May you live in interesting times

May you live in interesting times

Welcome to 2022. May you live in interesting times. While there is conjecture as who authored this quote, it remains true today.

This edition of the Martin Haese Report explores the relationship between change, evolution and progress and given that these have been the hallmark of the human condition for ages past, let’s first consider what history has taught us. The most tumultuous periods in modern, medieval, and ancient history are filled with upheaval. Ironically, discomfort and disruption have been the catalyst for progress on many of these occasions. Although stories of plague, insurrection and war can provide compelling reading, those living through these momentous events were undoubtedly experiencing considerable trepidation and pain.

It was however those experiences that built resilience, not always by choice but more often by necessity.

As a student of political history, I am fascinated by how nations have evolved. Russia is case in point as one could be excused for thinking that it epitomises the very definition of upheaval and change. With the Tsars ruling Russia from 1547 to 1917, followed by the Russian Republic from 1918, Soviet era from 1922 and the Russian Federation from 1991 until today, the Russian people have defended their homeland from invasion on more than one occasion and have suffered and prospered at the hands of their own leaders. Russia is however only one example of a nation that has been shaped by upheaval, yet has endured and prevailed. There are many others.

French Emperor Napoleon invaded Russia on 24 June 1812. After waiting for a surrender that never came, Napoleon’s starving troops faced the onset of a Russian winter and retreated out of Moscow. There was no victory here for the French, only a devastating long march in perilous conditions.

Two years into this global pandemic there have been few victories either. However, one thing is for sure, we are still living in interesting times. How have you endured and prevailed? How has the uncertainty of the last two years impacted upon you personally? Have you processed the relationship between security and change?

I encourage you to watch this short video which contends that “you need to dispense with the idea that you have any permanent security outside of your ability to content and adapt.” It’s a confronting statement, but nonetheless quite true. As counter intuitive as it sounds, the truth of the matter is that the only real source of security we have is our ability to adapt.

Now that we acknowledge that change is at the core of evolution and progress, let’s consider why.

In his book first published in 1859, On the Origin of Species, Charles Darwin wrote that the theory of evolution is the process of natural selection by which nature selects the fittest and best-adapted to reproduce, multiply and survive. While some have debated Darwin’s theories over the years, they are a plausible explanation for explaining that evolution is far from stagnant and that nature, the environment and everything that lives in it are in a fluid, constant state of flux.

Come for a ride with me, my entrepreneurial friends, and let us now look at some developments that will shape 2022 into a year not looked upon with trepidation but with giddy anticipation.

The lessons are learned, it’s now time for implementation.

2020 and 2021 were years of reaction and pivot, years where some innovated and some faded away. Every one of us has done something new, many for the first time. 2022 is the year that we put into practice the lessons learned over the last two years.

By very definition, an entrepreneurs’ glass is always half full and 2022 is a year to dispel the voices trying to sell you on the idea that the glass is half empty. Let’s remember that luck is nothing more than preparation meeting opportunity. The last two years of this pandemic have prepared the entrepreneur, and 2022 is the year to claim your opportunity.

Trends for 2022

Having spent the last couple of weeks reading widely about the most likely business trends for 2022, I credit Bernard Marr, contributor to Forbes, as authoring the following insights. In sharing these with you, I have added my own anecdotes.

Trend 1: Sustainable, resilient operations

“Every organisation must seek to eliminate or reduce the environmental costs of doing business. Decarbonising the supply chain is a sensible place to start, but forward-thinking businesses are looking beyond the supply chain to improve sustainability across all business operations. And of course, sustainability is linked to resilience, as resilience means being able to adapt and survive for the long term. Any business that ignores sustainability is unlikely to do well in this age of conscious consumption.”

As Chair of the Premier’s Climate Change Council, I see firsthand the competitive advantage that South Australia has in climate change adaptation, mitigation, renewable energy and circular economy. However, what is sometimes overlooked by entrepreneurs is the megatrend of the low emissions economy that is being driven by customers, financiers, insurers, policy makers, regulators and governments. This is an opportunity rich environment for entrepreneurs and business owners.

