Recognise, understand patterns

the fisherman catches bass using baits which float on top of the water and in winter a fisherman uses sinkers which go deep underwater.
The explanation is that in winter fish go deep down in water because it will be warm in deep waters.
In summer the fish can be found in shallow waters because it will be warm for them too.
Summer it is not easy to catch a big bass. However, a fisherman can catch a lot of average sized bass.
He can get a lot of bites on a good day. In winter the bites are slow and fishing is low.
The fisherman must drag the line slowly because the bass will not chase after it as fast as it does during the summer season. Fisherman can catch a relatively big bass in winter. The numbers are not spectacular in winter. Catching five or more is actually a rare feat.
The analogy of winter and summer fishing points to a pattern of fishing which must be adopted in order to catch fish in a particular season.
For the purpose of simplicity, autumn and spring will be considered as summer.
The seasons shape the fishing method, which has to be adopted in order to maximise catch.
Each season presents a different pattern of fishing which has to be followed. Those who understand the significance of patterns succeed and those who fail to appreciate the effect of the weather conditions on fishing fail.
Seasons shape the modus operandi for the fisherman. Attempting to continue using winter fishing methods in summer or vice versa will be disastrous to the fisherman.
Understanding patterns of the weather conditions is one of the major key success factors in fishing.
The fishermen can only ignore the impact of seasons at their own peril. The slow learners (fisherman who adjust their fishing methods after a long time into the new season) are always at the receiving end.
Increasingly people who understand the economic, political, technological and social patterns win the business games. This is easier to say than to apply for average business people.
Understanding patterns leads to a generalisation, which says “if you see something before everyone else you create value for yourself”.
Another generalisation states that “if you analyse the patterns and you implement your business idea earlier than everyone else, you are likely to cream it out”.
People who read patterns and act on them usually enjoy first mover advantage just like the “early bird, which catches the fattest worm”.
Trends are not easy to see but some discover them by accident, some by research and others discover trends out of the need to escape poverty or any form of deprivation.
The need to overcome deprivation explains how countries like Japan who are not richly endowed with natural resources are economic giants today.
Understanding patterns is therefore a function of hunger, intuition, research and experience.
People who recognise trends and patterns inherit the earth because everybody else will not be able to recognise it.
Mastery of trends is one of the few guarantees for wealth creation. People can ignore trends and patterns at their own peril. Successful scientists recognise patterns as something which is seemingly not important.
Rainbow colours are constituents of light. All the colours are white light. The rainbow has led to a lot of discoveries and a thriving industry using the constituent of white light.
People who discovered the constituents of white light made inventions, which made them money.
Discoveries such as the television, videos, etc, emanated from splitting the light use constituent to regenerate images and to communicate.
People who invented these, which is in line with white light, made lots of money.
Trends such as inflation enable a lot of people to make a lot of money. People who borrowed heavily to buy properties, commodities, hard currency made fortunes in Zimbabwe prior to the year 2009.
Trends in stock exchange as well as defined patterns of economic booms, recession are beehives for wealth creation for those who understand these patterns.
Those who follow these patterns at times encourage people to follow them.
The stock market is always another interesting trend where market bubbles can be influenced by few speculators who encourage everyone else to buy the stock they are speculating in.
In most cases these influential players sell their shares before it eventually falls (before the bubble burst).
Worldwide, people make a living out of determining the trends in stock market, currency market, bonds market, etc.
Economic giants such as George Soros are extremely good at determining market trends.
In most businesses there is an element of speculation, which can be minimised by coming up with accurate assumptions based on empirical data and projections that are based on researched data.
Speculation gives hope but must be effectively managed and controlled. In determining patterns there is an element of speculation, which must be managed.
Patterns behave similarly to the life cycle of a product. Those who innovate cream it at the introductory stage, growth stage and to some extent at maturity stage.
Competitors will also want to eat part of the cake. Good learners (early adopters) will join the innovator/trendsetter at growth stage to maturity stage.
Slow learners (late adopters, laggards) will join at maturity to decline stage and in most cases burn their fingers. (Kotler, 1990)
The hardest thing is for business people to appreciate that some trends or patterns come to an end.
If an economy experiences a transformational change such as the demonetisation of our Zimbabwean dollar and replacing it with multi-currency system has had devastating consequences to many Zimbabweans.
Allow me then to analyse the challenges facing the foreign exchange market and the banking fraternity.
Let me start by analysing the “Roadport foreign exchange market”.
Currently, Roadport is a source of employment for close to 50 or more money-changers.
Roadport used to churn out flamboyant money-changers who were known for changing cars as if they were a pair of shoes during the Zimbabwean dollar era.
This was due to the good margins which dealers were enjoying at the time. As a result Roadport became the employer of choice for the period prior to 2009.
That was the trend then.
However, those who joined this employer towards the end of 2008 have no story to tell except regrets.
Today the margins have shrunk to such an extent that to exchange a sum of US$5 000 for the rand equivalent can give a dealer a margin of between US$5 and US$10.
This suggests that people are still at the Roadport thinking that Zimbabwean dollar will come back sooner than the current economic benefits.
As is common with all trends the first movers benefited and the laggards licked their wounds.
l The writer is a managing consultant at CLC Training International. E-mail [email protected]