Pivot, Change, and Adapt

The government can argue amongst itself if we are in a recession or not, even going so far as to change definitions for political reasons, but none of the theatrics negates what the average American family is experiencing. Prices are rising on every good and service, wages are flat, household budgets are busted, and credit card debt is growing as families look for ways to make ends meet. Inflation is real and it is impacting everyone.

There is a level of fear, uncertainty, and doubt on mainstreet that is uncommon. This fuels populist movements on the far left and far right of politics. It is human nature not to like change and when great turmoil, especially economic, enters the equation people search for stability, answers, and whom to blame. Many times the answers are hard to come by.

I find it helpful to analyze the big changes around me to see if I can see trend lines and how others are adapting. Are there areas of opportunity? What can we do to make the best of the situation and find an opportunity amid the chaos?

Maintaining the status quo in times like these at best ensures you miss a great opportunity but many times the worst-case scenario for businesses and individuals is financial ruin. If the largest companies in the world are quickly changing operations and making pivots to adapt to the new economic climate everyone should take note.

Big Retailers Make Operational Changes and Pivots

Amazon is leading the way in making big pivots and changes. Since its start, Amazon has shown resilience and the ability to try new things, pivot, adapt to new environments, and make big changes when necessary. As it tried new things, its failures are legendary. They failed big with WebPay, Amazon Wallet, and the Fire Phone, the latter costing over $170 million. Jeff Bezos is famous for creating a culture of taking big risks, trying to do really hard things, and not being afraid of failure.

It appears that Amazon is following advice from NYU Professor Scott Galloway who has said, “The key to accelerating your business in the new economy faster than your competition is the embracing of new mediums and technology.” After pivoting to meet market needs during the covid pandemic, it appears that Amazon is pivoting rapidly into new areas of business while shedding what appeared to be areas that had previously shown some promise. Amazon has recently acquired technology-enabled companies OneMedical and iRobot giving it a foothold into the on-demand healthcare and prescription space and furthering its reach into household devices. At the same time, it is talking about exiting Amazon Basics where it had invested billions but where this line of business was less than 1% of its total revenue. In short, Amazon took stock of future opportunities of incredible growth and pivoted there while also cutting lines of business that had the potential to be a threat vector from regulatory agencies and did not have near the growth opportunity to warrant the risk. Having the courage to make moves like this is how a company like Amazon helped create an entirely new industry of “Cloud Computing” which is valued at $368 billion global industry that did not exist a decade ago and which Amazon has a 40.8% market share with AWS. It’s how a company that started as a book retailer is now considered one of the largest logistics companies in the world with 97 airplanes and over 100,000 trucks. They pivot, adapt, and change always moving towards opportunity and getting out of lines of business that no longer make sense.

Amazon experienced negative cash flow for the first time this year and free cash flow is negative $23 billion year over year. As good as times were during the covid pandemic with record growth of e-commerce the after effects and the current recession is equally as bad even for big well funded companies like Amazon. They are being forced to make adjustments quickly and pivot to a new and different future. The speed of change is increasing and companies are working hard to adapt, pivot, and change quicker than ever to stay relevant and in business. How should the average American family respond? What are the proper steps of equal importance for families to make to look for new opportunities amid the changes also impacting them?

A Changing Work Environment

If inflation wasn’t enough to put stress on the American family work is also rapidly changing putting the very income and livelihood of families at the center of the most radical workforce changes in generations. Companies are downsizing and laying off people in record numbers in 2022. A stagging 51% of companies surveyed plan to lay off staff in 2022. Those who have already done so include iconic companies like Amazon, Microsoft, Ford, Peleton, Tesla, Shopify, Google, and Facebook. More will be coming. People and companies both learned a lot from the pandemic “work from home” trial run. Many people love it and don’t want to return to work. Many companies see the benefit and cost savings of going virtual. Many of these companies are in the knowledge and management sectors colloquially known as “white collar work.”

A debate rages on both ends of the spectrum. Those who want employees back in the office making it easier to manage and oversee operations and productivity and those who want to work from home who see the cost benefits and also have enjoyed the work-life balance it can bring. So much depends on the type of work being done and the employee in question. Due to rising costs and stagnant wages, an entirely new “gig” economy has been created over the last decade to help provide jobs and careers for many who need to piece multiple streams of income together. Many people participated in the gig economy to make ends meet while others did so for the freedom it provided. When done right this can provide great additional income along with flexibility and freedom. During the pandemic, some enterprising employees took this to greater lengths which have caused some backlashes from large companies like Apple and Google. Some of their employees are trying to work multiple “full-time jobs” from home in a situation known as “Over Employment.” This is creating a debate on workplace ethics and causing companies to update rules and HR handbooks requiring transparency of such engagements and behavior.

