Rule changes

Watching the World Cup Final between Croatia and France, I was thinking about the rules. About offsides, how high was that kick, did it hit his arm? Was that guy really hurt or is he just dragging out the clock. Every sport has areas where the interpretation in the moment might not stand up to multiple replays later. And of course, how the rules and the interpretation of the rules play out can completely change the scoring of the game. Many times we feel an interpretation is off, and we get upset. How much more upset do we get when a rule changes?

Not only does the rule change affect outcomes, it may start a reaction that results in another rule change. For a business example, if I change a rule that my customers must pay in 30 days to payment required in 15 days, some customers may go somewhere else. If they can’t find another supplier, they will try to find another way to get concessions so the arrangement seems like a better deal to them. This can spiral into a lot of bad faith and angry dealings.

Watching the tariff disputes feels a lot like this but with much larger consequences. Clearly, there were treaties that could have been renegotiated to give the US a better deal than we currently get. And, there were international treaties that we pulled out of that were good treaties. Not perfect, mind you, but good treaties.  Our actions have led to reactions that we cannot yet gauge. China is going to the EU to form better relationships. They are buying their soybeans from South America. Europe continues to create a trading relationship with Iran. It seems like the “rules” of international commerce are changing rapidly as actions, then reactions, rebound around the world.

Who benefits from the disruption? Are you paying close attention to the opportunities as well as the disturbances? Who can you create new partnerships with you? How do you stay in communication with vendors and customers especially with price increases and allocations? Staying nimble is our best defense against uncertainty and change. Wear sunscreen and drink lots of water, it is going to be hot out there.