What’s in Store for 2017?

Someone once said that if you took all the economists in the world and laid them end to end, then you wouldn’t get a clear decision.

When it comes to 2017, that’s about the size of it.

If you ask the Brexiteers, then things were never better. If you ask the sad Remainers, then things couldn’t be worse.

It’s like that in the United States, too. The Trumpers think that things are looking up, and the so-called Progressives are so terrified that they need counseling and colouring books to make them feel able to cope with life.

So far, the markets are with the Trumpers, as they are with the Brexiteers. There’s an undeniable sense of anticipation in the air, and it’s not of impending doom. Rather, it’s that the people have spoken and, having done so, things will get better.

 

Optimism creates economic recovery

Optimism can create economic recovery, and there’s precedence for that.

During the Great Depression in the 1930s, Franklin Delano Roosevelt got all the leading newspaper editors from across the country together. According to Napoleon Hill, the author of the classic Think and Grow Rich,he explained that they needed to “talk up” the economy. As long as people believed that the economy was depressed and getting worse, they would act as if that was the case. They wouldn’t spend the little money they had. And as America’s economy depended upon consumer demand, they had to figure out a way to get it going again.

To a certain extent, it worked, though the War intervened and the Government was forced to pour more than 340 billion 1945 dollars into fighting it.

 

A ground rule

Let’s remind ourselves of a fundamental ground rule.

No one knows for sure what the next twelve months will bring. That said, no one knew this time last year what would happen in 2016. Two years ago, no one knew what would happen in 2015.

There’s a short passage in the fourth chapter of the Epistle of James which is very appropriate. Verses 13 and 14 read, “Come now, you who say, ‘Today or tomorrow we will go to such and such a city, and spend a year there and engage in business and make a profit’. Yet you do not know what your life will be like tomorrow”.

It really doesn’t matter whether you believe the Bible or not. Wouldn’t you say that that is an accurate assessment of what many people think compared to the reality of what they experience?

They make great plans to accomplish something, in business or in their private lives, and then something happens and for one reason or another they are unable to bring those plans to fruition.

More than 50 years ago, researchers came to the conclusion that few managers knew how to design strategies and then execute them successfully. That is for another discussion, though it does show that it is a chronic problem.

More often than not, plans have to be changed because circumstances change.

 

What can we expect in 2017?

What do the pundits tell us is likely to happen?

Even though the terms of Brexit are unknown, it’s already obvious that things are not going to be as grim as the naysayers tried to make us believe. And so rather than accepting their opinion, let’s consider some things objectively.

 

Economic growth and investment

Both the CBI and the National Institute of Social and Economic Research expect the economy to grow faster than the figures provided by the Bank of England.

Remembering what we know about consumer optimism, what would you do differently in your business if you were confident that your earnings would be higher twelve months from now than they were last year? Would you invest in better technology? Would you hire some extra staff? Would you give your people some additional training and development? Would you raise salaries and wages?

You can engender enthusiasm and optimism in your own organisation by acting yourself as though things are getting better. Wouldn’t that be worth a try?

One the interesting things about the CBI is that although they think the economy will grow to a much greater extent than the Nank, they also think that investment will be of no consequence. Just think of the advantage you could get on your competitors by investing regardless. It could be that you are the only one or among the few in your industry who does.

 

Demographic changes

A second thing we can expect is that more people from Generation Z will enter the workforce. Again, it depends on who you ask, but most agree that that generation began in or just after 2000, and so there will be a certain number of them who will turn 16 and be looking for jobs. There will also be an influx of new Millennial graduates, too, but not enough to compensate for the skills’ shortage that’s exacerbated by retiring baby boomers.

As Internet speeds increase and the trains become less reliable – if that’s possible – there will be more reasons to let people work remotely and more people who will want to. Those in Generation X as well as Millennials would rather work than spend a lot of time getting to work. To them, commuting is a waste of time. And since London’s house prices and rents show no signs of declining, it will mean that their commuting times are likely to increase. This will not make them happy.

Wouldn’t you rather that they were working for you when they were at their freshest, rather than traveling?

 

What plans have you made to deal with the changes in your workforce in the coming year?

 

Lifestyle changes

A third thing we can expect is that people will re-evaluate their lifestyle. Lifestyle drives consumerism.

Some people will downsize. Others will start families and need bigger homes.

Some will decide not to renew their contract with you. Have you thought about that?

Others will seek assurances from you that they can continue their employment. Some will apply for promotions while others will turn them down in order to spend more time at home.

You need to examine your own lifestyle, too. Are you giving time to your relationships? Are you getting enough rest? Could you benefit by taking more exercise or losing some weight? As the saying goes, “you’re not getting any younger”. Why not make some changes of your own in your own life that will benefit you, both at home and at work?

The New Year is exactly what it says on the tin. Although there will be some similarities to last year, there are likely to be more changes.

You need to think about what can and will change, and then plan for how to deal with it, bearing in mind that your plans will have to change as well. That’s because your results are influenced by so many factors outside of your control.

Rather than trying to control for every eventuality, it makes much more sense to build as much flexibility into your business and your life as possible. Then you’ll be able to adjust quickly, with less difficulty, and a minimum of angst.

It’s the people and the companies who try to keep things as they are who find that reality gets in the way.

 

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