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Changing times - December 2010

"Insanity: doing the same thing over and over again and expecting different results.”

We all know that change is here to stay and, in most ways, good for us. It keeps us on our toes, and as a society we’ve got used to it. Businesses certainly assume that change will be constantly challenging and challengingly constant. Business understands what Einstein was talking about – to improve you’ve got to change.

There is, however, danger in change becoming the orthodoxy. Lip-service is paid. Change is talked about lots, but acted on to a lesser extent. Change appears to happen. But we should ask ourselves just how much change is truly understood, and more importantly, fully embraced. This familiarity with small change and faux change – small wavelets and ripples that are easily managed – which I will call Rule Changes, may well be distracting us from a tsunami of deeper structural change – which I will call Game Changes. There is a list of big Game Changes already here and in the pipeline which will fundamentally change the way we do business. Here’s just five of them for you to consider:

•    A structural debt in the UK which is forcing large cuts to public sector budgets. This has been brought about by massive expansion of the public sector spend not paid for by rising sales  – since devolution the Scottish budget has doubled from c. £15b to c. £30b. Time to get back to reality, and nip in the bud the dangerous planning assumption from some in the public sector that they will recover their former budgets.

•    Associated with this is a tidal wave of bureaucracy and red-tape which is stifling enterprise. The British Chambers of Commerce estimate that there are some £80b of additional costs to business already in the pipeline. Are we all getting too complacent and comfortable?

•    The rise and rise of the so-called BRIC countries - Brazil, Russia, India and China. (Interestingly, three out of the four have oil and gas reserves.) Their young, vibrant populations, hunger to succeed in the world, rapid GVA growth and confidence, will change the balance of global trade. There is no current threat to the hegemony of the USA as the world’s only super-power, but we won’t have to wait long before this is challenged.

•    The dash for renewables, despite the fact that they are not price-competitive options without public sector support through ROCs, and can only provide a portion of power from a balanced energy policy. Oil and Gas has to improve its image, as Malcolm Webb recently said at a business breakfast on December 1st, or the contribution of hydrocarbons to the economy will continue to be misunderstood, and our energy security will be compromised.

•    Following the Credit Crunch, access to finance will be significantly more constrained, and more sensible pricing of risk by the banks will mean that the cost of money will be higher. Increasingly, growth will have to precede investment.

Many of you will be able to add other Game Changes to the list – there is no shortage of candidates.

So what do we do in the face of all this deep change. Well, put simply, we get on with it. There will be winners and losers; realists and dreamers; optimists and pessimists; those who see opportunity and those transfixed by threat. Organisational flexibility, responsiveness and resilience will be key to success. As Churchill said: “A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty.”

Review your attitudes to change – especially Game Change. You can either surf it or get swamped by it – your choice. The final word goes to American stand-up comedian, George Carlin, who clearly knows that you can’t buy change – you have to work at it, and unless you work at it nothing happens.

“I put a dollar in one of those change machines.  Nothing changed. “
George Carlin