Rid­ing a se­cond wave

There is much that firms can do to mit­i­gate risk of re­newed lock­down

The Daily Telegraph - Business - - Front Page - Matthew Lynn

Lo­cal lock­downs. Test­ing and trac­ing. New types of drugs that boost the im­mune sys­tem and sup­press the virus. We are all hop­ing that there won’t be a se­cond wave of Covid-19, and if there is we will keep it un­der con­trol more ef­fec­tively than we did in March.

But with the virus still ram­pant across much of the world, and with spikes al­ready ev­i­dent in Spain, France and Bel­gium, we can’t be too con­fi­dent of that.

A se­cond wave is now a real pos­si­bil­ity. If there is a resur­gence, busi­nesses need to learn the lessons of the first one – and per­form bet­ter this time. Like how?

They should start in­vest­ing in the sys­tems they will need to cope, and make sure they are work­ing per­fectly; they should dou­ble down on the in­ter­net; and they should get ready to close units that sim­ply won’t be vi­able through a long, hard win­ter on spo­radic lock­down.

A se­cond wave will be even tougher on busi­nesses than the first one was – but there is no ex­cuse for not pre­par­ing for it.

We should re­main op­ti­mistic that the ris­ing in­fec­tion rate across Europe is just a blip.

As lock­downs were eased, as bars, cafes and restau­rants started to re­open, and as peo­ple started to travel again, it was al­ways likely that in­fec­tions would start to tick up.

With luck, masks, bet­ter hy­giene, so­cial dis­tanc­ing and a pop­u­la­tion that is acutely aware of the risks will mean out­breaks re­main lo­calised and can be brought un­der con­trol very quickly. But, in truth, you wouldn’t want to bet on it. As it re­leased its re­sults yes­ter­day, Ryanair ad­mit­ted a se­cond wave across Europe was its “big­gest fear” and that is prob­a­bly a view shared pri­vately by many com­pa­nies. The time to start pre­par­ing for that is now.

Af­ter all, when the first wave hit in Fe­bru­ary and March most com­pa­nies were, quite un­der­stand­ably, caught com­pletely off-guard. A global epi­demic might have been filed away among “catastroph­e plan­ning sce­nar­ios” some­where, but it wasn’t some­thing many man­agers had gen­uinely thought about.

They had to im­pro­vise fu­ri­ously just to mud­dle through an ex­traor­di­nar­ily dif­fi­cult sit­u­a­tion.

If there is a se­cond wave, how­ever, it should be very dif­fer­ent. Com­pa­nies have had plenty of warn­ing. And they should have learned a lot from the last four months both about what they got right, and what they got wrong.

So what should they do dif­fer­ently this time? There are three places to start. First, start in­vest­ing now. Work­ing from home re­quires dif­fer­ent

IT sys­tems, train­ing, sup­port and pos­si­bly dif­fer­ent staff in dif­fer­ent roles. Sure, you can flick a switch, and tell ev­ery­one to find some space for a lap­top on the kitchen ta­ble for a few weeks, but if it goes on for longer the changes are go­ing to need to be a lot deeper than that.

Like­wise, home de­liv­ery sys­tems can­not be mag­icked up overnight ( just look at the short­age of gro­cery slots through April) and while fac­to­ries can prob­a­bly be so­cially dis­tanced you might need to rip up the line and start again. The list will be slightly dif­fer­ent for every busi­ness.

But one thing is cer­tain. No one got it com­pletely right first time around. Sys­tems need to be tuned to per­fec­tion so that if we do go back into lock­down ev­ery­thing is pre­pared.

Next, dou­ble down on new prod­ucts. Through April and May it was amaz­ing how many com­pa­nies dis­cov­ered they had a po­ten­tial on­line busi­ness they hadn’t thought of.

On­line yoga turned out to be sur­pris­ingly pop­u­lar. So were stream­ing con­certs, or sour­dough bread lessons. Lots of com­pa­nies have started to shift to on­line prod­ucts or de­liv­ery dur­ing the epi­demic. But that was just a start.

This is the time to make sure as much of a busi­ness can op­er­ate vir­tu­ally as pos­si­ble and to throw your en­ergy into build­ing that – for the next year noth­ing else mat­ters.

And, of course, keep in mind that it is not just the in­ter­net. Who knew a few months ago that home hair­dress­ing could be such a big thing? Or take­out pub lunches? So long as peo­ple have money, they will want to spend it – but as de­mand changes, com­pa­nies have to change with it.

Fi­nally, start mak­ing the tough de­ci­sions. Un­til we have a vac­cine, and that could still be some way off, many units may sim­ply not be vi­able.

You can put peo­ple and premises on ice for a few weeks if you have to, and take the loss, but you can’t do that for a year or more.

Nor can you keep bor­row­ing money to sup­port a busi­ness with­out cus­tomers. And while the first wave saw the Gov­ern­ment launch some ex­traor­di­nar­ily gen­er­ous sup­port schemes – from fur­loughs to grants

– no one should as­sume the Chan­cel­lor will be able to do that a se­cond time around. In many cases, deep cuts, from shut­ting lines, to mak­ing re­dun­dan­cies, to giv­ing no­tice on shops or of­fices, will have to be made.

It is bet­ter to start plan­ning for that now. Sure, it might be dif­fi­cult. But it is bet­ter than let­ting the whole com­pany col­lapse.

If there is a se­cond wave, it is most likely to hit dur­ing the late au­tumn or the be­gin­ning of win­ter. That is still a cou­ple of months away. But that time will run out very quickly.

Busi­nesses, as one of the old­est and wis­est mot­tos puts it, should hope for the best but pre­pare for the worst. There are plenty of lessons to be learned from the last four months, both good and bad.

The com­pa­nies that sur­vive, and oc­ca­sion­ally even pros­per, if a se­cond wave hits will be those that learn them – and most of all start plan­ning now so that the com­mer­cial dam­age is not even greater than the first time around.

‘In many cases deep cuts, from shut­ting lines to giv­ing no­tice on shops or of­fices, will have to be made’

Brussels is among the Euro­pean cities on alert for a se­cond wave

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