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History Always Repeats…..

My Strategic Management lecturer in College insisted that very little in business, economic and weather cycles is completely unpredictable and businesses ought to be able to plan for most eventualities, no matter how rare.  I have recently been thinking how right he was and how poorly many businesses manage that.  For instance, I have been working with a company that has had to lay off a large number of staff due to a drop in commodity prices internationally.  One of the senior managers was mortified that he had recently employed a number of recruits, leading them to believe that they had a job for many years.  That’s what the company were telling us, he told me.  And yet, when I questioned him about his experiences of the industry, he could cite at least three previous international commodity price drops that had resulted in large-scale layoffs.  So the present issues were in fact, not surprising, to anyone with industry experience.

A similar thing happened five years ago when the area I live in experienced a long dry summer and a resulting drought for a couple of months.  Many farmers were caught without enough feed for their stock and forced to sell at low prices.  There was a call from some for Central Government to offer subsidies for this ‘unpredictable’ event.  And yet, I could remember many similar summers a number of years previously (I’ve lived around this area on and off, most of my life).  Sure enough, a local agricultural paper ran a story afterwards about how farmers had, in past times, grown extra produce over early summer to tide them through the following drought, but most had stopped bothering in recent years as the weather pattern had changed!

So how do experienced managers get caught up in the belief that things have changed so significantly that external forces will not repeat?  Perhaps it’s a human condition that we want to believe good news, or perhaps we just get excited by leadership vision or good times, and forget the past too quickly.  Thinking strategically requires broad consideration of external factors, and past events and trends can help us predict more accurately possible future scenarios.  The people who can remember and relay some of those stories have a valuable role to play.  A bit of research doesn’t hurt either.

A free report showing you how to think strategically is available for you at http://www.strategies-direct.com

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