A new reality is dawning on business owners, and it is proving to be much more nerve-wracking than the economic impact of the initial phase of lockdown.
When countries around the world went into lockdown, business owners held their collective breath. It was very clear that some companies would not survive, in particular businesses in the hospitality, travel and eventing sectors. One business quarter later, and much like the climbing coronavirus mortality rates, we mourn the closure of yet more businesses, day by day.
More disturbing perhaps, is watching different countries reopen for business only to retreat back into a lockdown, as infection rates rise again. It is the open-endedness of this “anticipatory grief” that is now sinking in. That, and the now tangible second wave of economic impact starting to hit businesses.
Unlike the anticipated second wave of coronavirus infections, this second wave of economic impact was not as apparent as the first. It’s a combination of the knock-on effect of stalled supply chains and unforeseen ripple effects on interconnected, ancillary businesses.
Take for example a friend of mine who is a jewellery designer. She is not only enduring lockdown outside her London home base but is caught in the crossfire of different lockdown protocols. She develops prototypes for a company based in China, while one of their main clients is a Canadian company. From the Chinese company’s perspective, the country has cleared its lockdown hurdles and is in an advanced stage of restarting businesses. Canada on the other hand is where China was a few months back and is only tentatively easing lockdown restrictions.
This seemingly minor disconnect is amplified in the fashion retail business, which runs in seasonal cycles. If you miss delivery on one seasonal cycle, the entire retail ecosystem is placed in jeopardy: old, unseasonal stock becomes “dead stock” and with consumer appetite numbed by the coronavirus, the compounded effect spells disaster for any fashion retailer.
The same unintended consequences apply to other sectors. Just because restaurants can re-open does not mean that people will want to venture out while the pandemic is peaking, or they might no longer have the financial means to treat themselves to a restaurant meal. “Open for business” is no longer a guarantee of survival. Many fear that this second wave of economic impact is where the real devastation to business will occur during the pandemic.
A year ago I attended an innovation masterclass in Silicon Valley where one of the guest speakers was John Sealy Brown. He compared running a business in a disruptive era to “white-water kayaking”. A time when business owners had to not only navigate rapids and boulders with skill, agility and foresight, but also be cognisant of undercurrents and hidden dangers below the water’s surface.
Steering your business through a pandemic is like extreme white-water kayaking. You have to be so focused on keeping afloat that you can’t concentrate on how the river’s path might unfold beyond the next bend.
However, this is the time to seek out a different perspective: an aerial view of the river, so to speak. The need for business executives to speak to someone outside of their organisation is growing.
Finding new ideas and a fresh perspective is difficult in times of crisis and yet the next six months is crucial for business owners to keep testing new business models, products or services to survive this pandemic.
At Flux we always advise companies to keep an eye on sectors that operate alongside their own because when any form of disruption hits, the likelihood of that disruption also affecting your industry is strong.
It might seem counterintuitive, but now is the time to step away and view your business from a different perspective. The second wave of economic impact will be devastating to many more businesses. Don’t become a 2020 statistic.
Reach out. New ideas and fresh perspectives could come from outside your organisation or sector, and even from the most unexpected people within your own company. It’s time to consider going beyond your organisational confines.
Exploring new trails is better than being consumed by the rapids.
Like what you’ve read? You might be interested in the following thought leadership pieces:
- Understanding “anticipatory grief” to restructure your business
- Testing, testing, testing … switching from VUCA to BANI
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Image credit: Victor He