There is no doubt that we face a generalised increase in the prices of goods and services. Inflation is a decrease in the purchasing power of money. We need more of it to buy the things we need and want. We can pretend the system is ok and everything is fine. We can shop as usual but it is broken and until it’s fixed, inflation will continue to worsen the imbalance in the underlying system…

In an ideal world, demand matches perfectly the supply of the goods and services available. We know that nothing is perfect, so the system operates imperfectly, increasing or decreasing supply according to feedback and demand. These adjustments take time. Training people to become doctors, psychologists, nurses, builders is a lengthy process and a slow correcting principle.

Immigration on the other hand allows for our economic system to take more immediate action to respond to skill shortages and sudden changes in demand and supply. This supply principle can be adjusted to have immediate effect when needed. When immigration is not an option, we cannot use it to increase supply and therefore this system imbalance goes unchecked.

Flow is effected when the movement of goods is impeded thereby decreasing the available supply and subsequently having a inflationary pressure on price. If there are less boats and less containers, buying space to transport goods costs more and less goods arrive. If it costs more to transport goods, there’s less of them, and not enough to meet supply. Chances are these goods will go up in price.

Higher spending driven by cheap debt hits lack of supply head on, further increasing prices. Consumers feeling over confident and seeking security, target property, begin to take on more risk and further imbalance the system. House prices skyrocket. Equally, if houses cost to much to buy, people can’t holiday, and debt is cheap, renovation demand increases substantially. Builders and architects get busy, and demand for limited building supplies increases. Thereby the cost of building increases.

The workforce, having had a major covid reality check in regards to work life balance, realise that life is too short. They also notice that their cost of living is rising substantially. Perhaps they notice that they are more important in the businesses where they work, as some staff have left and finding new staff is difficult. All in all they want and need to be paid more. Hello wage inflation.

Businesses facing higher wages, difficulties in getting goods and higher supply costs, have no choice but to increase the price of goods and services. In some cases, these businesses will not be able to operate as their environment becomes unsustainable, resulting in job losses. This free’s up the labour supply, drives further consolidation into stronger business units. Around and around we go…

We live in a dynamic world of rising costs and increasing inequality. There will be winners and losers. Inflationary pressure will become more extreme until the system can calm down and a manageable balance can be restored. The system received a massive shock and it is hurting. It desperately needs to restore the flow of goods and services.

It’s not business as usual. There are limitations as to how much longer this can go on. While we work with reduced supply, we must reduce our consumption. There is a saying by Martin Luther King “if you can’t run then walk.”

When we focus relentlessly on growing our business, we lose sight of change and the risk is that we don’t have the right model and form to thrive in the emerging environment. To grow implies “growing” what we already have in play. This approach works well when environments are stable and change is slow. This approach works when the path ahead is clear and we just need to put our foot to the pedal and go!

We all know that environments are fast changing and agility is key. In this type of environment we need to“evolve”. This means our business needs to adapt to its environment as it changes. The implication of this approach may mean the introduction of new customers, products and services and the removal of non growth customers, products and services.

Growth and evolution work hand in hand together. Try and keep a constant level of evolution in play even while you are experiencing strong growth. When growth slows or is gone, this is a clear sign that its time for your organisation to evolve. This isn’t a disaster, this is an opportunity.

Businesses are not much better off. Many are so highly leveraged, it doesn’t take much of a disruption to bring the whole thing crashing down. This high risk, growth at all cost strategy, neglects sound financial management needed for disruption ready sustainability.

Our new economy needs greater flexibility. It needs to be able to turn itself off and hybernate if needed. Like a polar beer weathering the storm, our businesses and our people need to maintain the surplus needed to ride out complete economic disruption.

