The following is my COVID-19 business analysis for those who are interested. My background includes military/warzone supply chain, disaster relief ops and as an expert consultant to some of the largest banks and private equity firms in the world. These thoughts are solely my own.
Before I dive in, know for certain we WILL recover economically. It’s in our DNA as a country, we’re a society of entrepreneurs and talented people who have overcome much greater obstacles throughout history. This situation has the wild card factor of unforeseen emotional actions (toilet paper) in play which make timetables more difficult to predict, yet I am confident there is always sunshine after a storm.
I’ve been traveling nationally this past week and have witnessed the shocking turn from 100% occupancy in hotels to below 10% ghost towns. These past nights I’ve been one of only two diners at major national chain restaurants – mind blowing for weekend evenings which are typically bustling with activity. Employees standing around, you could see the fear in their eyes.
Short term, I feel we’re in for a devastating slowdown, exacerbated by intense media coverage and social media. Fear of legal liability will drive even more closures of businesses to avoid negligence claims. I feel this free-fall will continue for the next 10-14 days, then begin a slight recovery. Why? We’re not a sedentary society, social interactions are what we do. We see this with natural disasters, people get stir crazy and say screw it, I’m going to risk it and go out to live life. Businesses will begin to re-open and a sense of cautious relief will follow as the world starts spinning again.
Mid-term (6 months out), I see us in a “new normal” economic environment. Industries such as foodservice supply will see a drop to negative 14-16% growth, similar to our past recession. By this point in time fear should begin to subside, everyone will have friends and/or family who have gotten the virus (and survived), lessening the doomsday worries and giving confidence that folks can carry on with normal life activities. This will begin the inflection point where real recovery begins.
Long-term (1 year out), we’ll be back in gear rolling into 2021, with the prior year being one we’d all like to forget. Sadly some businesses will not have survived. As their doors close, business will be absorbed by more stable competitors, fueling those company’s recovery growth at an accelerated pace. Longer term there’s lingering economic impact (including paying for aid, bailouts and other costs incurred), but these are less relevant to everyday business.
Final thoughts, I’ll admit It, I’m concerned. Not much in life phases me, a byproduct of spending a disproportionate amount of time in high risk situations and activities. This however does, simply because there seems to be no logic in play, emotional knee-jerk reactions (hoarding goods) are leading the charge. It’s frankly unsettling. Yet, I know for absolute certainty we will persevere and recover!
For those of you reading this who are business leaders, NOW is your time to shine. You may be terrified on the inside, but on the outside you need to exhibit confidence, be the shining light your team members are looking to for comfort and guidance. Be mindful of short-term needs, yet think and act long-term in your decision making.
Today, we face an enormous test of our abilities and resolve – which we WILL pass. Look COVID-19 challenges right in the eye, stand strong, take care of your family, friends and employees – WE’VE GOT THIS!
Godspeed to you all!