“Education is the best economic policy there is.”
What’s Your Perspective?
So much depends on attitude. Alberta’s economy was cut down when oil prices tumbled. It’s growing again, but modestly. And the sectors hit hardest, like energy, aren’t making the cavalry charge back to prosperity.
In 2017 and beyond, most forecasts point to a slow rebound. Whether that’s good news or not depends on your perspective. If you haven’t reduced your spending in the last 2 years and are pacing your office waiting for the boom times to return, modest growth is a bitter pill.
But, if you’ve cut all the expenses that the customer is not willing to pay for, then you’ll probably have trimmed enough waste to remain in the black, however painful it’s been, that modest growth could all go to the bottom line.
In other words, did you get brutal with your internal waste when oil started to plunge, or did you hold onto the expense accounts and are just waiting for the boom to come back?
Oil & Jobs:
2 key indicators for our economy, jobs and oil, tell the story. We’ve had some very strong jobs reports, but the dominant trend is caution. The sheer volume of layoffs in the past couple of years have changed Alberta’s job market and our consumer buying power in a fundamental way. We got used to the “boom” being normal, and things are not going to return to normal anytime soon. While that’s good news if you’re hiring talent, it’s bad news for selling pretty much anything.
The World Bank forecasts that although oil prices are heading up, it’s a long, sustained road upwards. Their forecast doesn’t have crude crossing 470/ barrel until 2025 and no $100 marks in site. The U.S. Information Administration forecasts that a barrel will average $55 in 2017 and $57 in 2018.
While a long way from the low of $26.55 it hit in January, 2016, it’s not enough to bring back “the boom.” The consensus is that our economy is growing like a turtle: slow and steady.
While growth is forecast, it’s not guaranteed. Events out of our control, from El Nino to Trump, can be disrupters. Also, while oil is on a slight upswing, big industry lags a couple years behind. Big projects planned for 2016 are winding down, but new ones aren’t following.
What You Can Do:
You can’t control the price of oil. But you can control the money that’s wasted needlessly in your company every day. Oil prices don’t sink companies; the 8 Wastes do. (Intro To The 8 Deadly Wastes). If you commit to eliminating waste, you’ll see the impact.
Attitude guides actions. Instead of “I’ll weather this storm and make it up in the good times,” consider “I’m going to find out what my customer isn’t willing to pay for and eliminate it.” Perspective starts with you and percolates down to your team and company.
Cutting waste doesn’t mean firing people. From inefficient transport schedules to machine downtime from lack of regular maintenance, waste is everywhere. Devote a portion of each day to finding it and pulling it out like a weed.
Being brutal with waste isn’t about dramatic actions. It follows the same pattern our economy is taking: small changes that, when sustained cumulatively over time, add to big cost savings. It’s the art of discipline, patience and, most importantly, perspective.