Trend 2: The balance between human workers and intelligent robots

“We now have increasingly capable robots and artificial intelligence systems that can take on tasks that were previously done by humans. This leaves employers with some key questions: how do we find the balance between intelligent machines and human intelligence? What roles should be given over to machines? Which roles are best suited to humans? There’s no doubt that automation will affect every industry, so business leaders must prepare their organisations – and their people – for the changing nature of work.”

Having spent some brief  time in Singapore over Christmas and being served by a robot in a restaurant, I can certainly relate to this. The future has arrived. Are you ready?

Covid has accelerated the use of intelligent and autonomous robots in the workplace.

Trend 3: The shifting talent pool and changing employee experience

“The way we work is evolving, with more younger people entering the workforce, more gig workers, and more remote workers. In their book The Human Cloud, Matthew Mottola and Matthew Coatney argue that traditional full-time employment will be a thing of the past, as organisations shift to hiring people on a contract basis – with those contractors working remotely.”

Trend 4: Flatter, more agile organisations

Traditionally, organisations have been hierarchical and rigid in their structures. But that is changing, as leaders recognise the need for flatter, more agile structures that allow the business to quickly reorganise teams and respond to change. It is also, in part, a response to the changing nature of work, particularly the proliferation of freelance and remote workers. This is the age of flatter organisational structures, which are more like flexible communities rather than a top-down pyramid structure.”

Trend 5: Authenticity

“Today’s consumers are seeking a more meaningful connection with brands. And this need for connection has given rise to authenticity as a business trend in its own right. Authenticity helps to foster human connections – because, as humans, we like to see brands (and business leaders) display important human qualities like honesty, reliability, empathy, compassion, humility, and maybe even a bit of vulnerability and fear. We want brands (and leaders) to care about issues and stand for more than just turning a profit.”

Trend 6: Purposeful business

“Linked to authenticity, this trend is all about ensuring your organisation exists to serve a meaningful purpose – and not just serve up profits to shareholders. Purpose defines why the organisation exists. (Not what the organisation is or what it does or for whom. Therefore, purpose is different to mission and vision.) Importantly, a strong purpose has the promise of transformation or striving for something better – be it a better world, a better way to do something, or whatever is important to your organisation.”

Trend 7: Co-opetition and integration

“We live in a time where pretty much anything can be achieved by outsourcing. The global business world has never been so integrated. And it’s a good job, because the need to work together to solve key business challenges (not to mention humanity’s biggest challenges) is great. Indeed, in the future, it will become increasingly difficult to succeed without close partnerships with other organisations. In practice, this means greater supply chain integration, more data integration and sharing of data between organisations, and even cooperation between competitors.”

I subscribe to this notion as I built my national retail company based on the principle of collaboration, instead of competition. In fact, for fifteen years, I had little idea as to who my competitors were, let alone what they were doing. Instead, we chose who we wanted to collaborate with and ignored the rest. It sounds counter intuitive. However, it freed us up to set our own agenda, and to innovate and collaborate as we saw fit. It enabled us to become an industry leader, not an industry follower. I have no doubt that my business grew to $25m annual sales and challenged so many industry norms as a result of focussing on our own customers, not those of others. Not viewing other industry players as competitors proved to be remarkably liberating.

Trend 8: New forms of funding

“The ways in which companies can generate finance is also changing. New platforms and mechanisms have sprung up to connect businesses with investors and donors – think crowd funding, initial coin offerings (ICOs), tokenisation and special purpose acquisition companies (SPACs). Many of these new methods are driven by the decentralised finance movement, in which financial services like borrowing and trading take place in a peer-to-peer network, via a public decentralised blockchain network.”

When I look back on my time as a national retailer, I clearly recall my mentor telling me that I would never understand the business unless I was financially literate. It was the best advice I ever got.

