With half of the states loosening stay-at-home restrictions or reopening non-essential businesses, we are starting to enter
the next phase. Will “reopening” achieve the goal of limiting damage to the economy? Recent polls indicate that majorities
of Americans – while desperately in need of haircuts – don’t have any intention of going to restaurants or sporting events
anytime soon. People took staying at home so seriously and complied so voluntarily because of genuine concern about this
virus that we still know so little about.
According to a recent report by McKinsey & Co., “We need to find ways to “timebox” this event: we must think about how to
suppress the virus and shorten the duration of the economic shock.”
McKinsey has suggested that most government and business leaders are expecting a U or V shaped recovery. In both
scenarios, the virus is contained, and the economy either recovers slowly (the U shape) – or sharply (the V shape). However, if
the pandemic is not contained, the recovery begins to look more like a W – multiple outbreaks and shutdowns before eventual
recovery.
THE MCKINSEY REPORT FOCUSES ON WHAT COMPANIES CAN DO TO MITIGATE THE
IMPACT AND PLAN FOR THE FUTURE. BIG COMPANIES OR SMALL, THE POINTS ARE
WORTH NOTING:
1. Support and protect employees in this brave new world.
Increased communication, expectation setting, and morale building are key. Remote work is the ideal, but work place appropriate measures will become standard – and that will increase costs, at least temporarily.
2. Think about the next horizons of COVID-19
Don’t lose sight of what might be needed down the road. We all hope for a short-term resolution, but we need to plan for a
reality in which businesses evolve their business models to meet new consumer demand.
3. Be open to change – and plan for it
From the McKinsey report, “We might be in the midst of the largest drawdown in demand since the Second World War
… Consumers are recalibrating their spending, increasing the likelihood that spending may permanently shift between
categories and that online services could get adopted far faster.”
Essentially, we are now in a situation that, as a country, we haven’t seen since the Great Depression or WWII. The various
impacts of this – like the unprecedented yeast and flour shortage – reflect the changes we are all going through, and many of
them may be permanent.
For now, we are all in this together. Protecting our elders, appreciating the essential workers who make our lives possible,
spending time with family.
The information contained herein is intended to be used for educational purposes only and is not exhaustive. Diversification and/or any strategy that may be
discussed does not guarantee against investment losses but are intended to help manage risk and return. If applicable, historical discussions and/or opinions
are not predictive of future events. The content is presented in good faith and has been drawn from sources believed to be reliable. The content is not intended
to be legal, tax or financial advice. Please consult a legal, tax or financial professional for information specific to your individual situation.