Business strategy during Covid-19: Avoid destruction as best you can!
Disruption has been the ubiquitous buzzword in myriad articles over the past half-decade for authors describing startups, category killers or technology driven companies: Amazon, Netflix, Uber, Airbnb, Hyperloop One, Beyond Meat and AeroFarms are just a few “disrupters” that fit into one or more of these categories.
However, in the space of less than 100 days, COVID-19 has sidelined disruption in favour of its more menacing and spiteful cousin: destruction.
Companies across a wide swath of sectors have been forced (not chosen, as government and public health policies have diminished their markets and operating flexibility) down one of four paths: death from destruction, pivot from destruction, re-tool to avoid destruction or paralysis in the face of destruction.
Media reports across the globe have chronicled the deaths of tens of thousands of businesses. Sadly and too often, these firms were family-run for generations and community institutions in areas such as retail, hospitality, tourism, or journalism.
But it can be argued that the global pandemic merely accelerated the destruction of some of these businesses that were already operating on razor thin profit margins, failed to cultivate and steward their customers, couldn’t or wouldn’t invest in new equipment, had credit and terms of trade stretched to the breaking point if not delinquent, and their business model already under siege from competitors in e-commerce or other factors.
Despite the best efforts of their proud owners, the destruction of shuttered storefronts, workers out on the street and broken dreams has ensued.
Meanwhile, other business owners from restaurants to caterers to dry-cleaners to main street boutiques have pivoted away from destruction and embraced an expanded on-line presence, added take-out and delivery, curbside pickup, or legally collaborated with competitors and their supply chain partners to keep their business ecosystem, if not thriving, at least in some form sci-fi inspired suspended animation.
The principles and ethos that underlie movements such as slow-food, buy-local and 15- to 20-minute walkable communities have enabled these efforts. And these walkable communities, even in suburban settings, will gain new life and acceptance beyond the dreams of urban planners over the coming decade for one simple reason: they work, and work well!
For the manufacturing sector — national, regional and local — re-tooling, as a response to the destruction trend, has been an option for up to 40% of businesses according to some reports. From aerospace to automobiles to consumer durables and specialty goods, manufacturers have shown flexibility to innovative, adapt equipment and apply engineering knowledge to rework processes to meet current needs in PPE, ventilators, testing equipment, plexiglass partitions, directional signage, innovative barriers to support physical distancing and disinfectant production.
A year from now and even five years hence, it will be interesting to see how much of this re-tooling shift permanently transformed some of these enterprises.
Finally, a large swath of businesses are paralyzed as they face triple-V (virus vector velocity) forces and their destructive potential. The common thread amongst these businesses is that they rely on mass gatherings of people that are exciting/raucous/buzz generating in contained — indoors or open-air — settings. And the roster of these businesses, activities and affected employees — many of whom hail from minority communities — is growing.
Team sports events (amateur and professional), competitive (running, cycling, rowing, triathlon) races, concerts and multi-day music festivals, ethnocultural celebrations, other performing arts (ballet/symphony/comedy), annual association conventions, tradeshows, exhibit halls, summer camps, fitness studios and gyms, dining establishments, casinos, movie theatres, parades, charity breakfasts-balls-fundraisers-telethons, educational lectures, poutine-craft beer-busker or ribfests, antique car rallies, museums of all types, agricultural fairs, motor vehicle races, wedding venues and even funeral homes all make this list.
In addition, these mass gathering events and activities have their own value-chain of partners and people who are also materially impacted including ushers, concessions staff, AV technicians, food providers, facilities maintenance teams, web content developers, security firms, fence providers and sanitation vendors, and in-house resources such as sales-sponsorship-programming teams.
Moreover, these events and businesses often rely on packed mass transit systems to get proverbial “buts in seats or onto their grounds” so this is another paralyzing setback. And we also have an impact to the third sector given the the lost opportunity for literally thousands of volunteers who are critical to the success of these events and spectacles.
As we slide into the heart of Summer 2020, so many communities — from big cities to small towns — will be diminished by the absence of these events that define them, attract hundreds of thousands of people and visitors, generate tens if not hundreds of millions of dollars in economic activity, and create an infinite number of smiles and memories.
The human misery and loss due to COVID-19 is tragic and will scar us forever. Yet, even after an effective treatment, vaccine is found and/or herd immunity is reached in 2021 or 2022, the destructive impact of COVID-19 on our culture, tourism, sporting, hospitality, festivals, events and entertainment sectors will be felt for years, if not generations, to come.
So, if you can attend a local gathering, event, fair etc., and do so safely and with appropriate protection and distancing, go ahead and make a personal and affirmative statement against the economic disruption of COVID-19.
This article has been adapted from its original publication:
https://www.obj.ca/index.php/article/op-ed-covid-19-forces-businesses-face-destruction-head