Knowledge informs action

“In addition to these eight trends from Bernard Marr, there will also be transformative technology trends in 2022 including artificial intelligence and increasing digitisation, which every company must be ready for. Read more about all these and other future trends in Bernard’s new book, Business Trends in Practice: The 25+ Trends That are Redefining Organizations. Packed with real-world examples, it cuts through the hype to present the key trends that will shape the businesses of the future.”

Be inspired and fight for your entrepreneurial vision.

Thank you for reading my blog : The Martin Haese Report.

If you haven’t already joined my network, you can sign up for free. Please do not hesitate to recommend my blog to any of your friends, family or colleagues who share our common interests.

With kind regards,

Martin Haese MBA

Climate of Fear or Climate of Opportunity

Climate of Fear or Climate of Opportunity

In my role as CEO of Business SA, the Chamber of Commerce and Industry for South Australia, I remain close to those who take calculated risks to better themselves, their organisations, families, employees and South Australia. After the seismic turbulence of the last 18 months, who could blame the owners of many small to medium sized business for thinking about packing it in?
However, have we ever stopped to think what would happen if business owners lost their individual and collective appetite for risk? Have we even dared to quantify the dire economic and social consequences of a scenario where hundreds or even thousands of business owners pulled up stumps because it is simply too difficult to earn a living, let alone build any meaningful wealth? Personally, I don’t even want to consider this scenario as it is not a pretty picture on so many levels.

All I can say is kudos to the business community. You are the true heroes of 2020 and 2021.

So, let’s consider why so many business owners have kept on keeping on, even when things have looked so bleak. In my own experience, it sometimes comes down to a conscious and personal choice about whether to live in a climate of fear or a climate of opportunity. Let’s face it, over the last 18 months, we have all seen examples of both and have probably even experienced both ourselves.

This is not about being Pollyanna and ignoring the sometimes seemingly insurmountable challenges of operating a business in a global pandemic with disruptions, lockdowns and restrictions. Quite the opposite. Instead, it’s about being extraordinarily resilient. It’s about having a very different mindset, one that keeps telling you that there is always a way forward no matter how bad things may appear.
Again, kudos to the business community. I am in awe of your strength and fortitude.

If this conversation resonates with you, I now encourage you to think about another seemingly insurmountable challenge. Climate change.
With the recently released United Nations Intergovernmental Panel on Climate Change (IPCC) report stating that planet earth has entered “Code Red for humanity”, we have every reason to be fearful. Very fearful. However, it’s that very fear that will motivate us to act. Also, are we asking ourselves the right questions? Maybe, just maybe, there is an opportunity here.

As a jurisdiction, South Australia has one of highest uptakes of renewable energy on the planet. We are also leaders in everything from container deposit legislation, single use plastics, waste and recycling, battery storage technologies, wind farming, blue carbon innovation, sustainable water management and agricultural practices. We have real opportunities for green minerals, green steel production and green hydrogen, and the State Government has a plan to reduce carbon emissions by 50% by 2030 (based on 2005 levels).

Let’s consider why? Well, that takes me back to South Australia’s entrepreneurial spirit and the creativity and resilience of the business community.

Ahead of the COP26 UN Climate Change Conference in Glasgow in November, Business SA will host its very own Climate of Opportunity luncheon in Adelaide to explore the challenges for international trade and growth in the low emissions economy.

Guest speakers will include Hon David Speirs MP (Minister for Environment and Water, South Australia), Steph Lysaght (Consul-General of the UK), Akhil Abraham (Head of Climate Diplomacy at the British High Commission, Canberra) and a panel of South Australian business leaders who will discuss how we can position our businesses for future success in a changing world.

Thank you for reading my blog : The Martin Haese Report.

If you haven’t already joined my network, you can sign up for free. Please do not hesitate to recommend my blog to any of your friends, family or colleagues who share our common interests.

With kind regards,

Martin Haese MBA

We need a Bigger Budget for Small Business

In my role as CEO of Business SA, the Chamber of Commerce and Industry for South Australia, and my former roles as Lord Mayor of Adelaide, University lecturer, GM of Rundle Mall and as a national retailer, I have always taken a keen interest in how State and Federal Governments craft their annual budgets to support those who take risks and make things happen in the economy. I am of course referring to entrepreneurs.

