Facing Global Change in Our Own Backyard
China devalues the yuan. Greece agrees to a third financial bailout. A barrel of oil drops below $40. What do these places and events have to do with Muncie Power Products or how to operate a company?
Simply put, what goes on around the globe affects us at home. It’s a reality too many leaders don’t fully embrace.
China’s move to devalue its currency signals there may be trouble for the global economy. The move could mean less expensive imports in time for Christmas, a slow interest rate hike in this country and an affect on our decisions to borrow for capital improvements.
Why should we care what happens to the economy in Greece? A destabilized Eurozone would weaken the world economy, as it is a key trading partner for the U.S. and Asia and at the heart of the global financial system.
These are factors that should weigh on our decisions to move forward. Is this the right time to grow our inventory or pull back? Should we brace for a slowdown or make new hires anticipating an opening between competitors? We cannot make critical, strategic decisions in a vacuum.
Here are some things we try to keep in mind at Muncie Power Products.
The world is bigger than what we think it is: As Americans, too often we don’t look internationally for economic trends that might one day affect our own industries. Global economics has everything to do with America’s economy. Yet, we often lose sight of that or don’t consider watching what is happening abroad as a tool to anticipate what might happen here. We witnessed the reaction of the American stock market in late August to the series of events that first occurred around the globe. Whether a panicked sell-off or needed market correction, if you’re on your game as a chief executive you may have seen this coming. How do you anticipate a global crisis? Like we would any crisis, you keep your eye on the target. A resource you might appreciate is Dr. Alan Beaulieu, Institute of Trend Research.
Discover our own network: We cannot sit on the sidelines and expect to have a voice in our industry. We must be engaged in the global conversation. That means we should leave the office, align with organizations with similar values and give willingly of our time and expertise to these forums. To make this happen at Muncie Power Products, we turned to our calendars with a notion of being intentional about our efforts. Initially we wanted to be associated with the larger marketplace, resulting in the opportunity to network and better understand what was going on globally and how it would affect us.
Know what we’re looking for: There are a lot of associations we can join but to know what we’re mining for brings an intentional aspect to our participation. Being a member of a trade organization should be more than checking a box or simply being a participant. As we look for the right organization for our company, we ask ourselves this: “What do we want out of this? What information would help us grow our company or our expertise?”
Get educated ourselves in strategic forecasting: Strategic forecasting is a kind of intelligence that focuses on events that have broad and fundamental effects on the international system, says geopolitical analyst George Friedman. What’s an international event? We’ve watched a wide range of events just this year in Cuba, China, Russia and the Ukraine. According to Freidman, “Sometimes the center of gravity of this level of events is a single event that sets in motion other events. Sometimes it is broad processes. These are events that transform the way the world works, and puts nations at great advantage and disadvantage. They have lasting consequences on a broad range of issues.”
We don’t have to be in the same industry to learn from one another: Americans, in particular, tend to wait until an economic slow-down to reduce inventories or cut labor. It happens in the service sector, in retail, in manufacturing and production fields. Doing this hurts customer service, brand and longevity. Remember, it’s a balancing act. Don’t succumb to short-termfixes that become long-term problems.
As we are considering our network/associations with which we will be affiliated, we remember what our parents always said, “Be careful who you associate with.” Look for those who will stretch your vision. If we associate with the eagles, we will see the world and our opportunities in a much different way.