2020 has been quite a year. Already. And we are only three months into the year. As we enter the second quarter, we continue to face a world of increasing uncertainty. It is such a strange world we currently live in.
Our work lives have moved home along with our kid’s school. We are learning new degrees of separation between our work, school and home lives. Much of this is driven by the action to isolate and stay home. While this is due to the pandemic outbreak facing the world, we are all dealing with it in different ways. For some, it is a nice break from the daily commute to the office. While others are finding it challenging to maintain a healthy balance between work, family and being home 24×7 weeks on end.
Companies have had to drop everything and pivot on a dime to support employees moving from their office to their home. While others have already shuttered their operations due to the lack of business. Moving employees en masse to a ‘work from home’ situation is challenging by itself and better left for another missive. I did outline a few thoughts on how to work remotely for an extended period of time in this blog post.
There are, however, three significant hurdles that enterprises are facing in 2020. And beyond.
The first hurdle is the pandemic outbreak. The outbreak, which started at the end of 2019 has created significant fear and disruption across domains. In addition, it caught most enterprises flat footed. Three months in, it continues to create uncertainty for enterprises.
Most enterprises have long-since had disaster recovery and business continuity plans in place. Pandemic outbreak plans are very different and go well beyond traditional business continuity plans. Pandemic outbreak plans take into consideration aspects not covered in business continuity planning. I outlined my thoughts on ways to prepare for a pandemic outbreak in this blog post. It should be noted that pandemic outbreak planning covers far more than setting up employees to work from home.
As the pandemic outbreak continues to impact us around the globe, it creates continued uncertainty to our businesses. When will it be over? When will a vaccine become available? We do not know the answers to those and many more questions that are needed to remove the uncertainty
Enterprises will need to consider the impact to their business long-term from the outbreak. There will be an end at some point. It likely will not be abrupt nor definitive. Even if significant improvements are made, it is likely that some communities of workers will be less likely to immediately return to work for fear of risking infection. How will companies respond to these changes over time? Are there changes to how businesses operate in the future?
The second hurdle is the economic downturn. In 2019, while the stock markets were headed to fresh new highs, there was a changing in the winds that was subtly apparent. Most were relishing in their new-found wealth instead of heeding the warning signs. And that was before the pandemic outbreak started.
Since the start of the year, the markets have already lost 30% of their value and continue to act in a volatile way. Generally speaking, economic markets do not react well to uncertainty. The pandemic outbreak is adding plenty of fuel along with general fear among societies.
The question is: How deep will the downturn be and how long will the recovery take? There is talk of a quick recovery which leads to a ‘v-curve’ compared with the longer ‘u-curve’. A v-curve only happens when the factors that drove the downturn are quick and short-lived. The pandemic is driving factors and uncertainty that is impacting the economic situation over time. The longer the uncertainty exists, the less likely a v-curve is possible and more likely the u-curve recovery will happen.
How will enterprises respond to another economic downturn just a decade after the last one? Based on the past decade and the severity of the impact, it is likely to impact companies much more than the 2008-2009 downturn did. Were the lessons of 2008-2009 learned? Have enterprises prepared adequately to address it? Based on initial research, the short answer is no to both questions. Add to that a one-two punch of the economic downturn coming on the heels of the pandemic outbreak and it doesn’t bode well for companies in the near term.
The last hurdle is the social impact that the pandemic outbreak and economic downturn will have on society and how we function. As mentioned, it is likely that even with an uptick in progress against the COVID-19 Coronavirus, there are communities of workers and customers that will be hesitant to immediately return to work and normal life. These changes, over time, will have a dramatic impact on the economic recovery process and timeline.
Beyond the basics, expect to see changes in how people work. Will open office plans still be in favor? Will work from home be increasingly more common? Will there be a change in the number of physical, big in-person events that are held? Will airplane travel be as popular as it was before the pandemic hit? How will society and companies respond to the health of employees and customers?
How will enterprises prepare for the next hurdle and to the impending questions? There are lots of unanswered questions which just leads to more uncertainty. One thing is certain. The world will be very different once we get beyond this.