I was talking recently with a client about the situation in Iran, particularly the Strait of Hormuz and its effect on global oil supplies and various other impacts this was having. I quickly realised it was going to be a bit one-sided when, not long into the conversation, they responded with "I don't really know much about all that - I don't really watch the news".
I wasn't entirely surprised by their response, as it seems most of us don't 'watch the news' anymore. It used to be that you could sit down at 6pm every night and get a summary of local and global events and feel like you had a rough idea of what was going on in the world. But not anymore.
Aside from the fact that the world has become much more complicated and seemingly divided, it's also hard to seperate news from opinion these days, especially with the rise of online 'experts' and 'commentators' that appear in social media feeds every day.
But here's the thing - While you may not care that much about global events, or think you understand them, as a business owner or entrepreneur: You have to be aware of them. You don't have a choice! If you want to operate any sort of business in today's world - and particularly if you want to expand that business overseas - you have to be prepared to think globally. You don't have to become an expert in global politics, or understand the nuance of geopolitical poliy, but you must be aware of what's going on outside of your local market. Because more than ever, global events can have dramatic global impact.
No matter what industry or sector you're in, I guarantee that it is effected by global events, whether you realise it or not. That client I mentioned at the top of the article? They sell sporting goods in Australia, and the manufacturing cost of these products was going up dramatically due to the conflict in Iran. Why? Because alot of their products are made out of plastic. And plastic is derived from petrochemicals, which is made from oil. So when oil supply is affected, the cost of their products goes up.
COVID is a classic example of global events triggering local issues, as freight costs went through the roof and manufacturing facilities were closed or restricted, meaning all manner of products were hard to come by.
A lesser known event in that time was the closure of the Suez Canal in 2021 for six days, due to a 400. meter tanker that ran aground. Six days may not sound like much, but that affected 12% of global trade, with almost $10 billion PER DAY being delayed That's $60 billion worth of product not moving! And keep in mind that when it started, no-one knew how long the canal would remain blocked. The result was a spike in freight prices, and delivery delays that affected thousands of companies worldwide.
The bottom line is this - your business may literally seem a world (or half the world) away from conflict and disruption, but it doesn't mean you're immune from it being impacted by it. It's never been more important for businesses to pay attention to what is going on right around the globe, and to plan and respond accordingly. The ability to act quickly can be the difference between success and failure.
