“Fortune favors the prepared mind.” – Louis Pasteur

Hiking, hunting, and adventuring in Alaska are good metaphors for how I see 2023. You can easily have the experience of a lifetime – but A) Be prepared for bad weather. B) Have a plan B.

I am generally an optimist. I naturally tend to think in terms of opportunities and possibilities. But…I believe 2023 will be a difficult and stormy year.

Those who aren’t prepared will struggle. On the flip side – those of you (my readers) who are paying attention and acting accordingly will likely be fine. You may even improve your condition.

In fact, this could even be a record-breaking year for you.

Here are my basic predictions:

• The economy will continue to struggle:
  • Inflation will stay with us.
  • Supply chain issues will continue.
  • Continued bear market. The stock market has not yet reached its bottom.
  • Real estate prices will continue to fall (but some of this is just a correction to the unrealistic prices of the last two years).
  • Whether officially recognized or not, the economy won’t run in the desired direction next year.

• Generalized insecurity and anxiety. COVID, geo-political tensions, a “funny-money” economy that is difficult to read, social unrest, and social anomie have taken their toll.

According to WHO, there is a 25% spike in reported anxiety globally. Most of this is occurring within younger generations whose worldview and sense of the future are being shaped by recent events.

Expect this to change decision-making, spending patterns, behavioral patterns, and so on. People will seek security and distraction over other priorities.

• Hiring will stay difficult in most industries. The hiring challenges most companies experience will not go away any time soon. They are comprised of fundamental shifts in our demographic makeup (the number of working-age people) as well as a couple of handfuls of small, but meaningful in-the-aggregate, drivers.

Some of these were amplified or accelerated by COVID. But don’t expect them to recede with COVID. When it comes to employees: It’s a seller’s market for hiring and will remain so for years.

• The tech industry will be fine, maybe even improve. The layoffs from Twitter, Google, and Facebook are in the news. The cryptocurrency meltdown caught some by surprise. Even though nothing happened that wasn’t foreseen.

These are anomalies and corrections for specific companies bloated on easy money. Most of the recently laid-off will be quickly absorbed into smaller tech companies which, up till now, were struggling for staffing. Many others will start their own companies. I anticipate that 2023 will be traced back to an inflection point for emerging tech companies.

• Black swans. Expect the unexpected. We’ve experienced the unexpected for three years. The normal rules for the economy and even many aspects of society have changed or become less certain. The ingredients in the mix are different. From the mundane to the significant, maintain a stance that allows you to move quickly and regain your balance.

This may seem mostly gloomy. But as we say in Alaska, “Dress for the weather.”

Bad weather doesn’t last forever. And there are significant opportunities available for those ready to pursue them.

Here is what to do:

Excellent leadership will be rewarded. Mediocre leadership will be punished.

Managers manage the known. Leaders create direction out of the unknown. There is far more unknown now than there was five years ago. “Normal” isn’t on the horizon.

Leaders will need to lead. Filling a position, holding a title, and generating success in other areas won’t be enough. It has become increasingly important for leaders to create clarity, inspire others with a compelling vision, model organizational values, challenge what isn’t working and doesn’t make sense, and be an encourager and hope-giver.

Leaders who embrace this will likely be just fine (and profitable) through 2023. Passive, reactive, slow, or self-interested leaders should expect to struggle.

Become internally strong: While employee loyalty is lower than in decades past – this doesn’t have to be the case for your company. In an unstable and confusing environment – people are looking for clarity, meaning, and a place to belong. Your team and your workplace can be that place.

Focus on acting in ways that build trust, foster respect, provide a sense of purpose, and encourage belonging or community on your team. This will provide internal stability and help you withstand external insecurity.

Pivot away from COVID-specific positions: Most businesses have done this. But some are still clinging to COVID-related stances. Ideas that were necessary, made sense, or were even brilliant a year or two ago – in response to COVID – won’t support your success in 2023.

Some industries were able to ride a wave of COVID-related spending – whether government or private. The spending is drying up. Those industries need to pivot or they will be pivoted.

Other industries are maintaining hiring requirements and working conditions that provide little to no actual value. But they cost potential employees, over-burden and burn-out current employees, and, often, decrease productivity. It’s time to pivot.

Plan for contingencies: Anyone who has grown up in Alaska knows that when you pack, you assume all the weather will happen. “If this happens, I’ll want my shorts. But if that happens, I’ll wear my down jacket.”

Plan for contingencies. You will not be able to anticipate all of them. But even the exercise of thinking through and planning for different scenarios helps make you more nimble. Be ready for the most likely scenarios.

Stay focused on your desired outcomes. But be flexible and creative with methods. Stay ready to shift when needed.

In summary:

Lead well.

Create clarity.

Take care of your people.

Embrace the difficult.

…and your chances of a great year will immeasurably increase.

Take good care,

Christian

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