Our new resilient economy needs a pause button. Our economy in a pandemic creates winners and losers. Some people have income and others do not. Transactions become difficult when one party maintains an income and the other does not. What if the pause button paused everything. All transactions where paused, all liability and all costs. This equates to a “safe mode” on a computer. Life continues but nothing is at risk. The pause button sounds like a good idea but doesn’t work. We still need to eat and free food doesnt come cheap. Even if the government pays, it’s still funded from tax or debt. It doesn’t work because we still believe in a world of scarcity. We still believe in exchange and capatilism and the power of the market to solve problems and innovate. Every aspect of the system is measured and needs to strive for profit. In this world every transaction is an exchange.

The inequalities that exist within this tension system, hold the key levers of labour and capital in balance. This tension exists to ensure the system is generally productive and any surpluses go where the surpluses are supposed to go. The problem is not enough slack in the system for the majority of end users to hold power of accountability and to build surpluses. We assume the surpluses go to actors in the system who will put those surpluses to best use. However, we now need those who have the power to decide to dedicate surpluses to disruption sustainability.

What we need is a market driven by capitalism but with a new universal income foundation. This foundation provides for the essentialls of life such as food, shelter, electricity etc and is unrelated to output. Everyone can be assured that their essential needs will be catered for when the market can no longer function.

Disruption relief is the realm of the insurance industry. New innovative insurance solutions should be developed to provide landlords pandemic income cover and/or renters expenses support for example.

Ultimately, our markets need to find innovative ways to continue to operate in a world that faces viruses as a legitimate disruption. If the market can naturally adjust and innovate to adapt to new conditions, these solutions will be more resilient, effiecient and less expensive than ongoing bailout mechanisms provided by regulators. Overuse of bailouts and funding injections could have the undesired effect of stunting the evolution of our markets.

Life has been gamified by the creation of tokens in the form of money. This game has been fun and not so fun to play. Yet it has given us all something to do. It has given us status and meaning. You can say when asked “I am a builder” or “I am a Doctor” and people can then generalise about the kind of person you might be. In addition, you can generalise about the kind of person you should be.

This “structure” is comforting for the majority. It provides certainty, consistency, routine. So it is no wonder then that we all might freak out if this is going to change. We are talking about significant changes to identity, meaning, routines, and making a living. Capatilism is at the very heart of our society.

So our journey is developing a skill, finding a way to contribute this skill to society and in return society provides the resources for us to live. We will continue to adapt our skills to the needs of society. Those who do this effectively will remain relevant during the slightly disruptive phase that exists between human employment and full automation.

There are some positive signs. As long as there is a human in the loop, generally humans like to work on stuff with humans. In this case robotic and artificial intelligence will support the team to complete its project but not replace it. So curious, creative, wise humans should still be working on problems for a while. In the case of large scale manufacturing and logistics, expect less humans to be involved and more rapid disruption to jobs.

So we are talking about a time when humans have more free time. I think we can all agree on that. Instead of a 40 hour work week, we might be looking at 20 hours, 10 hours or five.

In this non working time we are probably learning, playing, spending time with people we care about, traveling, exploring and solving problems.

I know what you are thinking though. How do we place value on each other? How do we value our time? I think the answer is simple we dont. We have all been taught to gamify each other and to commericalise our time as a limited resource. In fact the game has demanded that we use the most valuable majority of our time employed in contribution and production. When this model inverts, time will not be scarce and you will not have to survive by selling it.

Here is a few thoughts about how I would approach it structurally. Firstly, I would define the various levels of the economic environment that we need to assist. After all if we implement only large scale macro projects we may miss opportunities for smaller initiatives. If we can create a break down of levels we can then come up with ideas that are appropriate for each level and therefore have more chance of being successful. For example, suppose level 1 is an individual business defined by size, level 2 is all x sized businesses in a particular geography, level 3 is all x sized businesses in particular geography and industry and so on…

We could also create a support structure that can be called upon if required which is appropriate to each level. As every business is different, no one way would solve everyones problem, therefore we need a flexible supporting structure. It could look something like this…

Is your business struggling in the current environment? Select one or more of the following as critical to your business survival in the next 6 months…

1. Business Expertise/Coaching
2. Tax Relief
3. Access to Capital
4. Access to work

So if required a business would apply to receive support in one or more of the above. The appropriate agency task force would then approach the business to address what support initiative they can tailor to the business. This system could work as a tailored support system which is applicable regardless of industry or size.

