MEDIA: CBC News Network Weekend Business Panel (November, 2022)
Another busy week on the CBC News Network Weekend Business Panel, alongside Jeanhy Shim and John Northcott, talking layoffs at Meta, the collapse of crypto platform FTX, increasing financial strain, and more; watch our segment here.
Some thoughts on our conversation.
Although businesses with emerging ideas can be exciting places to be, one of the challenges is that the plan to make these ideas a reality is not always as well developed as it should be. When opportunity appears, growth companies have a tendency to put resources to work first, which could include hiring people without fully understanding the necessary roles, skillset, and quantity, as well as allocating funds to a range of areas. Before long, a lot of money could be spent, and without sound project management, these initiatives tend to drift and may not fulfill what was initially envisioned; they can also run well behind expected timelines. A company’s core business can also suffer, while focus and resources are allocated elsewhere, resulting in problems in various areas. These situations can “snowball” and become quite significant,
Some might think that this scenario would primarily occur in smaller businesses, however, this can happen in any size of company, where growth gets ahead of good planning (analogous to the cart before the horse). The Meta layoffs raise the question of how well the “metaverse” plan was established, resourced, and managed, and also brings to mind the importance of market timing, in terms of the extent to which consumers are ready for what companies develop or are planning to bring to the marketplace.
The FTX collapse is a reminder that the crypto sector is one of high risk and brings to mind the pitfall of thinking that all companies associated with a novel business category are “winners” (examples of this were also seen in industries such as technology and the internet). High risk businesses include those that have a limited track record, weaknesses in areas such as governance and oversight, and thin business models; they also tend to have people in leadership roles with limited experience. This story is a reminder to keep risk considerations in check, especially in those “seems too good to be true” situations.
And, finally, as inflation rates remain high and interest rates continue to rise, there is no doubt that Canadians are feeling the stress of the situation. Over the past couple of years, a drive around many communities is all that was needed to recognize empty office spaces and companies that were no longer in business; this includes job losses. Despite a tight labour market, moving one displaced employee to a vacant job is not always feasible, making solvency difficult for some Canadians. It is important to recognize that, like COVID, our economy may not reach brighter days for a while, despite our best hopes. This is an important area to continue to monitor, for consumers and businesses alike.
It was a pleasure to join this week’s Business Panel from beautiful Nova Scotia! Thank you for watching and see you again soon.
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