|
Want to listen to the tip? Use the play button below. For other ways to navigate these challenging times with confidence, get the free complete Trade-War Success Guide for Small to Mid-Size Companies below. If you are a prairie CEO who wants to grow a thriving company more quickly, more easily and with less stress and headache, please contact me here.  With the US trade-war in play for a few months now, how likely is a recession in Canada? While there is a lot of uncertainty about what the President of the United States will do, there is little uncertainty that the longer tariffs are in place, threats of tariffs are being made, or trade talks are underway, the bigger the impact will be to the North American, and potentially, global economy. In fact, economists agree that economic growth was already slowing in Q1 2025 due to the threat of tariffs over those few months, as outlined by RBC’s chief economist Francis Donald in their March 4, 2025 article “US Tariffs on Canada Take Effect: What is the State of Play?” The Bank of Canada also does a great job of explaining how a recession would unfold due to tariffs, in their January 2025 article “Evaluating the potential impacts of US tariffs”. The quick and simple explanation is that any tariffs implemented across a broad swath of products will result in increasing prices in most parts of the economy, which will ultimately be reflected in the prices of most products and services that consumers buy. See our April 23 video and article titled “Will Tariffs Silently Eat Your Profits?” This “supply shock’ type of inflation usually reduces demand in an economy, in contrast to the more common inflation that results from rapid economic growth which reflects increased demand. As well, ongoing uncertainty around tariffs and trade agreements are causing businesses to delay investment decisions. Both of these dynamics slow down the economy, reducing demand on average across the economy, and increasing unemployment, which further reduces demand. Other factors, like exchange rates and interest rates somewhat mitigate or exacerbate these effects. Note that both the Bank of Canada and RBC acknowledge that there is no precedent for the level and breadth of tariffs that have been implemented or are being considered. The last time there was anything resembling this was in the 1930s. Therefore, both the Bank of Canada and RBC acknowledge that their models may be significantly underestimating the magnitude of the economic downturn that could play out. As Jim Collins discovered in his research for the best-selling business book Good to Great, “Productive change begins when you confront the brutal facts. Every good-to-great company embraced what we came to call ‘The Stockdale Paradox’: you must maintain unwavering faith that you can and will prevail in the end, regardless of the difficulties, and at the same time, have the discipline to confront the most brutal facts of your current reality, whatever they might be.” The brutal facts are that economic growth has already slowed, and while we don’t know for sure what will happen, one very real possibility is a significant economic slowdown. So, how can a small to mid-size prairie-based company CEO plan for a potential downturn when the level, breadth and duration of the trade war is unknown and the extent of that downturn is highly unpredictable. Enter scenario planning. See next week’s article where I’ll cover how to create a scenario plan to be prepared to take calm, rational action regardless of what happens. For other ways to navigate these challenging times with confidence, get the free complete Trade-War Success Guide for Small to Mid-Size Companies below. If you are a prairie CEO who wants to grow a thriving company more quickly, more easily and with less stress and headache, please contact me here.
Want to listen to the tip? Use the play button below. For other ways to navigate these challenging times with confidence, get the free complete Trade-War Success Guide for Small to Mid-Size Companies below. If you are a prairie CEO who wants to grow a thriving company through these turbulent times, more quickly, more easily and with less stress and headache, please contact me here.  How are you keeping your leadership team aligned with your trade war plans? It’s one thing to have a plan to deal with tariffs or prepare for a potential recession. It’s another thing to actually make them happen, especially within the day-to-day whirlwind of sales, serving customers and working with employees. Here are some tips for working with your leadership team to execute on your plan: As a leadership team, identify, assign and capture actions needed to: o Gather and filter accurate information o Manage supplier relationships o Manage customer relationships o Look for opportunities o Manage cash flow o Communicate with employees Use a living plan document, with a timestamped “best current view” date, and adjust as needed. Hold a weekly meeting with your leadership team to: o Stay aligned on the latest developments with the trade war. o Track your latest financial and non-financial metrics, for the company and each function. o Ensure follow-through on actions relating to suppliers, customers, cash flow and employees and opportunities. o Quickly identify and resolve any issues that come up. o Keep your team action item list up to date. Hold a daily huddle with your leadership team to stay in sync regarding: o Individual progress made each day o Key daily metrics if available o Each team member’s top priority for the day o Any challenges, issues or blockers that are coming up, so they can be addressed as quickly as possible throughout the week. These simple team alignment tactics will ensure you and your leadership team are on the same page and executing smoothly. For other ways to navigate these challenging times with confidence, get the free complete Trade-War Success Guide for Small to Mid-Size Companies below. If you are a prairie CEO who wants to grow a thriving company through these turbulent times, more quickly, more easily and with less stress and headache, please contact me here.
