COVID-19 has shifted the business landscape in a myriad of ways. Observation of this landscape can classify business response in one of 4 ways: business as usual, acceleration, pivot or hibernation. Here, we will discuss the resiliency approach for each type of business and what successful businesses are doing.
1. Business as usual
Few businesses are seeing little to no shift in operations. Examples include specialty online retailers, landscapers and food producers such as farmers. Supply and demand is seeing little change and perhaps no change at all for very small operations or virtual sole proprietorships. Virtual technology businesses are seeing a slight decline in demand due to market uncertainty, but their services are still needed. Time will tell if this downward pressure begins to ease but they should be prepared and have continuity plans should the environment begin to shift.
Businesses still need to operate, no comma and the law of supply and demand is not suspended. While COVID-19 is causing a precipitous decline (forced or secondary) in demand, others are seeing a marked increase in demand for their services. We have seen Amazon overwhelmed to the point where they have throttled delivery for many non-essential items. Medical supply chains have been strained to the maximum and essential goods manufacturers have moved to 24/7 and expanded operations to meet demand. What these businesses are focusing on now is maintaining their increased pace while minimizing employee risk and preparing for workforce shortages due to COVID-19 infections.
This is the most common scenario in the current environment. Businesses are having to make massive adjustments to their operations in order to continue to provide goods and services or meet new demands. Examples include restaurants shifting to all takeout, doctors offices implementing and rolling out telemedicine, schools shifting to distance learning and clothing manufacturers such as Fanatics pivoting to manufacture medical gowns and masks instead of sports clothing. The Fanatics story is an interesting one as they are using supplies already on hand and adjusting their operation in order to fulfill a market need, provide a public good and help their employees stay financially solvent (not to mention a great public relations story).
Some businesses and entire industries have been placed on life support in the hopes to survive the state of emergency. Entertainment venues and the travel industry is just two examples. Expense reduction and communication to customers are critical factors for these businesses. These companies should clearly communicate that they are temporarily closed for business but plan to return as soon as they are able. Unfortunately, this class has the highest risk for insolvency and many will never reopen their doors.
Good luck, be smart and keep it simple
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