There’s been a lot of talk lately about doing business or for that matter the challenges in doing business, in the current geopolitical environment.
I see conversations are marked by anxiety as we try to understand the impact of tightening credit and uncertainty of commodity prices amidst rising international conflict and geopolitical risks. As business leaders, we tend to analyse and worry about how the current environment will impact business growth, or how it will create business dystopia.
Yes, these concerns are valid, but they overshadow one principle I've always believed in: balancing passion with caution.
Moody's research expects the global economy to remain fragile in 2020 as risks to credit conditions rise. Trade uncertainty will continue to disrupt supply chains and weigh on investment decisions.
In such an environment, managing your passion while exercising caution is the key. The ambition to grow in this environment must be tailored to sustain over time. Businesses need to be run on the tenet of being profitable and sustainable.
Be it locally or globally (Forever 21), the biggest challenge is understanding the difference between genuine ambition and reckless growth. From start-ups to age old businesses, creative ways of buying growth or delivering unrealistic profits (which initially all of us tend to believe) result in them facing hard times. Credit-driven or private capital funded growth often leads to easy and wrong business decisions. Once the source dries up, businesses are not sustainable to run on their own. They crumble like a pack of cards.
To think of it, how many companies from the boom of the mid-2000s persevered? How many companies from the disruptive 2010s have been able to stand their ground? Disruptive thinking is great, but it also makes us look at age-old enterprises as something to raze rather than respect.
Southern Petrochemical Industries Corporation Ltd. (SPIC), one of the leading businesses of AM International completed fifty years last month. The reason the company has endured is that it has remained focused on doing the right thing, however tough the situation. In the past decade, my focus was to ensure that the company returned to normal operations through the right conduct. Fiscal prudence, measured risk-taking, and ethical conduct have been the key pillars in this journey. Both in good and bad times, one’s moral and ethical compass needs to remain steadfast and mustn’t change to suit the convenience of situations.
Additionally, entrepreneurs should focus on building a fair and honest work culture. A great team doesn’t let the organisation fall in difficult times due to overconfident fiscal missteps taken during good times. In case the organisation does face bad times, their indominable spirit is able to resurrect the situation. This calls for leaders who are unwavering in their principles and faith to run businesses with a long-term vision.
At the end, perseverance with passion and caution is essential for longevity in business. After all, businesses are never created with an expiry date in mind.