The issues are many and include benefits and downsides for both parties. For those who like the “work from home environment” the benefits accrue to both the individual and company. Employees like the work-life balance, lack of commute, and cost savings. Companies have learned how to manage staff and productivity, and the cost savings can be enormous. This has led many companies to reduce office space requirements thus saving overhead as they allow staff to work from home. Lyft is a perfect example of this cost-saving shift.

Furthermore, companies have take this a step further and have been leveraging outside organizations known as professional employment organizations (PEO) to reduce costs further outsourcing human resources (HR) services and benefits. These cost savings have sped up as companies continue the outsourcing to include other functions like legal, finance, warehousing, customer service, web development, and tech. More and more once central and critical functions are now able to be outsourced to organizations that specialize in a key area. This helps a company keep fixed cost low while moving to a manageable variable cost model which allows it to scale up and down as they need based on market conditions. What functions will be next?

Obviously, changes and advancements in technology like Zoom, Slack, and Microsoft Teams are helping to bring remote teams together in ways never before imagined. Collaboration and work can now be done anywhere in the world with a high-speed internet connection. Web3 blockchain technologies are also powering this revolution with new tools and resources that will help this work-from-home transition. With all the benefits technology is now creating a global marketplace. An employee in the heartland of the United States is no longer competing for a job with a local resident, but now in the global marketplace, they are competing with people from all over the world. This will cause compensation compression in many areas as workers from remote parts of the globe will be willing to work for less. It will be incredibly important to continue to add education and skills while building a strong resume and a personal brand will help maintain value in a competitive marketplace.

Employees in this new economy will be able to work from home and have benefits previous generations could only imagine, but they will also have new stressors like competing against a global marketplace and AI that will try to do their work better, cheaper, and faster. In this new economy, you better be learning, adapting, and constantly adding new skills or you will find yourself replaced quickly. It has been said that “Being intelligent and being valuable in this economy are two very different things.” All employees need to know what it means to be valuable to a company, how to provide value, and how to constantly make themselves more valuable in their careers. One thing is for certain, the realm of work has forever changed and this is adding further stress to an already stressful situation.

We all can obsess and overthink about all that is going on, and nothing will change, or we can predict our future by the plans we make and the action steps we take. Planning with action predicts our future. If major companies are being impacted by this recession and are making new plans to pivot, change, and adapt, we must do the same.

When I speak with people who are navigating the complexities of this environment and under stress due to all the myriad of factors we all are facing I can tell how they are doing and if they are on a path of success by asking four key questions.

Questions that will predict your future

1. Where is your focus? Where are you deploying your limited time and energy?
   1. You must focus on the things that you can control. Are they the most meaningful and productive things for you to focus on at the moment? Your time and energy are your most valuable resources. Are you spending them wisely? What results is it producing for you?
2. How are you disrupting your current habits and routines?
   1. Inertia is powerful. Your habits and routines have given you what you currently have. To get something different, you will need new habits and routines. You change your life by simply changing habits.
3. Do you want to be loved, or do you want to win?
   1. Many people don’t want to face the truth. They want people to tell them what they want to hear. People who want to win ask tough questions and want to receive demanding, transparent, authentic answers so they can make adjustments and succeed in life. Not dealing with the uncomfortable truth may be comfortable and also holding you back from your biggest successes in life.
4. Do you have a scorecard? What is success for you? Are you winning or losing?
   1. Most people don’t know what success means for them. They don’t have a goal, and thus they don’t know if they are winning or losing in life. It would be best if you had this clearly defined.

As we navigate this, it is essential to remember that it is never too late. It is never too late to focus and have relentless energy towards a goal. Jason Calacanis says, “Incredible audacity trumps prior blunders.” Regardless of what may have happened in the past, we need to have incredible audacity in our planning and action so we can predict our future even amid the uncertainty, fear, and doubt of this recession and all the chaos that surrounds it. We are the best predictor of our future…nothing else.