In terms of access to work, imagine if we could implement a temporary program for businesses that was the business equivalent of the dole. A business in serious trouble could then apply to join the incubator program, which supplied publicly funded projects appropriate for the business at a level which meant that business could operate accordingly to break even for the period it remained in incubation. The challenge would be to approve access to businesses that upon consideration would prove to be profitable under normal market conditions and therefore be justified in terms of support.

If you have other ideas or comments on the above, it would be great to hear what you have to say…

I love listening to the latest business experts and promotions. It seems the ultimate answer to succeeding in New Zealand through business changes every year. Without doubt the latest catchphrase used by government and business authorities is “innovation”. Be innovative. Do things differently, try new ways to improve what you do.

We are a nation of doers; we get out there and do things. Sitting around thinking about what we should be doing and how we should be doing it is slightly foreign. This is represented in relatively low levels of investment in research and development in New Zealand which are presumably the cornerstones of innovation.

There has to be a balance doesn’t there. Being innovative becomes powerful when action is taken. Not once but consistently. It is focused action that achieves results. And when action is taken on a great idea it can turn into a profitable business.

Too often in New Zealand we take action without consideration of what we intend to create. You can decide the success story of your business before it happens. Ask yourself this…Does your business know who it is? Sounds like a funny thing to ask but the most successful businesses have an identity to such a point that they almost take on human characteristics. This is an important concept. Not only for the consumer but for the people who work in the business. I refuse to use the word brand here because that implies some intangible and indefinable description of what a business is about. I mean that a business, if it is to be operating in five years time, needs to have an identity distinct from its creator. It is this identity that will capture your central idea and give everyone something to share in.

So a successful business has at its foundation a great idea, a central reason for being that drives it through the difficult times and the challenges of the New Zealand market. If the business relies upon the strength of one individual it risks failure. An individual must promote the idea to other champions that can share the load.

Resources and support gravitate to ideas of merit. If you are passionate about an idea or project others will over time come to share that passion. It helps to do this before you become tired and beaten down by the market. You need to capture the attention of others before the spark of excitement begins to damper during the storm.

Letting go and getting others involved as soon as possible is one of the key milestones of a successful business idea. If your idea is going to be realized and around in five years time then it is going to need a group of people to make it happen. These people are going to appear in many forms, some will be consumers, others accountants, marketers, lawyers, friends, and employees.

A successful business person has understood and managed the concept of risk. When we hear it out loud most people take a step back mentally and go “hang on that’s something I shouldn’t be dealing with.” If you talk to anyone that’s made money ask them to recount the instances and decisions that got them to where they are today and most will describe that they assumed risk to get ahead. If risk is holding you and your business idea back then deal with it now before it becomes too late.

I never intended to give you a sure fire way to take an idea from concept to success in five years. Neither have I tried to cover all areas of this topic. However, I do want to make sure that you leave with one consideration and that’s if you have an idea and you are committed to doing something about it then see it as clear as you can and make it real not once but every day. And I promise you, if you can do that each day will be a step ahead of the last.

Consider doubt logically. Deal with it appropriately and then move on. There is one direction forward. Relentlessly pursue but be flexible in your plans. Bend when its time to bend.

Seize the smallest opportunities and build momentum. Gather the tools you need along the way. Start now; refuse all that would slow you. Treat yourself with respect, be humble, prepared to make mistakes and to forgive. There is a long road ahead.

Breathe life into your company; breathe life into your product, your services. Create it, so your people are your family and your customers belong. Wave your flag high and be proud of who you are, not who you are not. Live as your consumers live and know them well. Most of all, live each day, you are so much more than just one dream.