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It should go without saying that the number one goal of all of us in this pandemic is preservation of life. There are steps we should all be taking right now to protect ourselves, our families and our communities. We have found the most succinct and fact-based overviews on actions we should all be taking are those put together by the team at EndCoronavirus.org (we volunteer there and encourage all to consider contributing your time and skills to this cause by signing up at that site).

Keep the preservation of life as your top goal of course. But it is also important to consider what we can do to preserve not just life, but our way of life. We should all consider what steps can be taken to ensure our free enterprise system endures. Our liberty is about to be challenged like it never has been before. With planning our freedoms will bounce back quick.

For many businesses this means updating your corporate strategy to ensure responsiveness to market demands and preparation to succeed through and after the pandemic.

Observations on the Strategic Situation:

• All governments, including the US federal government and state governments, are still struggling with the right answers on the best way to protect citizens.
• The power of government is at its highest during a pandemic. Decisions, wrong or right, can be enforced with the full weight of the government.
• There are lessons from the experiences in China, Singapore, South Korea and Italy. Short version of the lessons: Individual-scale methods like isolation and contact tracing do not scale and attempts to do this become overwhelmed fast. Dramatically reducing contact with others (social distancing) is required. Mobility must be constrained in ways none of us want.
• The impact of constrained mobility will impact commerce across every sector. It will impact every business and every citizen. But this strategy is our best hope of avoiding millions of deaths and ensuring survival of the nation. So it will be done, sooner or later.
• Therefore, we should all be prepared for liberty to be suspended in ways never before seen. No one in the US wants this, but the situation in Italy, where the populace is being locked down and all events and most stores are closed, may well be in our future, at least in parts of the nation.
• After the pandemic becomes controlled, normalcy will return. This has to be our planning assumption. Our system will bounce back faster if we are prepared. Which leads to the following recommendations.

The Business Situation

• With nation’s going into survival mode supply chains have been disrupted (especially any supply chain that is touched by China).
• Because of both supply chain and lessening demand, factories are slowing output or even stopping operations, which will impact profitability and employment.
• Buying patterns of consumers have changed. This is not the time to be buying a new car. This is the time to be buying canned goods.
• Government mandated travel restrictions are growing internationally and will soon likely be in place inside the US. Most corporations have already placed travel restrictions on their employees, so for corporate America a de facto ban on travel is already in place.
• The travel industry has been hit hard. This includes cruise ships, amusement parks, hotels, conference centers, casinos, and of course, airlines.
• Business conferences, an important way for companies to learn what the market needs of them and for decision-makers to learn best practices, are being canceled (as was our own OODAcon). The impact of these cancelations will be felt across the economy, since these events support the staff at hotels, restaurants and conference centers across the nation. More importantly, it will hurt the economy by impeding the ability of businesses to find and close new business.
• Marketing spend by corporations is shifting. The change in conferences was just an early indicator of this. Corporations are considering new ways of getting to business decision-makers.
• Declines in equity markets make headlines and grab attention of any investor. But another, perhaps even more important impact to our system is the impact of falling share prices on the decision making of corporate America. The market is made up of individual companies, most of which will be making decisions in a world where their company has less dry powder to invest in innovation or creation because of reduced market value.
• Historically, great innovation comes when systems are under distress. As optimists we believe this will be the case again. But this great innovation requires leadership and planning.

Three Scenarios on the Future

The report we highlighted from McKinsey examined three scenarios for business planning. The are:

• Quick Recovery: Intra-complex transmission contained and economic impact mostly restricted to the first quarter of the year.
• Global Slowdown: Sustained transmission driving a slowdown for all of 2020
• Global Recession: Transmission jumps drive a global recession for all of 2020

Our Expectations and Planning Assumptions

• At this point we believe the appropriate planning scenario is a Global Recession. Expect the global economy to either enter a recession or come very close for the majority of 2020 (there are actions that can be taken to mitigate this, so we will be tracking this closely and report if our assessment changes).
• If the global slowdown scenario transpires, unemployment will rise. Homelessness will rise. Crime will rise.
• M&A activity will still occur, but increasingly expect a buyer’s market, where the buyer will expect and get the best possible deal terms.
• Expect an acceleration of voluntary retirements as older workers decide now is the time to stop work and enjoy life.
• The remote work being put in place across many sectors of the economy and even parts of government will be shown to be a better way of work for many. From this point on, remote work will be more accepted as a normal course of business.
• Similarly, the closings of many universities and colleges and delivery of remote education will help bust many myths with how higher education is done.
• Expect big shifts in how companies market to decision-makers. More on this below.
• The federal government will continue to buy products and services. This will be an increasingly competitive market for firms seeking to do business with the government.
• The pandemic will change our way of life, but basic liberties will come back and so will our economy. Actions we take now will help shape how fast liberty and the economy come back.

