We’re now navigating through one of history’s most extreme black swan events. The repercussions of economic suppression are severe, immediate, and ubiquitous. Even if COVID-19 is eradicated tomorrow, no one knows how long it will take for the economy to recover. And no one knows when COVID will be gone.
Businesses are like a human heart – they need to keep beating. You can’t just stop business, and start it up again in two months’ time. You need to keep your business ticking over. Experts suggest the economy will either have a ‘V-shaped’ recovery or a ‘U-shaped’ recovery (‘V’ meaning a sharp bounce back, or ‘U’ meaning a slow climb out of recession). The?world may be facing its worst recession ever. Even once Corona has gone, the economy could take many months or years to rise from the ashes. However, we will conquer this. The human?race is bigger than this, and it will prosper – eventually.
On March 5th, Sequoia Capital, the preeminent Silicon Valley venture fund, raised an early alarm for businesses to be vigilant, stating: “Coronavirus is the black swan of 2020.” A ‘black swan’ is an extremely rare event with severe consequences. It cannot be predicted beforehand and can cause catastrophic damage to an economy. Sequoia’s sober message: “Having weathered every business downturn for nearly fifty years, we’ve learned an important lesson — nobody ever regrets making fast and decisive adjustments to changing circumstances. In downturns, revenue and cash levels always fall faster than expenses. In some ways, business mirrors biology. As Darwin surmised, those who survive “are not the strongest or the most intelligent, but the most adaptable to change.”
How are you cutting costs? How will you adapt? How will you rebuild it? Will you find the opportunities amongst the threats? Every business playbook and every situation is different – but amidst COVID-19, 100% of businesses will be tracing these next three steps: (i) slash costs, (ii) adapt, (iii) rebuild. This is the new imperative for business in 2020.