Well, we’re a couple of weeks into the new year. There have been lots of predictions for the year ahead, top 10 lists and resolutions made (and probably broken). New year gym enthusiasm is waning and people have settled into the new working year. What’s on the agenda for 2017? Change… and lots of it!
Inflationary pressures, Brexit, Living Wage rises and President Trump. This interesting mix of challenges creates uncertainty but, as we can’t control them locally or corporately, I suggest you get comfortable being uncomfortable in 2017. There are no easy answers, so you need to back yourselves and your team.
Uncertainty is also the dominant theme from Christmas trading announcements. Across the Midlands, Next plc seems to have struggled a wee bit, but hospitality and pub group Mitchell & Butlers, along with Halfords plc had a great time. The big supermarkets have all done well, as we stocked up on festive cheer at the end of 2016.
Many commentators are questioning whether this was a final hurrah before Joe Public hunkered down for a tough 2017. They are certainly a few headwinds coming our way. I’ve just been reviewing my Twitter feed and have seen the disastrous Pearson Publishing results; something like the fourth profit warning in five years.
That business really missed the changes that have impacted their business in recent times, such as students stopping buying text books and moving online instead. Digital is here Mr & Mrs CEO; ignore it at your peril.
I’ve also just read the first quarter update for new US insurer start up Lemonade, whose claim to fame last year was paying a claim in three seconds. Is this negligent or irresponsible? Neither. They have entered the digital age and, through clever use (yes, using not just talking about it) of artificial intelligence (AI), they are really challenging the incumbents.
Robotics, AI and the Internet of Things will be developing areas to watch in 2017 and beyond. Regionally, Homeserve are very focussed on these developments. Start-up, connected home insurance company Neos have also been quick out of the blocks.
A word of warning though, tech is not the Holy Grail. People first is a key mantra of mine, so keep investing in your team and culture at the same time.
Speaking of culture, I had the pleasure of attending a Greater Birmingham Chambers of Commerce event, hosted by Paul Faulkner (Chamber CEO) and looking at the latest regional business confidence survey. We also heard from the impressive and refreshingly honest and grounded Grant Adams, who is the CEO of Birmingham based Sertec Group, a real Midlands success story.
Grant really drove home the importance of company culture and investing in people, especially mentoring apprentices, which is key to their success. Sertec are currently topping £250m revenues and 2400 people. Over the next five years they expect that to grow to £500m and 3500 employees, not bad considering all the potential nasties out there in the public domain.
The Chamber event looked at business confidence in the Greater Birmingham region. The highlights are positive:
- Q4 saw a positive upturn in domestic sales for companies, with 48% of respondents reporting an increase in UK sales (15% were down)
- 39% of respondents reported increasing export demand, a new gain on Q3 of 8 points
- 35% of firms have increased the size of their workforce and expect to continue to do so
- There are some price pressures on the horizon, such as increasing raw material costs, but the region is really looking to move on from Brexit
So, while there is plenty of risk and uncertainty out there, Greater Birmingham is moving onwards and upwards (long may that continue). And, while change is a constant, great businesses will thrive.
There may be the odd consumer wobble this year, but companies must continue to invest in customer experience; especially in digital. Even if the economy dips, companies have learned lessons from the recession of 2008/09. Battle hardened, they cannot afford to underinvest, as many did during those times.
Good luck for the year ahead and enjoy tackling change head on.