In March, I wrote an article posted on the MWB blog and in our previous newsletter, titled “Business Response in Times of Crisis.” COVID had just recently been officially labeled a ‘global pandemic’ and we were all learning phrases and acronyms such as ‘flatten the curve’ and PPE” (personal protective equipment) – not to be confused with PPP (Paycheck Protection Program) which wouldn’t enter lexicon for another two whole months. The article’s main focus was planning for and dealing with the immense anxiety and uncertainty we were facing. As year-end 2020 approaches, we as individuals and an economy writ large can now look back on the information gained and lessons learned in acclimating to the ‘new normal’. Change is the only constant, a central tenant of calculus, rings ever so true for everyone this year, not just mathematicians.
Uncertainty brings fear and anxiety, but it also presents potential returns and personal growth for those willing and able to take on the necessary risk. Nine months into this environment, the customers and suppliers for your business may, perhaps, have been materially impacted by the economics of the pandemic – they are planning for 2021 right now and you should be too. Hopefully, vaccine testing and biology will provide additional clarity on the business environment expected in both the near and long term.
Planning for the future may seem like a daunting task in this ‘new normal.’ However, that is exactly why it is important when planning to approach it starting from a granular perspective while also developing the larger overall business strategy. Starting with bite size areas allows for specific analysis of the varied impacts your business has already experienced from customer segments, workforce management, contract provisions, etc.
Some example questions to focus your planning include:
- If your employees will continue to work from home, can you exit your lease early?
- Have you taken the necessary steps to protect your data and computer systems so only employees, and not intruders, can access your systems?
- Should you look to downsize your office space or not renew your lease?
- Should you start hiring talent from anywhere in the country or world?
- More generally, have you examined all your significant contracts for provisions which need amended due to the current and future operating environment?
- Is your business temporarily impacted by the pandemic or is it permanent?
- Ask these same questions regarding your customers and vendors.
- What is the impact on your revenue? On your expenses?
- Get specific on the categories and line items to understand the entity-wide impact.
Nassim Nicholas Taleb is the probability focused author who coined the term “Black Swan.” The term is used to describe events, based upon human experience up until that point, are both highly improbable and impactful while being explicable and predictable only in retrospect. His work focuses on recognizing the extremes in our world and how they can be used to one’s advantage. Specifically, the rarity of an event should not lead to our dismissing of it, in fact just the opposite. Due to the possible ruinous nature of these types of events, we should hedge against them because eventually, they will occur. On May 31, 2020, he tweeted, “How you did in this pandemic, as a country, a village, a business, a group, or an individual, whether emotionally, economically, or morally, is an indication of how robust you are and how fit you will be for the next decades.” This single sentence has been front of mind for me ever since.
There is often a thin line between bravery and foolishness. Most times, the ultimate determination of which side you are on is survival. When you find yourself in trouble, whether you contributed to that trouble or not, then the only thing to do is stay in the middle of it. No matter whose fault it is, you need to face the change and be omnipresent when it is happening. If you find yourself in the position of a service provider for a company in this type of situation, it is important to step in and help your client face the issues head on. Real time decisions are critical to surviving and thriving. To ignore or deny change leads to a total loss of control or at least an inability to steer in the storm. Losing control means you can no longer determine your own fate, you will have lost the ability to impact your outcome or mitigate your loss.
The dysfunction of 2020 touches everyone; how will you react as an individual, business, vendor, or customer to ensure survival and growth over the coming months, years and decades?