Clownfish Economics: why every business needs to be a clownfish in 2023

By: John Bee, Managing Director, White Space Strategy

Clownfish have a superpower: they can swim amongst the poisonous tentacles of sea anemones. In return, their bright colours attract other fish, providing food for the sea anemones. Anyone who’s watched Finding Nemo knows about this.

In 2023, businesses will need to be clownfish. There will be 3 types of sea anemone: customers, staff and governments. To swim, and to survive and thrive, businesses will need to give these three stakeholder groups something in return: affordable goods and services, decent pay, and support for market regulation.

Customers: the blue sea anemones

Let’s start with the most important of the three stakeholder groups: customers. They’re the blue sea anemones on the coral reef: sometimes hard to identify and, in 2023, battered and bruised.

They’re going to need some food, literally for many of them. They’re going to need fair prices, quality products and good customer service. They’re going to need fair terms and conditions, transparency and loyalty that goes beyond points, prizes and special upgrade deals.

If you don’t treat customers well, they disappear. And what happens when there are no customers left, or they can’t afford to buy your products anymore? Or when another businesses offers them something more useful or more affordable or more trustworthy than you do?

In short, it’s going to be in everyone’s interests to make sure the blue sea anemones are OK.

Staff: the yellow sea anemones

Staff are the second stakeholder group we’re going to look at. They’re the yellow sea anemones: often bright and cheery but, in 2023 close to burn out.

They will also need some food. They’re going to be stressed, depressed and under strain. They’re going to have bills mounting up, getting higher every month. Their going to have kids still recovering from the pandemic (which won’t be over, in reality). They’re going to be worried about their jobs – what if they’re made redundant in the middle of a recession, when they’ve got a £400k mortgage and interest rates have trebled in a year?

They will also have other employment options, or at least some of them will. The job market will still be tight, and other companies will still have deep pockets, lined by profits built up during the pandemic (from quantitative easing, possibly, or maybe because they’re a digital platform).

Clearly they need money. Without it they’re going to struggle, and this will follow them into work every morning. But they’re also going to need emotional support, flexibility and compassion.

Otherwise, what’s going to happen?

And what will happen to the companies who employ them?

Governments: the red sea anemones

Governments are the third type of sea anemone: they look scary and threatening, but can also be incredibly useful.

Like the blue and yellow sea anemones on the coral reef, governments will also need food in 2023. Again, this will literally be the case for some of them (20m people are in urgent need of food in Ethiopia right now). They won’t have been through anything like what’s about to happen before. Some won’t know what they’re doing (who will do?). All will be making it up as they go along – whilst under pressure from popularist opposition making easy arguments that resonate with populations worn down and desperate.

They will need to regulate, and to unleash everything they’ve got to address the root causes of the crisis. This won’t always be popular, and won’t always obviously appeal to businesses and shareholders.

But what alterative have we got?

Donald Trump and Georgia Meloni, perhaps (try typing “Italy far right” into Google – Meloni is Italy’s far-right candidate and favourite to win the snap general election this September). If we value our liberal democracy, businesses need to support their governments and work with them to introduce new forms of regulation, fit for the twenty-first century. These need to focus on addressing two of the main root causes of the crisis: living costs and climate change. We can’t do much about Russia and Ukraine, but we can literally change the world on these two areas if we will it together.

In Africa and the Middle East, liberal democracy is less common. But the fragile democracies in this region will need support – and it will be in our interests to ensure the dictatorships and autocracies aren’t stretched to breaking point by war, famine and water shortages. Businesses will have a huge role to play. The alternative? Religious fundamentalism, millions of refugees flooding into Europe, and restricted access to key raw materials (like lithium for all of the EV batteries we need: some of the world’s biggest deposits are in the Democratic Republic of Congo). We also need African people as attractive customers and productive staff, in our globalised economy.

For very many reasons, it’s important that businesses help their governments wherever they can.

Why be a clownfish?

I hope the benefits of being a clownfish are already quite clear, if you’ve read this far. However, there are a few obvious objections:

• What if we’re the only clownfish in the reef?
• And why should we be one now, when being a different kind of fish has worked fine for us in the past?

Taking these in turn, I’d flip this on its head: what’s if you’re the only fish that isn’t a clownfish? Your customers will desert you, your staff will either be highly unproductive or will quit, and you’ll be stung by market regulation (by the tentacles of those threatening red starfish amongst the corals).

And, looking at the second objection: the world’s changed, and is about to change again. It wasn’t necessary to be a clownfish to succeed as a business before the pandemic. I worked with companies who were able to grow successfully by taking advantage of lax market regulation, low inflation (meaning cheap borrowing and limited pressure on wages) and weak trade unions. Commercially, this was the right thing to do. It won’t be the right thing to do in 2023 (when customers, staff and governments will be under a completely new and unique set of pressures).

How can you become a clownfish?

Maybe your business is one already. Many companies are. Read Ethical Capitalism by Julian Richer, to look at some examples in depth. He founded Richer Sounds, and has in-depth knowledge of how to create a successful business that’s also supportive of customers, staff and governments. I’ve summarised his book on Whiteboard, if you don’t have time to read it in full.

Doughnut Economics by Kate Raworth is also an essential read. Its title was the inspiration for this blog – and its ideas go a lot deeper and broader than I’ve been able to here. It’s also summarised on Whiteboard but, in short, the economy needs to focus on goals other than GDP growth to succeed. Raworth’s view is that governments and businesses need to nurture the entire ecosystems around them – and she outlines a wide range of ideas in Doughnut Economics for how they can do this in practice. Watching her Ted talk’s a very good way to spend 15 minutes.

Overall, though, I don’t think being a clownfish business is complex: create things customers need, sell them for fair prices, pay decent wages, and welcome some market regulation. My 15 Forces Driving 2023 article goes into more depth on how this can be done in practice.

Saying it’s a simple concept is different from saying it’s easy: some businesses will find it very hard to do these things. Shareholders might be unable to accept reduced margins – or they might be under the pressure of debt (which needs refinancing in a world of higher interest rates). CEOs are people, too – some of them will be frazzled and under pressure. The same is true of people who run pension funds and private equity firms.

Everyone’s going to be under pressure, but we have an ability to act.

What alternative have we got?

It doesn’t end well for the other types of fish on the reef.

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