As the year gets started, you already need to be driving at full pace.
Much like the well-known ‘pace lap’, 2011 was a year for most businesses across the region to regain their speed. In motor racing the pace lap is the preliminary lap of a race that prepares the drivers for a fast start. Instead of sitting still at the starting line and waiting for the official to signal the start, like you do in track and field, the pace lap allows the racers to have momentum when the race starts. The drivers use this lap to warm up their engines and tyres ahead of a flying start once the pace car pulls off.
In many ways 2011 was a pace year for 2012. Or at least let’s hope it was.
So coming into 2012 with our motors running at high speed, what should we be on the lookout for?
Unfortunately, there is some debris on the track that we all need to be concerned about – the global reach of the Euro debt crisis and the forward effect from the on-going Arab spring. There is very little we can do about the Euro debt crisis other than be mindful and have a trough plan ready if the crisis declines further.
During the boom in 2005, long before the financial crisis, Caterpillar, the manufacturer of multi-tonne earth moving machines, was busy planning for a bust knowing the volatility of their market and the impact it could have on them. Each business unit was forced to build a trough strategy based on the worst trough in their history and demonstrate, if this happens again, how they would react to make money. Then when the recession hit, all they had to do was pull out their trough plans and put them into action. Each business unit went into crisis mode, which resulted in record speed and unparalleled growth.
In 2010, Caterpillar was the best-performing stock among the 30 companies in the Dow Jones industrial average. How did a company that requires huge sums of financial capital, whose products are expensive investments that last for years, outpace all the others? They planned for the unimaginable so when it was a reality they were ready.
Now, let’s concentrate on the debris from the Arab spring.
In 2012, it will be prudent to copy the practice of Caterpillar and have a plan ready for a black swan event. But don’t let the concerns impact your day-today speed. You need to be like the driver who knows a crash may happen ahead of him but is mature enough to know that he needs to mindfully maintain his speed or risk losing the race.
It is now being reported that the ignition for the Arab spring was a lack of dignity coupled with high unemployment. Regional job creation for Arab nationals should be a focus for every business in the region. In addition to having a broader community interest, the reason to focus on job creation comes down to an economic principle – demographic dividend. The demographic dividend happens when young working-age adults comprise a disproportionate percentage of a country’s population and the national economy is positively affected.
Across the GCC, it is true that young adults comprise a disproportionate percentage of the population but they are also the majority of the unemployed, which is robbing the region of the demographic dividend. Collectively, everyone benefits from job creation. So, everyone needs to contribute to it.
Now, what will fuel the speed of your business? While it is important to have the right business model in place, across the region it seems that the most overlooked dimension of speed is the people. Specifically, engaging the workforce to be productive – employees putting their heart into work, not just hours.