What next for Businesses ? What lessons have we learnt from earlier pandemics ?

I would like to give a few facts about how business should react during unprecedented times, especially since most of the business are locked down. Everyone is living on the hope that this pandemic would be gone after lock-down is completely removed. Each country or state are mandating rules based on the data they are collecting and taking respective decisions to either extend the lock-down or completely removing it slowly. But the basic question to businesses is that- whether these decisions are on a temporary basis or extending as need basis ?

In order to predict what would be happening going forward , I want to apply a common correlation here, imagine if you are sitting in a plane which is yet to take off and the plane is being repaired. Plane crew starts extending first 30 minute delay, and then they will extend to another one hour, and then two hours, and then three hours , it would end up being more than six hours sometimes. In between you get few free snacks and drinks. This way you will relieve pressure by sitting long hours, though you may have another backup options such as taking another flight while plane is being repaired.

But when it comes to “GLOBAL” pandemic like influenza or COVID-19 – you do not even have an option except being at home. Government regulations have kicked in, people are forcibly staying at homes and feeling frustrated. How long should this continue ? This is where the above correlation needs be applied , I want give you a hint of above mindset to prepare you mentally. To answer exactly , the previous pandemic time-frames would help us plan better.

Let us go back to history – In 1918, mankind faced similar pandemic called Spanish Flu, where 50 million people died worldwide, ironically Spanish flu spread originated from Kansas, United States and finally ended in China, whereas this time we are seeing the spread in the opposite direction. Duration of the 1918 pandemic was from Jan 1918 to Dec 1920. It took almost three years to clear the virus dust around the globe.

From an economy stand point of view , there was a clear lack of economic data. During that time, the only data available was thru print media. And some anecdotal information from several newspapers and academic studies revealed that the economic effects of the 1918 influenza pandemic were short-term. Many businesses, especially those in the service and entertainment industries, suffered double-digit losses in revenue. Other businesses that specialized in health care products experienced an increase in revenues. Also, research showed some data on shortage of labor that resulted in higher wages for workers temporarily and reduction in human capital during the pandemic. Research showed some evidences that there were economy implications for several decades after the pandemic.

Now when we look at the current Covid-19 pandemic, current economy situations , it’s impact is in no way less than previous pandemics. Only difference we are seeing is less mortality so far which is a good news on one side, but other side, worldwide businesses have been paused. The metaphor we can use now is that economy is on “induced coma and paralyzed”. Businesses started laying off workforce and started reporting financial losses and cascade effects have already taken place. So far 10 million Americans have already filed their unemployment, it is projected to grow upward of 20 million in the next few weeks.

The nature of pandemics are such that it would last from a minimum of one year to three years. The current economy has already been damaged and would continue with the damage, even further. If previous pandemic predictions are going to continue, the economy would not come back to what it used to be. Even if the virus flares out completely by June 2020, and it is in fact a very unrealistic expectations, it would take an extremely long time to repair the economy since market should feel confident from multiple facets such as consumer spending, increase in productivity, world trade should return to normal, travel regulations should bring back to normal, bring confidence in worldwide investments, human capital availability and so on.

Now the question comes to business - how should we be ready to serve customers going forward? It is now clear evident that the way we would serve the customers going forward is not going to be the same as what it used to be for the last few years. For instance, during pandemic crisis, dish company field technicians are visiting homes for repairs or new installations. Consumers are reluctant about these home visits, but business should not be stopped. Rather dish company should find alternative innovative ways to serve customers. Various innovations are required in all business verticals such as consumer buying for services or goods are going to be changed, sales & marketing approaches are going to be changed, approaches in delivering customer value is going to be changed. The advantage we have now over previous pandemics is “technology and digital platforms availability ”. Thanks to technology and it is readiness for the globe during the unprecedented times. There are plenty of new opportunities which are going to come up and fill the gaps in serving customers. Now it is the time for businesses to shift the gears and serve customers innovatively rather than waiting for long for the world to come to it’s original state.

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