By Denise Kohnke, Chief Strategy Officer at Merit.
At this point, many of us have been on lockdown for at least eight weeks — and during that time, COVID-19 has left its mark on nearly every sector. In the midst of loosening lockdowns and tightening restrictions, dropping infection rates and second waves, CEOs must adjust to new truths in changed industries. During many conversations with my peers, a few of those truths have surfaced time and again.
1. This is a 12- to 48-month process that started in March.
As COVID-19 continues to spread and consumer spending slows, it’s like we’re in an overtime game against an invisible opponent — with sudden-death rules and no clock. Run the organization as fast as possible for an indefinite amount of time and hope it’s fast enough without burning the company out. With so much in flux, many feel this is their only option. But whether it’s an opportunity for expansion or a complete transformation, some will find ways to invent new markets. Those who take a proactive approach today will lead their industry when this is over.
2. Employees and customers are uncertain about their future.
The more you’re able to offer certainty and assurance to your customers and team members, the better off you’ll be. For example, many brick-and-mortar businesses are retrofitting their building systems to help fight the spread of COVID-19 — championing the power of healthy spaces and the technology behind them. Others are completely shifting their employee and customer engagement models.
3. Customers may not come back.
Even if you’re a growth business now, COVID-19 could mean that you’ll replace more of your pre-COVID-19 customers than expected. Customers are going through their own transformations and what they want and need today may differ tomorrow.
4. Supply chains will need a redesign.
Suppliers and partners may disappear or become too small to support hyper-growth. National borders and self-reliance haven’t been this relevant since World War II, and it’s reasonable to expect an increase in domestic manufacturing. For many US businesses, “Made in America” is back — this time with bigger government incentives.
5. There will be consolidation.
And contraction. CEOs are facing a long road to getting back to 2019 numbers. Each individual is asking if they have the energy, ability, cash or time required to reach the summit. With 32 percent of the American workforce at retirement age by 2022 (according to the U.S. Bureau of Labor Statistics), some CEOs will look to retire after business stabilizes. Others will seek mergers, joint ventures and acquisitions because they want to remain industry leaders (or be the next).
6. Physical locations can’t support social distancing without a facelift.
This impacts any industry that relies on a physical location to interact with customers and employees. Entire operating models will need to be redesigned. For manufacturing, this could mean new automation processes that maintain (or even increase) output under new safety guidelines. For restaurants, it could mean using technology like bipolar ionization to sterilize indoor air and keep guests and employees safe.
7. Telecommuting is a permanent part of the business.
It takes as little as 21 days to form a new habit, and we’re already past two months of lockdown. Workforces have proven they are productive while working from home. When team members begin to return, going to the office will be a new habit to build. Many will still want to telework at least some of the time. Even if you’re against telework, the pandemic has proven that teleworking should be part of your disaster recovery plan since the least-impacted businesses were those without a physical location. Beyond business continuity, there’s an opportunity to reduce office overhead while expanding geographic outreach for employees and customers.
8. Cash is king and runways are not infinite.
This isn’t new to any start-up CEO, but many established businesses and leaders haven’t had to deal with a pre-revenue, start-up-like environment. As the market tightens with less operating margin (negative for many), the right balance between near-term cash, long-term investing and eliminating waste will be key. Invest in your customers, your differentiation and your team members.
9. Succession and contingency planning.
The COVID-19 pandemic is a sharp reminder of our mortality and who we’d leave behind if something happens. For everyone, this is an excellent opportunity to revisit both personal estate planning and business succession planning. The discerning CEO looks at COVID-19 as the new four-minute mile — so when the next wave of COVID-19 (or another pandemic) comes, the business is prepared.
10. This is an opportunity for us all.
The entire world is going through COVID-19 together and when we focus on solving problems together, breakthroughs occur. This is an opportunity for cross-industry and international collaboration to solve problems so that we may all live our happiest, healthiest and wealthiest lives. Crisis births greatness. We all need great leaders to show us the way to the other side. If we’re able to focus and find a treatment for COVID-19 in less than 18 months, what might we do for cancer, hunger, climate change or poverty?
So, what truths speak to you and how do you see your organization adapting to this ever-adapting pandemic?
