Business Owner – Covid-19 is NOT an Economic Crisis
As you would expect, we have been working closely with our clients on crisis response given the new market dynamic of COVID-19. Businesses that show resilience and nimbleness and can respond quickly and effectively will be much better off than those who don’t. Naturally, the current market dynamic will, and already is impacting both the top and bottom lines for many companies in many sectors. The financial metric that matters most right now is cash. Cash is not only the most important thing when scaling and growing a business but is also the most important thing in weathering the storms of market changes.
This is NOT an economic crisis
Reality is, that although we want businesses to be quickly developing business continuity plans, it is not about finances and not about economics. This is NOT an economic crisis. Rather, this is a global physical and mental health crisis. I am not in any way taking away from the economic impact, which absolutely will devastate many businesses. However, if we don’t identify and address the true problem, we will get it all wrong.
Over the last few days, the markets have been waiting for the United States stimulus package. The package was just agreed to by Congress and the US will be injecting $2 Trillion into the economy. Markets will rally today, which will make many investors feel much more confident. However, in my view, this is the wrong focus. Unless we focus on the true cause, we are just band aiding. In Canada, we have focused more (to our credit) on what this is – a health crisis. It won’t matter how much the USA injects in order to try to give the economy a kick. This will all be a waste, if they don’t deal with the underlying issue.
This is a physical and mental health crisis
In business, it is too easy to get focused on financial metrics. We must have financial measures of health and wellness of a company, and we need to look at the data daily. That said, if we don’t deal with the global health crisis first and foremost, there will not be an economy to care about. This is a macro level issue right now given its global nature. However, it represents an error that business leaders often make, which is focusing too much on the wrong thing and not addressing the true underlying issue. Your business simply must recognize that the issue that you must focus on first here is health, not economics.
Sorry to say, not all businesses with make it. I get that, and that is very unfortunate. However, the more businesses and the more leaders that step forward and do their part in addressing the true crisis – the global health pandemic, the better off our economies will be.
Cameron’s Call to Action
- Get your perspective right. If you are focusing mostly on economics, it is time for a fundamental shift in thinking.
- Make sure that you and your leadership team are focusing on the main thing, which is NOT the economics of your business, but the health crisis.
- Even if you are panicking, know that putting staff at risk in order to bring in some revenue to slow the bleeding will only create greater long-term problems.
- Remember that if you get this right, you and every other business will sooner be able to rebound, rebuild and or shut down and start over, if that is what is needed.