Doing business in the year of the moose
How to respond in the face of the unpredictable
I have a tradition of starting out each holiday with a nice trail run. I’ve been doing this on every holiday for more than 20 years, and 2017 was no different. I hit the trails around 630 a.m. with my trusty companion, Buddy. We embarked on a snow-covered single path track heading into the wilderness outside of Steamboat Springs that I’ve run hundreds of times. There were no sounds other than the soft crunch of snow beneath each step. The sun was just starting to peak up behind the mountains.
Since I was alone with my dog and it was early, I was very aware of my surroundings, scanning for wildlife to ensure I didn’t have a close encounter. As I rounded a corner, I saw a large moose about 15 feet below me on the trail. Having encountered moose and a myriad of other wildlife on my adventures, I knew what to do.
The rule of thumb when encountering most animals is you want to be below them so that they don’t feel threatened by you (moose also hate dogs since they view them as a predator like a wolf). Unfortunately, there was no way to get downhill since there was a cliff and considerable snow. He turned around to face me and check me out, then gave me a head nod with his huge rack as he moseyed down the hill. He seemed like a pretty chill moose and wasn’t disturbed by my presence; I gave him plenty of room and headed on down the trail after he was out of sight.
I continued about a mile and a half past the moose incident and turned around. I was scanning the trail ahead to ensure I didn’t see him. As I rounded a large boulder, I encountered the moose again. The friendly chilled out moose I saw before suddenly emerged from behind a rock, and without warning, began to charge me.
I stood there bewildered as a couple thousand-pound moose was running with his antlers down towards me. I had less than a second to react. Although I knew what to do in a moose encounter, I had no real option other than to dive into a snowbank behind a tree and hope for the best. This was one ticked-off moose, to say the least. Fortunately, I was okay (although I looked like a snowman) but very surprised.
This was one of my most “exciting” starts to 2017 (definitely got my blood moving) and very fitting for the year ahead. Typically, if you are downhill from an animal and give them space, they go on their merry way. This moose reacted opposite of what one would expect, and his personality totally changed from the first encounter with no warning (moose are known for being moody, but this was crazy).
The moose embodies not only the unpredictability of the year ahead but also the business risks we each face as a result.
Whether it was the market reaction from the election, the fallout (or lack thereof) of Brexit, or a myriad of other events, the markets ― just like the moose ― are not reacting even close to traditional norms. Businesses thrive on predictability since many decisions are long-range ones: Should a business outsource production, should a new plant be built, should you hire more people?
These decisions take time to implement in anticipation of the future benefits. Businesses are faced with lots of decisions and very little answers as to what the future may hold. Just as my moose encounter highlighted, the best planning in the world can go radically off the rails quickly due to forces outside your control
What is a business to do in the year of the moose? Almost every economist has missed the recent economic gyrations, so all the planning in the world will be unable to predict what this year has to offer. So what should you do? As you try to plan as best you can, ask yourself the following: How can the plan go wrong? What outside factors could change? What are you going to do when there is change?
The planning process needs to be a bit different this year due to various factors that are unknown. For example, in my business, I am minimizing any non-critical capital expenditures therefore minimizing my fixed costs. This will give me the ability to react quickly based on what is actually occurring.
With all this uncertainty, opportunities and pitfalls are also bound to occur, so I am making sure we have ample liquidity as well to sit on the sidelines if needed until the dust settles and a clearer picture emerges. We are also evaluating our portfolio to see where we might have risks if there are radical changes in rates, values, etc… In a nutshell, business that will succeed in the year of the moose must be more nimble than ever to be able to react to the “what ifs” that are bound to occur.
The interaction I had with the moose, albeit scary, was an excellent guide to 2017 and forced me to reevaluate my strategy for the coming year. This was also a good reminder that no matter how careful I am and how well I planned, sometimes the only course of action is to trust your gut and just get out of the way until the dust settles.
Hopefully, none of you will have the same personal experience with a moose or other large animal charging at you, but the takeaway lessons can help you achieve success in the year of the moose. I hope each of you has a safe, happy, healthy and prosperous new year.