Riding a second wave
There is much that firms can do to mitigate risk of renewed lockdown
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