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  • Cedric Crocker

After the Virus: What Could the Future Look Like?

Updated: Sep 1

When I wrote Bracing for the Downturn in September 2019, we were then riding a rising economic tide that had lasted over ten years. In weeks – days – we have moved from the lowest unemployment rate in 50 years to the highest since the Great Depression.


While it was certain something would disrupt the economy at some point - and Bill Gates had warned of the danger of a pandemic - virtually no one anticipated a virus as a major economic disruptor. A CEO Magazine survey in February 2020 found CEO optimism at the highest since 2018, when the new corporate tax plan was announced.



After the long and relatively stable 2009-2020 growth period, most CEOs and companies have forgotten how to operate in a financial crisis. The only CEO at the helm of a major bank in 2008 that is around today is Jamie Dimon of JPMorgan Chase. Anyone under the age of 30 has never experienced anything approaching this magnitude in their working lives. The speed of onset and resulting uncertainty is arguably greater than in any period since the Spanish Flu pandemic of 1918-1920, when a quarter of the world’s population was infected, and fifty million people died.


As economist Robert Reich has clearly articulated, the COVID-19 pandemic is a health crisis first and an economic and financial crisis second. The virus must be controlled before we can even begin to fully absorb and project the economic and financial implications. We do know that everything from access to capital to supply chains to corporate and consumer purchasing have been massively disrupted and will not begin to recover until the virus is managed and some level of certainty returns.


In September, the focus of my blog was on preparing for a downturn and used Warren Buffet’s often-quoted statement that “Only when the tide goes out do you discover who’s been swimming naked.” Now, while some sectors are experiencing rapid growth (from telemedicine to distance learning) most companies are – or shortly will be – swimming naked as the effects of mass unemployment hit.


So, what might the future look like?

  • Consumer recovery. 70% of the U.S. GDP is driven by consumer spending. Rapid containment of the virus would result in a quicker return to employment and should result in a faster recovery. Although China is still enforcing restrictions, economic activity reached 74% of previous levels by the second week of March, roughly 10 weeks after the start of their lockdown, and continues to rise, a remarkably swift recovery. The U.S. federal programs enacted over the past three weeks provide direct financial support to individuals and employers for roughly 10 weeks, although the uneven virus containment efforts State-by-State will slow return to employment. While the very low unemployment that existed pre-virus may not return soon, the quicker consumers are earning and spending, the faster the recovery.

  • Buying behavior. Business and consumer buying patterns won’t be the same. Whenever spending begins to return, consumers will focus on the essentials: housing, food, local transportation, and healthcare. Live entertainment is quickly morphing to live streaming, while charitable contributions and savings and investment will be slow to recover. Education, telecommunications, and personal care products and services stand to gain. Bundled, higher-priced streaming media services like Disney+ may suffer as spending is curbed. Business travel spending may never recover, as companies harness effective communication tools, focus on cost cutting, and respond to stakeholder concerns about the environmental impacts of flying. Airlines, hotels, convention centers, and related services will continue to decline. Demand for office space may erode as companies look for ways to cut costs and become more effective at managing remotely. Technologies that enable engagement and providing of goods and services at a distance will thrive - from distance education and talent development to management and coaching platforms, live-streaming of concerts and other events, and home 3D printers.

  • Business value creation. Companies that create tangible value for their customers and the real economy will continue to grow. The companies that stay laser-focused on innovation, optimizing and protecting their value chains and business ecosystems, adopting enabling and transformative technologies, and - most of all - maintaining a hyper-focus on the needs of customers will emerge stronger. True value creation responds to the question: what essential problem are we solving for who and why is it better than any other option? Companies that extract value from the value chain, create non-essential products and services, or are not unique may well not survive. The implications for both established and early-stage businesses are profound.

  • Speed of recovery. While it is risky to draw close analogies with prior economic downturns at this early time in the crisis, we can take some small hope from the fact that, as devastating as it was, the Spanish Flu resulted in a relatively brief 7-month recession. It also sparked significant medical and public health innovation and – although partially coincidental – was followed by an extended period of economic growth.


In September we knew (but didn’t fully believe) that a downturn was inevitable. We now know - and can draw some comfort from - the fact there will be a recovery. Crisis always drives innovation, and companies that create sustainable value for customers and their communities are best positioned to recover and grow after the virus.



Sage Partner Cedric Crocker contributed this Sage Advice. He advises companies globally on sustainable growth.

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