Read even a few business or financial reports these days (or even during tha past few years) and the word you’re almost certain to stumble upon is “uncertainty.” Quarterly reports and corporate financial announcements, for example, are almost required to note that “market conditions remain uncertain.” For the pulp, paper, and forest products industries, uncertainty is a constant factor affecting business decisions.
Less than a year ago, for instance, Domtar’s Rob Melton, vice president of converting papers and strategic accounts, was on uncertainty about the future of the U.S. Postal Service and its effect on the paper industry. “Uncertainty about the viability of the Postal Service will negatively impact mailer and marketer decisions to choose mail…,” he said.
Similarly, fundraisers and direct marketers in the United Kingdom are coping with uncertainty about the amount of a postal increase planned by the Royal Mail for April.
Uncertainties about the fate of the U.S. Environmental Protection Agency’s boiler emission rules, and how they might be altered, have made investors uneasy and planning difficult. The latest version of the standards are said to be more flexible, and for some air pollutants, less restrictive. What is fairly certain is that U.S. pulp and paper companies are among the 1% of industries that will need to figure out how to comply with the rules.
Currencies are constantly fluctuating in response to uncertainty here, there, and elsewhere around the world. At the beginning of February, the Canadian dollar edged higher, in spite of financial market uncertainty, and by mid-month the U.S. dollar also had gained, bouyed by uncertainties in Europe.
The Finnish Forest Sector Economic Outlook for 2011–2012 notes that “…the demand for forest industry products in the second half of the year will be adversely affected by the heightened uncertainty over the world economy since the summer, especially regarding the immediate future of the euro area and its debt crisis.”
In an article about the state of magazine paper in 2012, Folio author Ioanna Opidee noted: “While the rising use of tablets and e-readers is sure to drive down the already weaning demand for print, no one is sure how fast and wide-ranging a complete digital migration will be. And even though a drop in demand might ordinarily mean a drop in price, the paper industry has become increasingly unstable, and such a fall in demand might lead to additional mill consolidation and closures, as well as greater underutilization of machines—all of which, many publishers fear, could lead to dramatic price increases and severe paper shortages.”
For magazine publishers, “part of the uncertainty comes from private equity ownership of paper mills, as ‘their tolerance for nonprofitability is substantially lower,’” Opidee reports. “…Coping with all of this uncertainty requires publishers to be nimble. The key, say production experts, is to acknowledge that this is the marketplace from now until the foreseeable future and to put plans in place.”
Looking ahead to 2012 in December, consulting firm Booz & Company said, “For business next year, the only sure thing is uncertainty,” predicting that industry would “face challenges ranging from price wars to the evaporation of profit pools to technology-driven disruption.” Their advice: “The key to success is to know what you’re really good at – and matters in the market – and build your strategy from there.” That means “figuring out how best to create value for your customers, identifying the unique combination of things your company does better than anyone else, and then assessing which activities should stay and which should go.”
Numerous business management experts interviewed by The Economic Times of India shared their thoughts on uncertainty and how businesses might best survive during 2012.
“Unwelcome as it is, the global recession acts a catalyst. It spurs us to reconsider our talents -- the ones we use daily and the ones that lie dormant. It challenges us to see how our abilities match market needs and how we might transform ourselves to create a greater impact. More fundamentally, this 'time out' from business-as-usual offers a chance to revisit our values to see if we are pursuing a path that truly matters to us,” said Dipak C. Jain, dean of INSEAD business school. “Uncertainty is inevitable; worrying is optional. Enlightened action is essential.”
Saikat Chaudhuri, assistant professor of management at the Wharton School, University of Pennsylvania observed that “the reality is, even when the present crises subside and we are poised for new cycle of growth, firms looking for sustained success over the next years and decades need to become accustomed to regularly adapting to shifting conditions: technologies will continue to rapidly change, enhanced globalisation and liberalisation will cause markets to continuously evolve, and competitive landscapes will keep intensifying in the process.”
Certainly we’ve lived through uncertainty in past decades, and past generations have survived more profound and dramatic periods of uncertainty (and some have not). In reality, few things in life are certain. Success and survival is partly a result of how well we deal with uncertainty.