Navigating the Waves of Uncertainty: A Blueprint for Businesses and Families in 2024

Uncertainty. The word alone can be unsettling. Most of us are uncomfortable with certainty. We can count on the sun rising. We trust that our alarm clock will go off at 7:15 every morning, with just enough time to shower, brush teeth, get dressed, grab lunch and pile the kids into the car to drop them off at school so we can be at work just before 8 AM!  Consistency in even the simplest things makes life easier and more manageable. As a parent, uncertainty breeds stress. We cannot be certain our children will pass the test, get a hit (or three!) at their baseball game, make the right friends, or that they’ll get home safely on their bikes after playing at a neighbor’s house. Think how easy life as a parent would be if our children were perfect 100% of the time!  How much easier would our jobs be if there were never any surprises, never any jobs that had to be rushed, never a surprise visit from the boss on Friday at 4:30 PM with a “five minute” project?! Imagine if demand, margins, and salaries were always strong! 

Of course, what I’ve described is a fantasy land. For those of you who are parents, you know that your children will fail along the way. We cannot control their actions and thoughts. They’re going to strikeout with the bases loaded, they’re going to fail a test or forget to do a homework assignment. They might even pick a friend who’s a less-than-stellar influence. We all know surprises will happen at work. Once in a while we’re going to have to stay late or hop on a plane to a cold-weather state in January. We hope and pray health issues don’t arise, but they often do. Unexpected expenses have a nasty habit of popping up just when our savings has just taken a hit.  

So, why is 2024 a time of uncertainty for businesses? I addressed most of these uncertainties in the November issue of the Hardwood Herald. Interest rates—what will the Fed do? Many sectors will be directly impacted by their decision(s). The issues at the border. War and conflict in multiple theaters. An upcoming election. Food prices continue to impact working families’ budgets and savings. Labor shortages in healthy business verticals and massive layoffs in others. Massive interest payments on national debt. And on top of these (and many, many others), predictability of certain industries has been drastically reduced post-Covid, as long-time predictive markers have been rendered almost useless. As everyday Americans, all of these are out of our direct control. How do we deal with higher than usual levels of uncertainty? 

Uncertainty is addressed by daily preparation. We teach our children how to recognize and react appropriately to dangerous situations. We instill discipline in our kids to ensure their homework is done on time and they are prepared for the upcoming test. As employees, we manage our time and projects, getting ahead in case of unexpected requests, tasks, or travel. We prepare for tough financial times by saving—foregoing that daily expensive coffee or that impulse purchase and sticking to the budget. One can make good daily choices around diet, exercise, stress, and sleep in order to give one the best chance at good health. 

So, what is a business to do? The answer has two parts. First, business should get “back to the basics.”  Oftentimes, these basics are called “blocking and tackling.” It sounds a bit cliché, but fundamentals like dedicated customer service, quick response times, and adhering to deadlines and due dates should never go out of style. The nitty-gritties of consistent quality of product or service, on-time delivery and quick and concise resolution of issues pertaining to quality should be a firm’s daily focus. Week-to-week or month-to-month adjustments to forecasts for raw material purchases and production planning can help with long-term uncertainties to ensure inventories levels are finely tuned to manage demand and the current borrowing rate. 

The second part of the answer is to accept and deal with the fact that we cannot control the macroeconomy. As an analyst, I am contractually obligated to have no feelings or emotions at any time. Of course, ambiguity can lead to stress, especially for those like me who have control issues!  One must accept there are events we cannot stop or start. We can recognize we cannot control what happens but we can control our reaction to those events. And, as mentioned earlier, we can be proactive by establishing great daily, weekly and monthly habits at home, with our kids and at the workplace.  

When COVID hit, executives at Columbia knew how to react from the lessons learned from the housing crash. COVID was a tough time, but it taught businesses how to be prepared for mass volatility—especially in supply chain. If another black swan event occurs, business can use the learnings of the past to survive and thrive. And if no black swan occurs, the renewed focus on the basics will launch dedicated companies into a second half of the decade that is expected to be rather favorable. 

Here’s to a year of blocking and tackling, good health and happy families.