Want to listen to the tip? Use the play button below. For other ways to navigate these challenging times with confidence, get the free complete Trade-War Success Guide for Small to Mid-Size Companies below. If you are a prairie CEO who wants to grow a thriving company through these turbulent times, more quickly, more easily and with less stress and headache, please contact me here.  What are you doing to keep employees at ease through this trade war? Is your prairie based company getting hit hard by tariffs? If so, your staff may get worried about their job and if they will be able to pay their bills. You need to understand what is happening in the mind of an employee. Most of us CEOs are relatively well off. But our employees are often working paycheck to paycheck. So, their worries about potential job losses are real and reasonable. Communicate regularly and consistently, weekly or biweekly. Your communications may be 50 to 60% of the same messaging. That’s ok – repetition is the key to retention. And as employees repeatedly hear things in the media that cause them concern, we need to repeat reassurance. Communicate to staff clearly, promptly and in a balanced manner, including:
Employees are exposed to large amounts of news and social media content that can be concerning. Calm, consistent, clear messaging is best. Keep in mind the old saying, “employees need to hear a message seven times for it to stick”. We may be able to taper off the frequency from weekly to bi-weekly, and then monthly as there is less new information, and as employees’ comfort-levels increase. Our employees need to know that we are aware of the situation and that we are taking action to safe-guard the company. This is about maintaining our culture and employee engagement, which will be critical to how successful our company is in navigating the situation. For other ways to navigate these challenging times with confidence, get the free complete Trade-War Success Guide for Small to Mid-Size Companies below. If you are a prairie CEO who wants to grow a thriving company through these turbulent times, more quickly, more easily and with less stress and headache, please contact me here.
Want to listen to the tip? Use the play button below. For other ways to navigate these challenging times with confidence, get the free complete Trade-War Success Guide for Small to Mid-Size Companies below. If you are a prairie CEO who wants to grow a thriving company through these turbulent times, more quickly, more easily and with less stress and headache, please contact me here.  In your prairie-based company, how are you managing cash flow through this trade war? If your supply costs are increasing and you’re managing price increases to customers, cash inflows and outflows may become mismatched, making cash flow less predictable. There are a number of tactics companies can use to better manage cash flow through this period, and beyond. Ask your accounting and finance lead to prepare a weekly cash flow report, showing:
Pre-emptively identify cost reduction opportunities, and execute to get those savings. Even small amounts can add up to a large saving if there are a number of them. However, be careful not to “sell the furniture”, as some say. Cost-cutting should be done to identify and eliminate unnecessary costs, that are often overlooked during prosperous times. It’s not meant to cut costs that are essential to doing business. Maintaining a level of stability in your facilities, systems, infrastructure, staff and advisors is critical to navigating a trade war and potential economic recession. Measure your cash conversion cycle, that is, the number of days from a dollar being invested in marketing to a dollar being deposited in the bank. And identify ways to speed up that cycle. This includes rethinking your internal processes, reducing mistakes or adjusting your business model, in terms of finding ways to get paid earlier and pay suppliers and vendors later, so you have more cash on hand for longer. Identify other sources of cash to access in the event you have a cash crunch. Can you negotiate with large creditors or vendors now to preserve cash? Can you get access to more cash if you need it? Can you access government grants or special lending programs? For some companies, cash flow will be a significant risk through this trade war. Mastering some basic cash flow disciplines can serve them well now, and into the future. For other ways to navigate these challenging times with confidence, get the free complete Trade-War Success Guide for Small to Mid-Size Companies below. If you are a prairie CEO who wants to grow a thriving company through these turbulent times, more quickly, more easily and with less stress and headache, please contact me here.
|
Archives
December 2029
Categories
All
|
RSS Feed
Copyright © 2018