| By Michael Collins, Managing Principal, EquiNova History tells us that the first months of a presidential administration often are the most significant–and the most erratic. Franklin Roosevelt did more to transform government in his first 100 days in office than other presidents did in their entire terms. On the other hand, John Kennedy authorized the disastrous Bay of Pigs invasion of Cuba three months after taking office. And two weeks into his presidency, Jimmy Carter put on a cardigan sweater and told Americans to shiver through 1977’s energy crisis by turning down their thermostats. They didn’t like it. Now we have returning to office a man who promises to issue dozens of executive orders intended to dramatically revamp and reform hundreds of federal programs. Expect scores of lawsuits from both liberals and conservatives over those moves. Meanwhile, many of President Trump’s bigger initiatives will require support from a Congress that can barely get itself organized. What actually will become law given all these uncertainties is anybody’s guess. If you’re planning your LBM company’s future, issues like tariffs and immigrants and tax policies are what former Defense Secretary Donald Rumsfeld famously categorized as the “known unknowns”–issues we’re aware of, but we don’t know what will happen to them. On top of them, you have “unknown knowns”–issues you can expect will happen but don’t know when or where, such as natural disasters or the next tech discovery. And finally there are “unknown unknowns”–things you didn’t even realize existed that could be a game-changer, such as a COVID virus that killed 1.2 million Americans and shut down the economy. How can you manage amid so much uncertainty? I recommend two things. First, identify the “known unknowns” and start collecting useful information about them. Then prepare plans on how you would respond to likely scenarios. For instance, imagine the Trump Administration will act on its oft-promised plan to raid communities and businesses in search of undocumented immigrants, particularly those with criminal records. In our experience, the vast majority of building products companies do not knowingly hire undocumented workers. However, in the current immigration environment, it may be advisable for companies to take the next step and supplement the Form I-9s they’ve collected by submitting each worker’s name to the e-Verify system to ensure legal working status. The attorney handling your HR matters can advise you on your specific case. Implicit in this what-if work is that you give executives and support staff time to do the prepping. It’s a modern-day example of the old advice that you should be working on your business, not in it. Second, explore whether your organization is set up to make changes quickly when the unknown becomes all too real. As I wrote last month, COVID’s arrival sparked unexpected—and unexpectedly quick—decision-making, with dealers speedily embracing e-commerce, curbside service, and BOPIS (buy online, pick up in store). That merits praise. But I bet that many dealers would concede today that they were making changes out of gut instinct and/or by frantically grasping at a solution. With foresight, their next quick move will have thoughtful research behind it. If you prefer a football analogy to a political one, consider this: Every NFL team’s coaching staff has a group devoted to analyzing the opponent’s weaknesses, recommending ways to exploit those gaps, and training players to spot opportunities. This preparation, combined with practicing for scenarios like a fake punt or two-minute drill, is vital when the team takes the field. But once you have all that, you also need quick-witted players. Victory begins in the film room. |
