The 10 million Americans filing for unemployment benefit over the past 2 weeks, furloughed or otherwise are representative of a Virus Economy in lockdown.
Key to note is the palpable shift of unemployment claims the prior week from what was primarily main street, retail and hospitality businesses to claims from much broader industries. Non-essential business shuttering, and growing masses in lockdown across the majority of the Country will continue the largest ever displacement of human capital. This economic downturn is clearly dire and deliberate, and until consumers can go out and consume, which means collectively solving the Pandemic through social distancing requiring conscience, and empathy the unemployment numbers will continue to rise.
The Federal stimulus strategy is intended to keep as many people employed, and or where recently unemployed personally liquid through the crisis - until the lockdown is lifted - when many businesses and the economy can restart. Thereafter, most likely stimulate again. Along with the necessary spending to provide for those people in need - staples and shelter to survive, there's little doubt the Government will have to go back to the well for more. Without consumers and most importantly consumer confidence, stimulus cannot effectively stimulate any business or the economy significantly.
Up to 80% of the American economy is driven by consumer spending. The economy by many standards, but not for all was in great shape prior to the forced downturn - so can be again, but its inextricably linked to the speed and effectiveness of dealing with COVID-19, and when significant consumer spending resumes. The stay at home edict and the adherence of all, is the cure for the virus, the economy, and our collective success to avoiding massive loss of lives, and the economical fallout of a prolonged recovery and a potential depression.
Like everyone else we do not know for certain how things will play-out. We expect the best-case scenario is that in 6 to 8 months things click back to some level of normalcy - COVID-19 is contained, and the brightest minds are creating platforms and technology to help prevent future pandemics and a collectively considered and coordinated global response and procedures to more effectively mitigate when they do inevitably occur. Consumers can and are back consuming as confidence resumes. Capital starts to flow more freely, the economy reignites, and what every business was doing before still works.
Perhaps that does happen, but what if it doesn't ? Are you really prepared to take that risk? From a business perspective strategy evaluation, evolution is necessary to assess risks, opportunities, the competitive landscape, client demand and enable adaption to change.
What can we do as business owners and leadership teams to navigate a path through this crisis? Actually, a lot - Much of what we do now will make the difference to the success of any business recovery, and the trajectory of the business as we step from surviving to stabilizing .
What’s the plan? 3 steps - Survive - Stabilize - Thrive
Survive - Triage; cash conserve, expense management, people strategy
Stabilize - Strategy; Evaluation & Realignment
Thrive - Execute; People Optimization
Regardless of a business status; being shuttered, temporarily closed, evaluating stimulus package options and impact, and or still open for business - the use of time in this moment, and through the coming weeks is vital. Besides financial and operating triage; cash conservation, expense and people management - proactive business planning and action will help competitive positioning for a stronger business and performance as we emerge from survival to focus on stabilizing.
As companies cut spending - fixed and variable costs, there are difficult choices to be made. Firms with strong capital structures have opportunities for broader choices and a greater ability to weather the storms - But that doesn’t make them more resilient or guaranty durability or sustainability. The choices we make have the greatest impact.
The clear sales and marketing objectives previously planned, budgeted for and executed are probably less relevant - not just because of diminished sales, waning pipelines, but possibly because the service(s)and product(s) may just not be as applicable during and after survival and an emergence from the crisis. It’s a compelling time to evaluate strategy and realign appropriately to be ready to attack the market and reestablish a durable business foundation and stability.
Re-forecast revenue, evaluate costs in light of changing priorities, calculating cash reserve survival timeline, with and without access to capital options. Reprioritize the work and rethink how teams can do this work. Evaluate options, by revisiting the existing business strategy - Identify which strategic goals no longer make sense - Focus on a small number of critical priorities.
Looking at the existing strategy where the opportunity was innovation, and application of new technology may mean the time to pivot and a decision not to continue a high-risk, high-reward path in this moment. Alternately, a refocus on customer retention and monetizing existing products that may require realignment of people to a new direction. Stabilizing the business in an uncertain marketplace means initially relying on core activities - what you know and can be more effectively predicted is essential. Companies practicing organizational health are already best placed to weather these storms - Leaders make calls regarding how to adapt the business strategy and act on it quickly. A cohesive leadership commits even when the chosen path is not unanimous the team must buy-in and rapidly move to execution.
With that in mind, here are some questions to answer to start figuring it out in relation to business positioning. However, marketing cannot fix what’s broken
What are you selling? does it deliver in this new health, economic and business paradigm, and what the future may look like?
Not complex, but clearly not easy questions to answer – the hard-work necessary to answer them is part of normal business practice, necessarily iterative and part of the process to adapt, evolve, remain resilient – and get you moving forward.