It is tempting to look at the crazy year that was 2022 receding in the rearview mirror and let out a big sigh of relief, but most of the challenges that made last year so trying are still with us – and many of them are only going to become more acute in the year ahead. Here are five things you, as a leader, need to be thinking about so that you can futureproof your plans for 2023:
As much as we’d like it to be, it’s important to remember that the pandemic is still not over. In fact, with cases skyrocketing in China as that country abandons its ill-conceived “Zero COVID” policy, we are entering a dangerous new phase that is likely to bring even more disruption – particularly to global supply chains. But even as this new wave crests, there is another COVID-created problem whose full magnitude is only just beginning to be grasped: the millions of “long COVID” sufferers. Long COVID wrecks the Spanish Flu analogy that, for many planners, provided a useful analog for thinking about how this pandemic would play out. But there was no such thing as “long Spanish Flu.” People either died or they got better. Not so with this pandemic. For growing millions around the world, their illness is lingering. Their need for ongoing treatment is taxing already strained healthcare systems, and the disappearance of many of them from the workforce is exacerbating hiring challenges and further eroding household incomes. All of this will exact a growing economic toll, at least until a cure is found. You will need to think about how this could impact your plans.
2. The War in Ukraine
Barring regime change in Russia, it is unlikely that we will see an end to this conflict in 2023. Rather, we can expect to see further escalation – up to and including the use of weapons of mass destruction by an increasingly impotent Russian military. So far, Vladimir Putin’s sinister effort to weaponize winter by destroying Ukraine’s electrical grid and threatening Europe’s fuel supplies has proven largely ineffective, albeit unimaginably horrific for the Ukrainian people. The NATO alliance remains intact, the sanctions regime is expanding, and Ukraine’s heroic defenders continue to push back Russian forces on the battlefield. But don’t expect Putin to relent. Rather, expect him to look for new and more terrible ways to strike at not only Ukraine, but also those nations that support her. Expect growing cyberattacks, retaliatory economic moves, and even a widening war that would have even more impact on global supply chains and the economy. Plan for the worst and hope for the best.
3. The Economy
Speaking of the economy, it is unlikely to get better anytime soon. You need to disabuse yourself of the notion that this is a temporary situation – that you just need to get through the next quarter or the next six months, and we’ll be back to normal market conditions. We’ve got high interest rates, volatile energy costs, a major housing market correction, and a lot of other disruption from the war, the pandemic, and ongoing supply-chain issues that is going to make things very challenging for a lot of people – and not just the poor or working class, but also for the middle class. You need to factor that into your calculus. You need to recognize that people will have less disposable income and less tolerance for personal financial risk. This will impact not only retail spending, but other sectors of the economy as well. Air travel, for example, is once again becoming a luxury for many people. That not only impacts the airlines, but all the other businesses that depend on tourism, as well as the businesses that depend on those businesses. Think about what this means for you and your own business.
4. Supply-chain Disruption
The logistical nightmare that seemed a temporary effect of the pandemic instead triggered a chain reaction, leading to a cascading series of ever-widening supply-chain disruptions that show no sign of abating anytime soon. If anything, the ongoing war in Ukraine and new surge in COVID infections in China is going to make an already bad situation much, much worse. So is the fact that so many people have decided to leave the workforce, creating dire personnel shortages at trucking companies, warehouses, and other logistics hubs. You can no longer take for granted your ability to get the goods, the equipment, the parts, and the raw materials you need in a timely manner. You will need to find alternative suppliers and logistics providers to create redundancy in your own supply chain. Even with that, you may still face shortages, so that means creating optionality in your own plans to ensure maximum flexibility.
5. Artificial Intelligence
A month ago, I wrote a piece for Forbes about Open AI’s amazing ChatGPT, arguing that it signaled that the future of AI – so long discussed and debated – had finally arrived. And it has. Since then, this single AI has already begun disrupting a dizzying array of businesses and institutions. Marketing firms are using it to produce better ad copy than they could get out of a junior copywriter. Musicians are using it to write lyrics for their songs. And students all over the world are using it to cheat on their homework. This is still only the beginning. A lot of people are soon going to be out of a job because of AIs like this, and a lot of organizations are going to need to rethink their entire operating model. The time to start doing that is now.