Business Prepares For Post Covid

At the current moment, the focus of many individuals remains on the COVID 19 health crisis and then the situation in the US. While this happens, a large amount of change and news is coming out in the business world. Some of the largest names are releasing concerning statements or are running from making those statements. Choices that are made during this time period have the potential to change business fortunes for the positive, but due to the nature of the environment, it is more likely that they will instead break the back of the business. Leadership is needed to be competent now as the good times have ended, and they are needed to steer the ship through the rough seas.

Unreal And Unpredictable Cashflow Changes:

Entire sectors have had rapid changes in demand and also the use of them. For the service industry, it has exposed the lack of reserves to fall back on although the decrease of demand is larger then what even the most responsible could have prepared for. How firms deal with these changes is a make or break moment. While costs could decrease even the choice to fire employee’s like Disney has made comes with a consequence. If talented or developed employees are cast away. While at the end of the crisis, rehiring perhaps could occur this destroys some trust and also has a chance to make a recovery harder. In bad business times, having the best people is what could keep things moving.

Yet for many, the budget does not allow them to keep their staff. This is especially true of the numerous small businesses that power entire regions and contribute a large amount of employment to many people. However the news is full of choices that have been made to keep more expensive employee’s that may not be the best to help with the recovery from the current moment. Self interest when it does not align with the business can often hurt firms, yet at the moment, it is even more devastating. Employee loyalty has allowed some to continue, and they will bounce back better. Yet for the moment keeping people on for that bounce back is hard to justify if one purely looks at the current numbers.

Changes To Expectations:

This is something that is going to be heard for many companies. However, this also needed. The future that was worked out prior to the start of this year is not going to be one that is going to play out. Estimates and figures need to be changed so that the actions based on them also can change. However this means that firms will have to show the damage and also make news plans. Shareholders and investors could panic if they show real information. Yet for companies to do well honesty is crucial so that problems can be addressed and the right choices are made. For some companies, it may be easier to be honest than others.

If the future remains being viewed in pre COVID times, then mistakes will continue to happen, and firms will take the full force of the changes. Operating in a false reality may allow an investor call to go smoothly, but the profit and opportunity cost will be the cost for the short term relief. Yet if people are leaving companies then if the failures that appear later are not attached to them then perhaps denying reality a little longer is worth it for the individual. Yet if firms do not wish to end in the years following this crisis, they need to push back against the temptation to daydream about what was once around.

Change Already Has Happened:

Already lending institutions and financial markets have adapted. Plans are being draw up by the largest and most powerful companies and groups in the world. In contrast, the average citizen is focused on making it through the day they are preparing for economic changes that have already been given signs. Warchests are being prepared for the opportunities that some have identified or resources are being held close to the chest to see how the environment ends after the situation calms down. An explosion of activity as data is gathered and plans finished can be expected.

A long term view of this could see ownership change of a large number of assets. Fears exist that this could see large firms take possession of a large number of assets as individuals are forced to sell. This will see the wealth further moved to managed assets and away from the people. While many individuals are part of this system with retirement plans, this is still moving money away from the direct control of the common people. Perhaps this can see the market become less wild as it is managed by rational firms that are putting the effort in to make choices. Economic models that have failed to show human action may start to align better with reality as firms that use them control an increasing amount of the assets.