Resilient futures – picking the patterns for 2012

Larry Quick | November 15, 2011

It’s a simple formula. Take any organisational form – business, community, agency or non-profit. Each generates value by consistently aligning their business with the global and local conditions that may impact them, such as economic crisis, energy reorientation, social disruption, and so on.

Organisations that get that formula right most of the time, survive, thrive, are successful and generate consistent value and returns for their stakeholders. For those who get it wrong, the order of the day is stagnating economies, businesses doing it tough and communities losing their soul.

What makes the loss from not following the formula a tragedy, is that it is simply not hard to understand, or to do. It’s just that most organisations either do it very badly, or not at all. This quandary becomes almost comical when we understand that sporting teams, in fact, do it better than some of our best corporations, cities and federal agencies. Imagine a football team coach who always lost sight of the conditions the game was being played under, and always put the wrong players on the ground. Sacked!

As we step into 2012 we need to be ready to recognise and address the key patterns that are emerging and act on them to generate opportunity in the new business environment. Here are a few patterns to watch in 2012: 

An oscillating global and local economy

Mistaken as volatile, an oscillating economy is due to the convergence of a multitude of events – population growth, power shift to emerging countries, demand on limited and easily replaceable resources, and an inability of the economic system to cope. The system dramatically fluctuates as it tries to establish a stable state at a time when more pressure is applied to ‘fix’ the problem. In doing so, we inadvertently drive the fluctuation of currencies, markets, commodities, and the lagging to and fro of monetary policy as it tries to ride a global economic rollercoaster and stabilise an out of control system.

Heavy cost of energy disorientation

While energy is a primary input to the survival and growth of any organisation, the demands on energy far outstrip supply. Though we have many encouraging replacements, the deeply embedded behaviour and infrastructure that supports the current forms of energy are very hard to change. So, we have a large gap between supplies for current growing demand and the immediate availability of viable alternatives. Think about a change for domestic vehicles from petrol to electric or bio-fuels. The cost of petrol at the pump today is roughly $1.45AUD –  the same price as in 2008 (stage one Global Financial Crisis) with a $140pb USD oil price. Today we have an Australian dollar at around USD parity. Imagine if (or when) the Aussie dollar dips to say 90 cents – what cost shocks will that send through the economy, your business and your competitors businesses?

An explosion of the business of climate change
I remember writing a paper in the early 80’s, driving home the importance of the business of sport. Believe it or not, around that time sport was not looked on as a serious business. Since then I have also been involved in driving recognition of the online economy and creative economy. All are now recognised as critical facets and inputs into overall economies. But what an effort it was for many people to recognise emerging economies like these. The same goes for the business of climate change – especially when a new filter is applied to parse out the cost to economies, and added growth in businesses servicing such conditions as extreme weather events, energy reorientation, preparation of coastal areas for sea level rise, food production and community enablement to manage the issues themselves. The likes of a carbon tax will provide some spark to the climate change industry, but it’s really entrepreneurs wanting to cash in on a new era, and source of wealth, who will drive it.

Australia beyond Broadband
The National Broadband Network (NBN) is now a household term. But do we really understand what is fast emerging in a post-broadband environment? Do we understand the rapid emergence of the ‘deep’ technologies like cloud computing, HTML5, IPV6, Augmented Reality, DAAS? Are we prepared for the impact this will have on how we currently deliver services, and who will deliver services? Having a larger connection to customers in Australia is not only good for local suppliers, but also opens a wider door for global competitors. The NBN will be a boon for Australian consumers, but the optimisation of our economy will be directly related to how our retailers, financial services, universities, health services, media, Telco’s, and the like, can transform their organisations to take a bite out of a completely different service landscape.

Rise in community self-determination
The rise in social outrage that is showing up as ‘Occupy Everywhere’ may appear as a token effort by a disheveled group who don’t know what they want. In some places that may be so. But, if we look more deeply, ‘Occupy’ represents the emergence of a deep seated distrust and disillusionment within grass-roots communities. What is also emerging, is the formation of community groups whose members consist of some of our best thinkers and leaders, who are willing to stand up and take their part as a fourth leg of a platform alongside business, government and non-profits, to address some of our biggest challenges. These community groups want to get things done through strategy and direct action within their communities, and in a similar way to ‘Occupy’, they are not willing to suffer the inefficiencies, extravagances and misuse of power they see in some of our bureaucracies. Australia’s first community-owned wind farm was launched in early November 2011 in Daylesford, after $10million was raised locally to fund a new enterprise tasked with the job of building, maintaining, servicing and supplying the energy needs for the 2,000 homes in the area. An immense achievement, but not any bigger than the 275 community-owned branches of Bendigo Bank that grew out of the closure of local branches by the big banks. These efforts show exactly what communities are capable of when they become organised and strategically direct their efforts.

Risk, asset uncertainty, stranded assets and immense opportunity
Think about your organisation, and all of the above. How will your organisation survive in such an emerging environment? Think about your assets, and how they are represented on your balance sheet. What value will they hold in 2012 and beyond? Will shareholders see your organisation mitigating risk by looking deeply into these types of conditions and emerging patterns, and realigning capability to unleash a new generation of value? If not, then maybe the Mayans are right – your world may end in 2012!

Without a doubt, we are in interesting times. Times that will sort the wheat from the chaff. Like many watershed moments in history, this is a time that will be defined by those able to see the emerging opportunity and go for it as many wilt, wax and wane trying to hold onto the past.

For those able to see the conditions facing us there is light at the end of the tunnel. Exactly what light – new beginning or another train – will depend upon an organisation’s ability to recognise opportunity within complex change.

How prepared is your organisation for 2012? What emerging patterns do you see?