An eye to the past can help guide the future

I recently escaped the Dubai heat to spend 2 weeks with my family in the region of the UK I grew up in – Lancashire. I have for some reason over the past few years started to have a greater interest in history and I was fascinated to read about the Lancashire Cotton Panic of 1861 – 1865. An economic depression caused by overproduction of cotton and the interruption of the supply of baled cotton from the US due to the American Civil War causing a major ripple effect worldwide particularly impacting China at the time.

What I found fascinating about the story from the 1800’s was the interlinked economic spiders web – events happening around the world that had repercussions in far reaching economies. What I found more interesting is when we talk about the drivers of change in the modern world, globalisation always tops the list as a recent phenomenon and how world events now are like tsunamis – they affect everyone, rather than like hurricanes that only impact a smaller area. History would tell us something much different it seems some of the effects of globalisation have been with us much longer than we think.

I also recently had a conversation with a friend about NFT’s and their drop in price. I explained to him the similar phenomenon that occurred in the 17th century – Tulip Mania.

400 years ago - the Dutch Republic experienced a significant increase in the prices of tulip bulbs, driven by speculative trading. However, the bubble eventually burst, resulting in a sharp collapse in prices. If you don’t believe that – Google it – its an interesting read. Tulip mania serves as a cautionary tale about speculative bubbles and asset pricing.

So what’s the point of the small history lesson in an HR column? In my personal experience one of our biggest faults as a profession is always looking inwards into a business and reacting to day to day events, not analysing the external environment sufficiently, and not taking into account how history can often guide us on our future.

Understanding history is crucial for Human Resources professionals because the lessons from the past will offer valuable insights and guidance that can be applied to contemporary organizational challenges. History provides us with a wealth of information on how societies and economies have evolved, the successes and failures of various strategies, and the consequences of different decisions. By delving into historical events like the tulip bubble and the Lancashire Cotton Famine, HR professionals can gain a deeper understanding of human behaviour, economic cycles, and the impact of external factors on business operations. It can help us plan better.

Going back to my new holiday learnings - in the case of the Lancashire Cotton Famine, there are great learnings about the lessons that the impact of global economic forces can have on industries and employment. The overproduction of cotton and the American Civil War disrupted baled cotton imports, leading to a depression in the textile industry of North West England. Globalisation is not a modern phenomenon.

So, what can HR professionals do with this historical knowledge?

The one thing that stands out is simple - it can help us with better decision-making: By understanding historical economic events, HR professionals can make more informed decisions when it comes to workforce planning, talent management, and compensation strategies. They can identify potential risks and opportunities, ensuring the organization is well-prepared to navigate through uncertain times.

It can help us with enhancing our strategic planning: HR can contribute to strategic planning by incorporating historical perspectives into the business strategy. Recognizing patterns from the past can help HR teams identify potential future challenges and develop proactive measures to address them.

• Business