SURVIVING A SLOWING ECONOMY || One Thing You Can Do in 2024 to Keep Your Business on Track
If you thought the business environment was tough last year, you’ll want to strap in for 2024.
Mainstream media has been touting headline numbers such as the latest jobs report, which shows the job market is still tight. However, if we look beyond the headline number of 216,000 new jobs, there were 70,000 part-time positions, meaning people are taking on second jobs to stay afloat. Of the new jobs added, 38,000 were in health care, 52,000 were government jobs (+3000 compared to November), and another 40,000 were in leisure and hospitality (mainly food services and drinking places that faced labour shortage issues for the past few years because no one wanted those jobs after the pandemic). Meanwhile, the number of people holding multiple jobs increased by 222,000 thanks to inflation.
Companies also announced significant layoffs in December, with Google cutting 30,000 jobs, Spotify reducing its headcount by 17%, and many more companies citing restructuring for the long-term as they announced layoffs during what was supposed to be the most wonderful time of the year.
This data shows that, in reality, the economy may not be as robust, or we aren’t headed for the coveted ‘soft landing’ everyone has been hoping for. The stock market reflected consumer disappointment in the past week with sizeable drops. As a result of the jobs report, the mirage of rate cuts retreated later in the year.
With a slower-than-anticipated path to economic recovery, what should you concentrate on to ensure your business is on track? Numerous challenges are widely covered in the media, mainly how AI is expected to impact businesses for better or worse. However, contrary to focusing on predicting the latest trends and how they may turn out, I would argue that you should hone in on the things that never change.
I am reading Morgan Housel’s new book, Same as Ever, which shares twenty-three stories on things that never change. For example, customers would never want higher costs and slower shipping, so focusing on increasing the performance and efficiency of these output metrics will always be something customers would be willing to pay for. If we look beyond the features and functions of any business, the bottom line for the end consumer is always: did it save me time? Is it easier to use (compared to other alternatives)? What is the value for money?
Customers don’t see the time and effort your business invested in setting up new warehouses, refining the logistics process, and the new fleet of trucks you bought to delivery on faster, better service.
The end user doesn’t care if you use AI to deliver your services or products—it’s just one of many inputs you see on the operating side of the business; consumers care about the final result because the million-dollar question is, what’s in it for me?
Here’s an example to illustrate how the consumer only sees the result and not the effort you put in.
The review: “I was pleasantly surprised that the sofa arrived much sooner than expected, and the assembly instructions made it easy for me to put it together myself!”
Your input: Your operating team spent six months setting up a new warehousing agreement in three local regions to speed up the delivery times to key urban centres across the country. You also invested three months in vetting a design firm to work on revamping the assembly instructions and dedicated two people to write the new instructions.
Do you see how your efforts resulted in a product benefit that a consumer will always care about? Speed, convenience, and ease of use.
Your diners don’t see all the hours you put in to prepare one dish.
The review: “I loved everything on the menu because all the ingredients were so fresh. The craziest dish was the triple-layer dessert that tasted like chocolate but was actually made out of chicory root. Mind blowing.”
Your input: You wake up at 4 AM to head out to the local farms to select ingredients for the day’s menu. You arrive at the restaurant at 5:30 AM and work until 8 AM to prep all the ingredients for the evening’s food service. You check on the chicory root, which you picked out two weeks ahead to infuse it with the right flavours, and which will require another three hours in the steamer before it’s ready to use as an ingredient in the dessert.
In the second case, the customer never saw all the work that goes into selecting and preparing the dishes. They only experienced the result—the taste.
Focus on the factors people will always care about instead of chasing after trends, and you have a better chance of surviving the slowing economy.
