Business zen: Gita reminder of need for plan

Russell Bell

By Russell Bell

Right about the time you are reading this article, Cyclone Gita will have been and gone.

I hope that the impact will be minimal for you. I especially hope Mrs Bell's garden survives the onslaught — as any negative result will see more time in the garden away from my guitar.

I have been tracking the incoming storm with interest, mainly because I have a specialty in risk management but also because I marvel at the ability of modelling and algorithms to predict (with reasonable accuracy) how weather systems develop and impact the country.

However, I do hope that Whanganui's remarkable ability to miss weather systems remains this time, as the early indications are that the storm itself looks to be quite nasty.

It is also interesting how useful social media can be for communicating important messages when disaster (or even small challenges) strike. Even Facebook moves away from being a cavalcade of pictures of "Hey, look at what I am doing/drinking/eating/watching my cat/dropping my cell phone (etc)" into actual messages of worth to keep people and property safe.

Albeit, I am not sure of the usefulness of being told to "stay safe" without explaining how to do it in context of the impending event — in much the same way as I question the usefulness of "thoughts and prayers" when disaster has struck.

Given the impact of environmental events, there often isn't much you can do except ride out the period of inclement conditions. It is much the same when it comes to the world economy.

A colleague shared an interesting perspective relating current aspects of the world economy and their similarity to the conditions in the ocean which generate these storms we are experiencing more often these days. Hotter oceans give rise to perfect conditions for cyclones and hurricanes — as a result of unchecked warming of the earth and sea.

Financial markets, currently, after living unchecked for years on cheap credit could soon create conditions suitable for fast-rising inflation and required responses (such as rising interest rates).

This was the layman's definition of the recent material drops experienced by stock exchanges over our Waitangi break and, while there is likely more complexity involved (just as with the weather), the point was the conditions give rise to the event. And in much the same way as you can be prepared for storm events, you can prepare for negative changes and circumstances in the economy.

I am spending more time reading up on the markets and will probably consult an expert in the field but, like weathermen, it is challenging to accurately predict just how a financial storm (should it occur) will evolve and how/who it might impact most.

The best that we can do is have a plan and be aware and prepared. Which is what good risk management is about. If you truly understand and cater for the risks you can be able to allocate more time to opportunities.

Last night, when Gita was said to make its presence felt, the plan was to involve settling in and binge-watching Suits on Lightbox — so long as the power remained on!

Balance Consulting is a Whanganui consultancy specialising in business strategy, process excellence and leadership mentoring — contact Russell Bell on 021 2442421 or John Taylor on 027 4995872.