Ramblings from Shelter in Place
We are being tested. We are being tested as individuals and as institutions. This COVID 19 health crisis has created an economic crisis challenging millions of people and businesses. This crisis, global disaster really, has also created enormous, once in a lifetime opportunities. Disasters always reveal weaknesses or areas of dysfunction that were not as noticeable (or ignored) when things are perceived to be going well. I like to quote Warren Buffet because, besides being a successful billionaire, he is generally regarded as a wise and truly decent guy.
Warren Buffet said, “Only when the tide goes out do you discover who is swimming naked.”
We can expect permanent changes post shelter in place and post social distancing. Many have been forced to rethink how to do business and will never return to “normal”. Which is a good thing. Why should we go back to something that is dysfunctional or inefficient? Many businesses leaders have always insisted that their business cannot be carried out unless people all come together in one big office. Or that technology cannot accommodate “our unique challenges”. Well, things are getting done from home and remotely. Business leaders need to consider, “why do I need all this office space? (rent)” and “I guess my people can be trusted to get the work done without me in the same room.”
When things are going well, it is easy for everyone to be distracted by routine. We go to work, meet our friends, go home. Our work routines are usually well entrenched as are our personal relationships. To some extent, predictable.
As individuals, our personal routines have been blown up. Many are working from home or out of work and at home. Rather than seeing our spouse or partner a few hours each evening, we are TOGETHER all day AT HOME. Prior to shelter in place, it was easy to be distracted while at home in the evening as we were still thinking about the office or we could go out for dinner, drinks, a movie. Now, we are communicating on a different level with no breaks from each other. For some this is a great opportunity to reconnect, get closer. Figure out together which shows to binge watch. For others, some may be questioning the fundamental basis of their relationships, “do I really know this person? “or “have we grown apart?” Financial stress, isolation, and health concerns can create or intensify conflict and anxiety. Many are finding new channels for fellowship using technology. Church services, business meetings and family calls are happening daily online. In any event, this crisis has forced us to reexamine what we do, how we do it, and with whom. This is a great opportunity for self-examination and reflection with most of the normal distractions forcibly removed from our lives.
"I insist on a lot of time being spent, almost every day, to just sit and think" Warren Buffet
Use the TIME to reflect on the trajectory of your life, your career, and your relationships. Are you where you want to be professionally? Are you in a relationship that brings you support and happiness? Do you need to develop new skills? Take advantage of this opportunity to pull ourselves out of the routine and plot a different course, with a PLAN. Rethink what really matters in life.
Institutions and businesses are being tested and stressed. Over-leveraged businesses will probably not survive but they will be replaced by better capitalized and better managed businesses. Some businesses will not be replaced as they were already struggling with an unproven product. The more flexible business models will survive and others will disappear for good. Believe it or not, some direct to consumer food service businesses are doing well!
A surprising number of businesses (and people) are over leveraged with debt and cannot withstand a financial disruption that goes on for just a few weeks. This is a risk that has always been just beneath the surface, but this crisis has revealed the true level of risk and consequences of such leverage. It may also reveal the true cost to our economy of something that no one wants to talk about, income inequality. Economic demographics will weigh heavily in our economic recovery plans.
"When major declines occur, they offer extraordinary opportunities to those who are not handicapped by debt," Buffett wrote in a letter to Berkshire Hathaway's shareholders in 2017, highlighting the argument against ever borrowing money to buy stocks.
He continued: "No one can tell you when these will happen. The light can at any time go from green to red without pausing at yellow."
I think we always assumed that the state, local and federal governments and agencies had plans to deal with threats like a pandemic. It never occurred to us that our healthcare system might not be able to handle an epidemic or pandemic. At least, I would not have expected that basic supplies like face masks and toilet paper would be a problem. I would not expect every hospital to be equipped with equipment like ventilators in such numbers to anticipate the demand imposed by a pandemic across the entire country. But I would have thought we could quickly bring together the resources to build what we needed quickly enough.
We have learned we are TOO RELIANT on offshore supply chains to make critical items quickly enough to respond to emergencies. State governments and the federal government had diverse expectations of each other for such an event. Examples include who is responsible for maintaining emergency stockpiles? Who is responsible for medical testing and test kits? Certainly, communication among the governments and agencies is not as clear or smooth as one would have expected. While we have not compiled enough test data on COVID 19 to truly understand infection rates or fatality rates, we should be thankful that while deadly, it is not as deadly as other known diseases. The opportunity here is to learn from this disaster to know better how to communicate and quickly to respond to be better prepared in the event a more deadly infection attacks our population.
It is unfortunately clear to me that even with thousands of citizens dying and entire sectors of our economy is severe distress, politics takes center stage. Such politicization is a dysfunctional reaction to a crisis that we as citizens cannot tolerate. Politicians across the country have shown themselves to either take responsibility and show constructive leadership in time of need or to politicize and finger point. The opportunity here is we know what to do in November now that they have revealed their true level of competence and character or lack thereof.