The Hustle, an online supplier of articles related to business, technology, and life, summarized the impact of the coronavirus on business owners as follows: The coronavirus is scattering workforces, straining supply chains, and diminishing demand, making it more expensive for businesses to operate and harder to sell their products.
Think & Act Across Five Horizons
Although The Hustle summarizes the reality for business owners in the eye of the coronavirus storm quite concisely, McKinsey & Company deserve credit for succinctly articulating the steps businesses need to take in order to survive the storm. McKinsey & Company advise companies to think and act across five horizons if they are to survive the all-consuming coronavirus:
- RESOLVE: Address the immediate challenges that COVID-19 represents to the institution’s workforce, customers, technology, and business partners.
- RESILIENCE: Address near-term cash-management challenges and broader resiliency issues during virus-related shutdowns and economic knock-on [indirect] effects.
- RETURN: Create a detailed plan to return the business to scale quickly as the COVID-19 situation evolves and knock-on effects become clearer.
- REIMAGINATION: Reimagine the next normal: what a discontinuous shift looks like and implications for how institutions should reinvent.
- REFORM: Be clear about how regulatory and competitive environments in the industry may shift.
Of all the words McKinsey & Company could’ve used to articulate the five horizons, their decision to say “next normal” in horizon number four versus “new normal” is clever, carefully chosen, and spot-on. Next normal implies that the situation isn’t stable and that it’s both possible and likely the situation will continue to evolve. This is, perhaps, the wisest perspective a business can employ, especially as the coronavirus leaves nearly no supply chain, workforce, or company process untouched.
The Chameleons Will Survive & Thrive
An ability to be a chameleon and to adapt as surroundings, needs, and circumstances change will be the defining difference between companies who survive the coronavirus and those who do not. Just like businesses who survived World War II were asked how they survived the war, businesses who survive the coronavirus will be studied and discussed in history books. It will not be the businesses that changed nothing that will be interviewed and highlighted; it will be the businesses that learned to adapt to the next normal on a daily basis.
Due to social distancing and coronavirus-related statewide and nationwide orders, among other things, businesses have been called to make many of the following chameleon-like moves:
- Allow employees to work from home
- Adjust their forecast downward
- Develop contingency plans to continue operating
- Issue warnings to investors, detailing temporary store closings, lost sales, and other missed revenue
- Open credit lines to make sure they have enough cash to finance their operations (companies such as Hilton, eBay, Disney, United Airlines, and Royal Caribbean Cruises have done this)
The above list barely chips the surface of how businesses are responding to the coronavirus typhoon, but it offers a glimpse of the chameleon-like strategy businesses staying afloat have made and need to continue to make. This is not a time for “business as usual.” Gone are the days of tradition and in are the days of change and evolution. A business’s ability to both accept and respond to the next normal will be the difference between whether an open or closed sign hangs in their window when the coronavirus takes its last haggard breath.
Author: Evelyn Lindell