The Most Important Aspect of Adapting to the Pandemic

The pandemic is rapidly teaching us that personal, organizational, and structural change is going to be tougher and faster than expected. Consequently, we must accept that dramatic solutions are necessary to manage, what is now, an entirely new landscape. We all need to be adapting to the pandemic.

There are several significant changes that have already occurred (and are not going to disappear in the near future) that are worth taking into consideration:

• We are implementing financial deficits at local, state, and federal levels that, prior to this, were never considered acceptable.
• Health care and service workers are receiving (long overdue) recognition and appreciation. Experts are also saying practices like home care and virtual appointments, which are eliminating marginal procedures and improving efficiency in medical care, will become a more permanent standard. 
• Social distancing policies are forcing behaviors such as hugging, kissing, and shaking hands to be revolutionized and avoided.
• The magic word seems to be “remote.” Tele-doctors, homeschool e-learning, working remotely, food delivery and pickup are becoming the new normal, but standards, expectations, and productivity are still unstable and unsustainable. Adjustments will need to be made to accommodate shifting trends and other obstacles. For example, many pizza parlors are experiencing dramatic increases, but the volume is mostly at dinner rather than a steady all-day flow. Parents are finding it difficult to work while simultaneously caring for their children. And, teachers are struggling to manage students and cover the same amount of material in a virtual classroom.

                                                         

On one hand, we need faster and more dramatic change. On the other, we need more science, testing, and technology to ensure success. Imagine how an increase in things like control groups, curves, models, and logistics could improve our effectiveness and efficiency as we are adapting to the pandemic.       

There are several key areas where dramatic and structural change will be necessary to adequately adapt to a vastly changed environment:

• The most dramatic (also evidenced in the 2008 financial crises) is that the big will survive much more effectively than the small. In the last few decades, the number of banks and public companies has reduced by over 30 percent. In contrast, the number of restaurants (about 600,000) has remained the same for years. It’s estimated that 10-20% of those and other small businesses will not survive this crisis. That will significantly alter the opportunities and challenges of small business.
• We need to focus more on efficiency and restructuring over simple cost reduction. Amazon and other tech companies have become the main targets of criticism regarding questionable practices. However, we should also recognize their contributions in expanding things like communication, home delivery, cloud sharing, etc. For example, I have a consumer products client who has lost much of her retail business. However, she has more than offset it (via sales on Amazon and on her own website) with higher margins and lower prices.
• Better management of increased risk and uncertainty is required. Companies are unwilling and unable to forecast 2021, which makes 2022 equally uncertain. Thus, capital, operations, personnel, and marketing decisions are basically on hold. However, we can look at history, industry, and probability models to provide a little more predictability. In particular, looking at alternative scenarios and their probable outcomes can be a valuable effort.
• Technology will be king. Amazon, Google, Facebook, and Apple will survive and grow as they become even more innovative and efficient. Traditional retailers with large real estate platforms and margin requirements are at great risk. Consumers are enjoying many aspects of the work-at-home, delivery, virtual lifestyle. These conveniences will be expanded and must be integrated into our systems.
• We need to face tough decisions in maximizing our success. While the specifics may be uncertain, most organizations require more technical and analytic skills. Can you provide challenges and opportunities for your best people rather than drowning them in bureaucracy? Can you retrain or replace staff who are less effective? How can you create a supportive culture that values risk-taking, innovation, diversity, and embraces the importance of learning from mistakes?
• Learn to prioritize. What is working, what is failing, and how do you devote more resources to the successes? Sometimes our fear of change limits our effort to understand that opportunities, not challenges, have the greatest impact.

The most important aspect of adapting to the pandemic that we’re currently experiencing is to recognize its significance and aggressively find solutions. It does require an openness and willingness to test new ideas. Don’t let emotion or bias affect you. Remember that passion, energy, and commitment are strong determinants of success. Take comfort in the fact that risk can be reduced greatly with testing, research, and analysis. And embrace integrated approaches that incorporate new strategies and activities. As Sheryl Sandberg said:

                                                           

Related: New and Disruptive Methods of Resolving Financial Stress