A famous quote attributed to Winston Churchill suggests we should “never let a good crisis go to waste”.
All the uncertainty relating to tariffs, and the possibility of new governments with new directions and new policies, can be viewed as such; it can be seen and interpreted as a crisis, and when deemed a crisis, it can be the catalyst for a lot of change. And a lot of change is overdue.
In stable times, manufacturing businesses run with predictable efficiency - not necessarily great efficiency, but relatively predictable and sufficient to maintain stable business levels. As most of us are aware, as a nation, our overall productivity levels are comparatively low, and they are falling. The tariff challenge is our wake up call and as Churchill suggested, the crisis we shouldn't waste.
Two things I believe to be true at any time:
change doesn’t come easy at any time and is often most unwelcome in good times, and,
its far better to focus your energy on things within your control than on things outside of your control.
With these two things in mind, I’ll share some thoughts and perspectives from several groups of business leaders that I consider thought leaders. I have the privilege of chairing several chapters of Innovators Alliance, a peer-to-peer network of CEOs and founders of small and medium size businesses in Ontario. About 50% of them are manufacturers. “Uncertainty” is not new to entrepreneurs of private enterprises; they know there are very few guaranteed or assured outcomes, and success is not achieved by mitigating risks but by taking them; not by evading challenges and avoiding problems but by facing them and solving them.
Here are five key takeaways:
Focus on the things you can control and don’t waste energy and time on things you have no control over. It’s sometimes easier to say than it is to do, but emotional energy spent on things outside of your control is time and energy not spent on creative, constructive and positive things you could have done to improve your business.
Productivity is a challenge regardless of tariff uncertainties, and there are great efficiencies to be gained through the effective deployment of technologies – in the plant and in the office. Improvements in productivity not only offset risks in challenging times, but it also prepares the company with increased production capacity for the following future times of growth.
Educate yourself on the export basics. There are a lot of details that may not have mattered too much before, that now might make a major difference – and don’t count on your broker to know and do what’s best for you. “FOB”, for instance, may have seemed an innocuous term on your quotations, PO’s or invoices before, but it makes a big difference now as it declares who is responsible for paying any duties or tariffs before product is cleared at the border and released to you, or your customer. It could be money you pay out of your pocket, months before you try to get it back from your customer. Commercial invoicing practices are also an important way to make sure any tariffs are only applied to the appropriate value of the actual material product being exported. When no or small duties and tariffs were applied, the mistakes were not very costly and you may not have even noticed, but now they can become very costly if you do it wrong.
Company culture matters – and in times of uncertainty, more than ever. Slowdowns provide opportunities to upskill and cross train employees, with some companies adopting programs aimed at elevating “core competencies” – everything from understanding finance (personal and corporate) to health and well being (mental, emotional, physical, even spiritual). A healthy, motivated and agile workforce is a great competitive advantage, and it is a key differentiating factor for most prevailing companies.
Make sure your voice is heard, as a manufacturer and employer of many. Although most manufacturers prefer to not get too involved, or to leave it to associations they may be a part of, this a great time to invite your MP or MPP to your plant for a tour, a photo-op, and to educate them on what policies affect you most. Three things to remember in this regard: 1) this is in your control and you can make a difference, 2) there are many groups loudly and persistently seeking to influence them in ways that are not beneficial to the manufacturing sector or your company, and 3) we get the governments we deserve, especially if we leave it to others to educate and influence the next elected government.
Focus. Productivity. Knowledge. Culture. Voice. Five things within your control today; five things that can strengthen your company for the future.
For more insight or information on the above topics, please contact paul@tpi-3.ca or visit TPI-3.ca
If you are a CEO of an Ontario based manufacturing company and are interested in knowing more about Innovators Alliance, please visit innovators.org
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