It has replaced “cautiously optimistic” as the description of choice for business leaders trying to describe their assessment of what remains of 2023 and beyond. The recession that was predicted for the first half of the year has so far failed to materialize.
However, after disappearing from news analyses and pundit predictions over the summer, the specter of a structural downturn is popping up once again. The combination of still rising interest rates, stubbornly persistent inflation and the recent revival of student loan payments all threaten to stifle what little consumer spending there’s been this summer.
Whether it’s a hangover from the near-constant-change of the pandemic era or just the sheer unpredictability of an economy bent on defying past precedent, the ability to look beyond the most recent week or the most recent month has all but disappeared from people’s forecast vocabulary.
That’s one of the things that was abundantly clear at last week’s Premarket.
Where past years’ conversations would be peppered with “cautious optimism” about the coming year, the talk this time was much more constrained, as were the forecast windows. After dozens of conversations, this comment could have come from any one of them. “The last week of August was pretty good, and Labor Day weekend was alright, so hopefully we’ll see things picking up for the rest of the year.”
In the face of an increasingly complex and rapidly changing series of variables disrupting the furniture industry, the traditional and decision-making paradigms have become less reliable. Where business leaders once could select from a series of precedented-tested choices that would deliver predictable results, the pace and complexity of change have made that far more difficult.
Take a minute to reflect on the number of times you’ve read the word “unprecedented” in relation to an economic, sociological or technological event over the past few years. Certainly, the media (of which I’m a guilty member) are prone to hyperbole at times.
However, the number of instances where a historical precedent was objectively absent and leaders confronted a truly new challenge has become more prevalent and is becoming more frequent.
It is an expression that emerges when analytical tools break down and decision-making paradigms fail to meet the complexity of new circumstances. The furniture industry has confronted that situation in recent years, and the combination of structural changes existent before the pandemic and accelerated by its fallout require new decision-making structures and new tools to deal with an increasingly complex environment.
The buying and selling of furniture, which sounds quite simple and direct, is being redefined by an increasingly complex and disparate series of economic, geopolitical, demographic and sociological factors.
Building the tools and skills required to thrive in this new environment means embracing and managing change. It means finding time in the day-to-day bustle to stop, reassess and think strategically about the long term and what it will take to get there.
The news is filled with companies that could not do this, whose efforts to achieve short-term gain quite literally cut them off from long-term survival.
Hopefully, fewer will choose that path, and more will take the time to for longer-term assessments.