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The future of plastic business

Over the past few weeks we have seen many news items, locally and internationally, about plastic and the pollution it creates in the local and global environment. Becoming aware of the damages some plastic products cause, especially the use and throw items like plastic bags, governments around the world are putting legislation in place to ban the production and use of a number of plastic items. This is so the case in Rwanda already for some years now and Kenya followed suit eight months ago. Production and use of plastic bags and other use and throw plastic items became illegal and environmental law enforcers follow up on compliance by the private sector and the public. Producing or using any of the banned items will result in harsh punishment, including financial fines and jail sentences. The strong measures seem to be paying off as the environment indeed begins to show signs of less plastic pollution and related damages;
so far so good. However, the introduction of such new legislation from one day to the other for example in Kenya, did not allow business owners and the public much time to adjust to the new situation and find alternatives. As a result, some businesses ended up in deep trouble, while the public had to find new ways to carry home fresh meat or fish without spoiling other grocery items or handbags.
I have observed that new legislation is often introduced overnight without considering the immediate and indirect consequences and without allowing for a grace period for example to allow the market to adjust to the new situation. A legal business may thus end up bankrupt in a matter of days. Sometimes even, new legislation is introduced, entering into force retrospectively, which is hardly fair to those affected by it.
Not that I am aware of the development of legislation banning certain plastic items in Ethiopia, looking at the enormous pollution by plastic bags and bottles in this country, it would not surprise me if similar measures will be taken in this country soon. In other words, companies producing plastic items, better be aware and anticipate a major change in their sector and take pro-active measures to reduce the risks they may face.
From this perspective, I’d like us to look once again into the so called Sigmoid or S-curve, which is sometimes used to represent the seemingly natural way how things develop in business. The curve is sometimes referred to as a learning curve: we learn through trial and error, develop confidence and achieve mastery. It looks like this:

But unless we continue to renew ourselves, performance begins to drop off. In terms of organizational effectiveness, management could study where they are on the curve and see when decline will begin to take place. This is the time management will then try and turn things around.
The solution to the problem is often found in ‘work harder’. But perhaps working harder is not the right answer and instead we may need to work smarter. In fact, we should not wait for the curve to begin sliding down and until crisis occurs before beginning to work on renewal. The secret of constant growth is to start a new Sigmoid Curve before the first one peters out. The figure below shows how this might look.

While we normally concentrate on what we are doing today, the fact that our environment and the conditions we work in are constantly changing, requires us to pay attention not only to improving our present operations but also to designing for the future. In other words, we must have two strategies operating at once. Working on and learning from the two curves simultaneously means that we must allow the past and the future to coexist in the present. Few business owners have the luxury of being able to shut down their business while they transform it, so they are forced to put up with the turbulence and turmoil characteristic of life between the curves. It will take time for the second curve to become established and the first curve to wane. As a consequence, both curves need to coexist in the same time and space. This is like rewiring a house, while leaving the electricity on. There is some danger but if you want electricity throughout the changeover period, you have little choice.
Living between these curves presents leaders with an interesting set of challenges like:
Keeping the first curve alive long enough for the second curve to firmly establish itself.
Develop the perspective and discipline necessary to allow funds to be siphoned away from the first curve to be made available to develop the second curve.
Be able to manage the confusion and tension that results from having both curves operating at the same time.
Now, the road to the future begins by improving that which already exists or making the company as good as it can possibly be at servicing its present customers in the present market. Think about answering the following sets of questions:
The customer:
Who are the present customers and why do they buy from us instead of your competitors?
Are the needs of the customers changing and if so what is driving those changes?
How can we use those changes to our advantage?
The competition:
Who are our present competitors and why do customers choose them over us?
Are the rules of engagement changing and if so what is driving those changes?
How can we use those changes to our advantage?
The company:
If our present customers were to redesign our company, what would they turn it into?
How can we use the latest technological advances to our advantage?
How can we strengthen our relationships with our key customers, suppliers and business partners?
In studying these questions and trying to make sense of the answers we in fact developing a new vision for the future and prepare the company for how it can get there.

Ton Haverkort
From: “Mission Possible” by Ken Blanchard and Terry Waghorn.


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