by first-mover companies announcing they were ‘going online’ and there was much speculation around the promise of the internet. Investors abandoned a cautious approach for fear of missing out and Fed Chairman Alan Greenspan’s warnings of “irrational exuberance” in 1996 were largely ignored. It was a wild ride up until March 2000 and it was fun while it lasted.
While I (and most economists) don’t think we’ve reached a peak in the business cycle just yet, it’s always prudent to think about backing and filling and shoring up the foundations of your business.
I’m reminded of some great quotes from Andrew Grove’s book, “Only the Paranoid Survive”:
“Business success contains the seeds of its own destruction…” and “You need to plan the way a fire department plans: It cannot anticipate where the next fire will be, so it has to shape an energetic and efficient team that is capable of responding to the unanticipated as well as to any ordinary event.”
Sure – go ahead and enjoy your success. In fact, make sure you celebrate it with the people who are making it possible – and listen to them. Also from Andrew Grove:
“People in the trenches are usually in touch with impending changes early.”
Given you need to plan well and listen to your people, where should you focus? Set aggressive goals but be sensitive to barriers and setbacks.
First, check to make sure all the components of your organization are strong at the foundation. According to EOS (the Entrepreneurial Operating System explained in the book Traction by Gino Wickman), there are 6 Key Components of Business:
You can take this online checkup to help: EOS Organizational Checkup
That’s a great start!
When things get sticky or stop working altogether, we call that “Hitting the Ceiling” and there are 5 leadership abilities to check when that happens. That will be my next blog post.