The pace of change – among and between societies and states, and technologically – continues to accelerate.
Globally, multinationals will be impacted by the volatility and the broadly negative trajectory of US-China relations. More companies will pursue a multi-local strategy in response (i.e. self-contained value chains in China and its allies, and the West). And as the Chinese and US engines of growth slow, global economic momentum will decline, leaving vulnerable countries teetering.
As the US election cycle gains pace, partisanship will complicate America’s leadership economically and democratically. The states will gain more power which they will apply in differing policy and regulatory directions.
A headwind to this global turmoil will be the quiet strengthening of Western alliances.
Geopolitical tensions are spurring regionalisation, most notably in energy markets. Supply chains are shrinking.
Power continues to fragment, within states, corporates, and societies, which increases complexity. Priorities depend on circumstances and location – climate, culture, food, energy and/or racism. Amid this cacophony, as economies slow, expectations will rise for non-state actors to take positions and act.
Populism and authoritarianism took a hit in 2022, but democracies are messy. As the US, India and South Africa warm up for their 2024 elections, politics, polices and rhetoric will become more fractious and extreme, and progress will slow. Meanwhile, events in Iran and Taiwan could create major reverberations.
Strategies to succeed in 2023
Five strategies in 2023 to facilitate success, to manage the opportunities and challenges occurring in this dynamic context, are:
1. Keep your options open: pursue policies that open more doors than they close and diversify where possible. True for supply chains, for expanding customer and supplier base, for exploring new markets, and for growing your and your team’s skills.
2. Think local: the prominence of regional and local influencers are rising. So to understand the best strategy in any context you have to grasp the specifics. Global policies and cultures are unlikely to resonate well.
3. Trust your people: to be effective in an increasingly disparate and volatile context, where speed of response can matter, devolve power for decisions, actions and communications to the furthest extent possible. The absence of trust creates a hidden tax.
4. Communicate more: in crises, effective communication is often the predictor of successful or failed strategies. Communicate more to your people, at all levels, repeatedly. Define your principles and values clearly so that all understand your guiderails and goals.
5. Don’t try to be all things to all people: as societal expectations for business steadily rise, identify how and where your unique strengths can add value and focus there.
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