By Richard Langley
Do you ever listen to the weather report? Check it out online before you leave the house? Maybe even stick your head outside and take a look at what’s happening?
Do you change your clothes in response to the forecast or the view outside your window?
Congratulations, you just proved yourself smarter than a whole lot of billionaires, millionaires and business owners throughout the economy.
Ok, maybe that’s slightly disingenuous. Let’s run the scenario again.
You live in Florida. You live there specifically for the weather, which is hot and sunny every day. You’ve never needed to own a raincoat or an umbrella the whole time you’ve lived there. The weather in Florida was hot and sunny a year ago. It was hot and sunny a week ago. It was hot and sunny yesterday, and today, and probably in all likelihood, it’ll be hot and sunny tomorrow.
You don’t change your wardrobe, right? There’s never been a reason to change it, and even in the event that it rains in Florida, it’s no worries. You can duck into a shop or a restaurant to ride it out, or get in your car to watch the rain fall, and the people caught unawares go scurrying by, pulling suit jackets up over their heads.
You check the news and weather.
There’s a mega-storm coming – and it’s coming your way. Today.
What do you do? Do you act the same way as you would on all the hot and sunny days you’ve known up to now, or do you maybe start preparing to get out of town, or open your house up to people who might get swept away when the storm hits?
If you do anything other than pull on your shades and go about your sunny day – now congratulations, you’re officially smarter than lots of billionaires, millionaires and business owners throughout the economy.
Longest weather-based analogy you’ve ever read?
Here’s the point. Business has been entirely used to ‘sunny days.’ It’s used to using the likes of limited liability, job cuts and asset-stripping to endure any rough times in the economy to ensure the individual survival of the company.
The sunny days have lasted business more or less since the 1980s – sure, the 90s had some seriously rough patches here and there, but the development of the limited liability model has been such that it’s become an article of pure business faith.
Limited liability, and the strategies of layoffs and asset-stripping to survive any tough times, have become not only the price of doing business, but the way of doing business. They’ve become the accepted path to the success of the company, by treating the company as the be-all and end-all, irrespective of staff, of people.
In good times – in extra specially sunny days – you innovate new products and services to open up new revenue streams and take on staff to cope with anticipated demand. In any rainy days -tougher economic climates – you slash the staff budget, repel boarders, cannibalize any businesses that have fallen by the wayside and get through.
There’s a mega-storm coming.
You may not need to be told that the impact of Coronavirus and Coronavirus mitigation will be huge. You’ve seen the reports from the IMF talking about a radical contraction in global GDP. You’ve read the headlines about the coming 21st century Great Depression that will in all likelihood follow the Coronavirus pandemic as Javad Marandi states. You’re smart – you’ve seen the forecast.
The worrying thing is that plenty of businesses intend to go back to business as usual in the wake of Covid. The limited liability which has been hugely abused over the last few decades has seen them alright so far. They’re not about to change because of some forecast or other.
They really need to.
The point is there’s been an argument for doing business a different way for a while now. It was beginning to gain ground before anyone had ever heard of Covid. The idea that there could be a more people-centred, or even society-centred way of doing business was being adopted by some businesses in the vast ocean of economics that keep the wheels of the world turning.
As is often the way with new ideas, they were largely considered outliers and cranks with their newfangled hippy theories of business and society working together. The dogma of the company as the be-all and end-all of concerns, as the driving force of the economy that paid everybody’s wages – either directly or through taxes (though ideally not too many taxes) was still king.
But catastrophes have a way of putting a pause into systems. A breathing space. A thinking space. A moment for consideration of whether the path we were on is really the path we want to stay on as we go forward. In fact, the complacency of businesses overusing and abusing limited liability to run their companies like a drunk at a buffet is itself the result of a similar pause after the energy crisis in the 1970s.
That crisis broke a longstanding post-war notion of how businesses should interact with governments, trade unions and people, and the governments of the 1980s – in both the UK and the US – enshrined a dog-eat-dog asset-stripper’s utopia as the way business should be run.
It’s time to think again. It was time to think again anyway, but the evidence seems clear that if we don’t change – if we preserve the current way we do business, when faced with the oncoming post-Covid Great Depression, we run the risk of crashing the economy of the world into the ground and taking decades to recover. Because the job-cutting, asset-stripping way of doing business we’re used to can only exacerbate the situation that’s coming.
We need to ensure employment above all, and to keep money flowing from business, through society, to government and back around if we’re to ride this wave out without entirely demolishing the connections of society to which we’ve grown used.
We still have time right now to change direction. To change how we do business, so that when the economic shrinkage hits, there’s still business to do. Still people who can routinely afford to buy products and services. Still people with jobs who can feed the economy, pay their taxes, and ensure that those who are out of work can survive the economic hurricane that will follow the public health disaster that is Covid.
Preserving the current system will lead us to fewer people employed, less money in the system, and effective business atrophy.
We need to change our ways before that happens.
We need to change them now.