When the COVID-19 crisis has passed us, business will operate in a whole new world.
For 35 years now, Ingram’s has spotlighted companies with extraordinary revenue growth, the kinds of entrepreneurial ventures that can become pillars of the regional economy decades from now.
Or, in some cases, be gone years—even months—from now.
This year, our appreciation for rapid growth has assumed an entirely new dimension.
Thanks to a global pandemic, overreaching governmental officials, wildly flawed models of death and disease and a public just a little too willing to be told how to behave, tens of thousands of American companies that started 2020 flush with optimism aren’t even in business today. And it’s not because they just stopped growing by government edict.
There’s a lesson for every business in the COVID-19 experience, and that lesson is this: It’s not just grow or die. It’s grow and prepare, or die.
Early on in this crisis, as companies were just beginning the experiment of moving people out of warehoused office settings to work remotely from home, I had the privilege of chatting with Neal Sharma of DEG, the digital marketing and communications company in Overland Park that for years has claimed a spot on the Corporate Report 100 list of fast-growing companies.
If you ever get a chance to corner Neal for a brief conversation about business, bring a digital recorder, because he’s going to quickly spout more thought-leadership guidance in five minutes than most executives can amass in a year. He understood, even before the first of millions of unemployment claims would be filed around the nation, that the concept of operating a business was about to change forever.
And he knew that a good many of his executive peers and lots of small business owners were about to see the rug pulled from under their companies.
“You can empathize with the fear of the startup entrepreneur or that the small business owner is feeling,” he said. “I think all of us can empathize with those feelings of uncertainty and anxiety.”
Which begs the question: How could any business that had solid prospects ahead for 2020, that had full pipelines of work set up, not be prepared for the unexpected? How did they go from boom times to living, as many of their employees had been, the equivalent of paycheck to paycheck?
Will the experience of COVID-19 redefine what it means to succeed in business, and the very concept of a capital reserve itself?
“I think many businesses don’t have to confront the dangers of complacency until a crisis hits,” Sharma said. “When it does, they are forced to look at every aspect of what they’ve crated and determine if that is sustainable. The places where they have sought comfort in the past are not places where they can seek comfort as easily in the future. They are going to have to contemplate the next emergency with a greater degree of urgency and focus than they ever have before.”
That’s especially true for those close to retirement age, he said, people who feel as though they had build something solid only to find out just how fragile it can be. “I think a lot of owners do a good job of anticipating the trade-offs and planning for their wins and losses in a normal business environment, but they just don’t consider what to do during a black swan event, a major, unanticipated economic disruption on a scale like this.”
Going forward, they will—if. If, somehow, they have been able to cling to business life, able to retain staff by the grace of a Paycheck Protection Act loan, able to reconfigure their business model to accommodate a smaller customer footprint or fewer people inside the building in the era of social distancing.
What many businesses ran into as the panic set in back in March was a lack of capital reserves, the failure to have maintained solid working relationships with bankers who could quickly throw out a PPP lifeline, or a plan to keep employees productive if the worst happens, whether that’s a tornado, flood or invisible threat flowing in from Wuhan.
“If you’re not planning for the black swan,” says Sharma, who almost seamlessly moved 300 employees from office settings to remote work venues at their homes, “you may not have the resources to easily weather them, or the options that a larger business might have.”
The real lesson of COVID-19, he says: “You can’t afford to be complacent. Nobody can, any more.”