Stay ahead of developments

Russell Bell PHOTO/FILE

When you create a strategic plan you have to take into account the forces external to your business to enable you to plot the correct course. For some, ignorance is bliss and they prefer to operate using the maxims of the past and expect the old ways and things that made them successful historically to hold true in the current environment. Operating in this way is like climbing a mountain in a T-shirt and shorts that you started in when you got out of the car without reading the weather report (because yesterday was perfect weather).

Those that are truly successful work hard to understand the external factors which impact their business now and into the future. With this understanding they then shape their actions to ensure they operate effectively.

Of late, strategic planning has become more challenging in light of world and local events. We watch almost with bated breath as countries teeter on a cliff made of trillions of dollars in debt. This situation is amplified by growing concerns that asset "over-capitalisation" is once again happening - fuelled by low interest rates.

Not to mention, in Europe, several countries still face sovereign debt crises. These events seem so far away from Wanganui but their economic ripples reach all of us eventually.

What is truly scary about the world economy at the moment is the interconnected nature of financial markets where a negative event in a place miles away can impact economies all over the world. Iraq, Ukraine and even West African countries exporting exotic viruses show how things can change and cause jitters on trading floors.

On the back of these things the New Zealand dollar has reached values which create challenges for exporters. When you take into account farming, the backbone of our local economy, you see a flow-on effect each time the exchange rate moves up - because it means less money for exporters and, as a consequence, less money is spent in local support businesses.

And, yes, there is meant to be a positive side to a strong dollar because it should equate to a decrease in the cost of imports. However, like many I talk to, I have yet to see the price of the imports that I buy drop as significantly as the NZ dollar has risen.

Petrol costing more than $2 per litre is here to stay.

So you need to be watching developments regularly and use that understanding of potential impacts to make the right decisions. It also helps to surround yourself with people who know what is going on and gain access to sources of information that are complete, accurate and valid.

These are uncertain times, but one thing is certain in the business world and that is change - it will happen.

Strategic planning is both our specialty and our passion and we help our clients be prepared and proactive in managing change and achieving success. The more prepared you are and the better your understanding of your business' environment, the more likely it is that you will successfully negotiate whatever the environment throws at you.

Russell Bell's Zenith Strategic Solutions is a specialist Wanganui business advice and consultancy practice.