Over the years, I have seen some budgets hit the spot and others miss woefully.

With the vitally important 2021/22 State Budget for South Australia handed down on Tuesday 22 June, and with the end of the financial year now upon us, I reflect on what a different position the business community was in only twelve months ago.

Although many businesses were gradually returning to trade in June 2020, most were still riddled with uncertainty and hoping that last year’s State Budget would support them through the turbulence. Treasurer Lucas delivered the goods and as the peak body for business in South Australia, Business SA was grateful for it.

COVID-19 wreaked havoc across the business community in 2020
COVID-19 wreaked havoc across the business community in 2020

The bounce back following the first lockdown in 2020 was pleasantly unexpected and other than the disruption caused by a subsequent lockdown in November, business confidence has continued to build. As we learned from the results of the March 2021 Quarter of the Business SA William Buck Survey of Business Expectations, business conditions have again risen now to their highest level since just prior to the Global Financial Crisis, and business confidence was not far behind. Fingers crossed that this continues.

In valued partnership with William Buck, Business SA has published the Survey of Business Expectations every quarter for almost 40 years
In valued partnership with William Buck, Business SA has published the Survey of Business Expectations every quarter for almost 40 years

Although the majority of businesses are doing better than expected, the survey also revealed that 21 per cent of businesses expect for their revenues to be below 70 per cent of pre COVID levels by the end of this quarter. That’s of real concern and why the recent State Budget needed to back all businesses, with a focus on initiatives that both grow our economy and support small businesses that are still experiencing hardship.

The unfortunate reality is that this pandemic is far from over. Although on a local level, South Australia is thankfully performing well, the risk of COVID outbreaks is still front of mind for many small business owners, as demonstrated by lockdowns in Victoria earlier this month and current localised lockdowns in Sydney and several other places.

In April this year, I handed our pre-budget submission to Treasurer Rob Lucas. It included a suite of 13 recommendations from Business SA. These recommendations are far more than hours upon hours of work from my expert team, let me tell you. Instead, these are genuine pleas from our members, the coal face of the business community across South Australia.

Small to medium sized enterprises are the backbone of the South Australian economy
Small to medium sized enterprises are the backbone of the South Australian economy

We asked for the State Budget to address a funding mechanism to support South Australian SMEs through future periods of severe restrictions and why it MUST support the events, arts and live performance sectors who are still heavily impacted by restrictions.

We asked that temporary payroll tax waivers be extended for businesses most acutely impacted by ongoing restrictions including closed international borders, and that Adelaide’s CBD should have a bright spotlight shone upon it through a cold and dark winter, with hospitality, retail and accommodation sectors struggling to perform without international tourists and students. These things, along with a continuation of the incentives for employers taking on an apprentice and/or trainee, were mostly included in the 2021/22 State Budget. On behalf of the business community, we appreciate that.

We also hope for stronger measures in the future that enable the growth of industry, build local manufacturing capability, support jobs growth, fast track important infrastructure plans with more local procurement and capitalise on our state’s global renewable energy and circular economy leadership.

Business SA State Budget Luncheon on Friday 2 July 2021
Business SA State Budget Luncheon on Friday 2 July 2021

Providing there are no monumental disruptions, Business SA will host Treasurer Rob Lucas at Adelaide Oval on Friday 2 July for our State Budget Luncheon with the Treasurer presenting a detailed business briefing on the 2021/22 State Budget. This event includes a response by Shadow Treasurer Stephen Mullighan and a budget analysis by an expert business panel. Limited tickets are available at www.business-sa.com or contact my team on (08) 8300 0000 today.

As they say in show business … “The show must go on!

Thank you for reading my Blog : The Martin Haese Report.

If you haven’t already joined my network, you can sign up for free.

Please do not hesitate to recommend my Blog to any of your friends, family or colleagues who share our common interests.

With kind regards,

 

Martin Haese MBA