Recommendations:

• Be prepared for a longer term slowdown in business (the rest of these recommendations flow from this assumption).
• Every company should stand up a cross-cutting, cross-functional strategy team to evaluate how your organization should optimize its decision-making in light of the long term pandemic driven slowdown. This team should be led by the CEO and aim to produce actionable decisions informed by the realities of the marketplace.
• Tailor strategic scenarios on the near future based on both external forces and the needs of your company. This will enable identification of variables that will impact your specific objective and enable better modeling of cash flow and investment decisions. After development of scenarios, use table-top exercises to bring the executive team together to enable action-based planning around them.
• Develop refined planning assumptions on your customer’s spending priorities by updating your market assessments. We anticipate many large firms will be increasing efforts towards cybersecurity and data analytics projects. We anticipate many will be holding off on spending money on marketing.
• Understand, with fidelity, your current supply chain in order to take steps to improve your own outcomes.
• Invest now to ensure you are making use of all your data to optimize your decision-making. This is not a time to be flying by wire. This is time for comprehensive understanding of your own company, your supply chains, your customers and your markets.
• Be prepared for heightened crime against your company. This includes both fraud and cyber attacks. Consider how to mitigate the rise of new attacks against your remote workforce.
• Review your M&A plans, whether you are on the buy-side or sell-side of the deal. Our recommendation is to connect with expert advisors (like our partners at Boston Meridian Partners) to assess the optimal timing for any event.
• Keep in mind that historically the greatest ideas and greatest companies are born in periods of great stress. This may be the time for you to invest in creation, invention and innovation. Just do it smartly.
• Study markets you have not considered yet (see our series for insights into the digital transformation underway in the Federal Government, Health Care Sector, Financial Sector, Industrials Sector, Materials Sector, Transportation Sector, Energy Sector).
• Rapid changes to protect the workforce like remote work should now be built upon to ensure the optimization of the now distributed workforce. Tap into the remote workforce to ask them how to best stay synchronized. Ask for inputs on the number of individual vice group check-ins, the best tools for formal communication vice informal, and the best way to provide feedback up the chain on issues.
• Consider how to shift your marketing budget to reach your business decision-makers. If you once leveraged conferences for in person demos, how can you do demos now? Can you deliver more by webinar or recording? And how will you meet people you have not met before if you don’t have conferences to facilitate that.
• No matter what your business is, consider your federal market strategy.

Every business is different of course, but one thing is for sure, the Covid19 Virus will threaten us all. Which leads to a final recommendation.

• Find new ways to collaborate with those you compete with. CEO to CEO exchanges on the best ways to weather this coming storm may help us all recover faster.

More References for Covid19 Strategic Planning:

• OODA Special Report: How the Coronavirus will impact your mid to long range strategic planning A strategic framework to support strategy development.
• Coronavirus: Act today or people will die: This medium post uses data, graphs and context to make it clear, we have to act or many will die.
• You Need to Tighten Your OODA Loop on the Coronavirus/COVID-19 In this particular pandemic, you need to tighten your OODA Loop and make impactful decisions quicker.  In fact, you need to make them right now.
• Russia Exploits Global Pandemic for Economic Attacks The national security implications of this pandemic are not being explored enough. This is a clear example of why they need to be and why corporations need to better understand the moves nations are making.
• The Best Analysis Regarding the Business Impact of Coronavirus COVID-19 The Corona Virus is already causing significant business impact across every sector of the economy, with disproportionate impact against sectors like transportation and hospitality.  At OODA, we’ve been tracking all new developments and consulting with our expert network to derive essential elements of information that can inform your decision making process.
• Systemic Risk of Pandemic via Novel Pathogens: This paper makes it very clear, action will have to be taken to stop this pandemic, including actions few of us would every want to wish on anybody.