What business owners need to be doing right now to survive COVID19.
To help my coaching clients I have been consuming a lot of the coronavirus data modelling to understand the likely duration and impacts of the current pandemic. Here I share some of what that data is telling us, and the advice I’ve been giving to my clients.
As of Saturday 28 March, there were 3,635 confirmed cases of COVID-19 in Australia, and the numbers are currently doubling every 3.5 days. These confirmed cases have been detected amongst some 202,000 tests performed so far in Australia. The actual number of cases is believed to be much higher, with the estimated proportion of confirmed cases sitting at just 43.78%. That equates to as many as 8,300 individuals potentially being infected in Australia right now.
The next two weeks will reveal the next six months.
If in two weeks time, by April 10, Australia has 20,000 confirmed cases (equivalent to doubling every four days) then modelling suggests we could be heading for a peak of 100,000 new cases per day by the end of June, before starting to see slowly declining rates that continue beyond September.
Alternatively, if by April 10 we have over 40,000 confirmed cases (equivalent to doubling every three days) then we will possibly be heading for a peak of 500,000 new cases per day by as early as mid May, but with a shorter tail ending late June.
These are two relatively conservative models. There are other models floating around on Twitter predicting that by April 10 we may see as as many as 100,000 cases.
But also keep in mind that the slower the rate of infection, or the flattening of the curve, the longer the duration of isolation will need to be.
All of these scenario forecasts appear to estimate that 60% of the Australian population will end up affected in the short-term, after which we will likely reach some of the benefits of a ‘herd immunity’.
You think business is already suffering in Australia? This is only the very beginning.
Beyond the obvious devastating human toll and suffering, those figures predicted above are an alarming cause for concern for the collateral damage it will have on the Australian economy, not just through the next three to six months of isolation restrictions, but during the recovery period that will follow.
It gets worse still if we consider the impact on global economy. The USA passed 100,000 confirmed cases on Saturday. Associate Professor Ben Phillips modelling suggests that by April 10 that number will climb to one million at best, and potentially more than three million.
On 23 March the Federal Reserve Bank President James Bullard predicted the U.S. unemployment rate may hit 30% in the second quarter (Apr-Jun) with an anticipated 50% drop in gross domestic product.
When the US sneezes, the world catches …. Well, the rest of that is possibly inappropriate to say now. But the key point is this: an economic winter is coming.
With large proportions of our workforce predicted to be sick at the same time, and the rest in isolation to avoid becoming sick, there will be limited resources to repair or maintain physical assets, infrastructure, and networks. As a result, we may see increased reliability issues of critical services. Will we see cases of critical infrastructure failing? Or the confluence of a natural disaster at the worst possible moment? Horrible things to suggest or contemplate, but equally terrifying potential realities that highlight the level of risk and uncertainty that we are heading into.
This period of isolation will likely alter human behaviour in the longer term.
Keep in mind that the above modelling is purely on coronavirus infection rates. We still have to consider the human psychology and behaviour that will follow during the recovery period.
Studies suggest it takes 66 days to form a new habit, which is less than the amount of time we are predicted to need to stay in isolation for. After such prolonged periods of isolation, working from home, fear, curbed expenditure, and presumably reduced wealth, not to mention illness and the devastating loss of loved-ones, many individuals will very likely develop a renewed focus on their values, plus new habits and ways of doing things, that mean we never go back to ‘business as usual’ the way it was before.
There’s a new future being created. What can businesses do now to prepare for it?
How many times in business have you wished there were more hours in the day to do everything you need to do? Well lucky you, because the world just got paused, meaning you have a perfect moment to get your house in order for a long, cold winter, and set yourself up for when the world resumes again. For some businesses, now is the time to hibernate.
For many other businesses, significant moments of change like this are analogous to making a hairpin turn in a Formula One racing circuit. While some businesses might have the luxury of being well funded and able to watch the show from a track-side box seat, many others who were bootstrapping will need to retire or pit. The rest will have to strap in to the racing car and navigate the thresholds of the laws of physics just to survive.
First, you need to brake. Hard.
First comes the entry to the hairpin turn: the deceleration. The best drivers touched the brakes briefly at the end of the straight when they first saw sight of the corner back in January, and shifted wide on the road for the best racing line through their remaining runway.
For the rest of us, if you haven’t already, you have to brake hard, right now. Don’t slowly roll into the corner, instead break so hard that it hurts — the deceleration causes your organs to shift in your body and your head to pitch uncontrollably forward, as you test the breaking-point of your seat belt. You need to act like a wartime CEO and massively cut costs and reallocate capital — convert everything into more runway, meaning more money and time.
If you are braking hard it should feel uncomfortable. Most new drivers — and by that I mean business owners who haven’t faced a major crisis before — simply won’t brake (read that as cut) early enough or hard enough, and will fly off the track into the wall, or hopefully be caught on the other side by the sand-trap of Government intervention.
Consider entering the pits.
You also need to be honest with yourself and your runway: if you know you can’t make it to the corner, which could still be easily 6+ months away, then you might need to pit now and rejoin the race later. Remember, the race is long, and sometimes the best strategy is to completely stop, repair what’s not working, do the things you’ve been meaning to do, make improvements and enhancements, do some training, and even potentially a complete rebuild.
Spend the time now on improving the vehicle (the business), enhancing the driver (you), and building your pit crew (tribes of support).
Next, you need to turn.
Next will come the apex — the moment of inflection. You need to be ready to turn sharp for the apex. Don’t turn too soon — breath for a moment, look at the corner, study it to find the right moment. Turn too soon and you will overrun the exit and fly off the road. But when the time is right, snap and turn real tight. Tighter still. So tight that you mount the curb and get half airborne.
This is the change of direction, the pivot, where you identify the new projects, products, services and activities that will have the maximum impact going forward.
Focus on your customers.
But how do you see the corner and the turn that is needed? You need to be looking at your customers. You need to hold your customers close by being there for them in these moments of adversity, and massively exceeding their expectations. Build trust and loyalty by being of service to them at a time when they may have nothing to give in return. Reward customers who have been loyal to you.
Most new drivers will either understeer or oversteer as they turn into the apex — meaning they won’t see the corner until it is too late, so they miss the apex and end up either off the track or sideways.
Third will come the exit, where you have to accelerate. But don’t hastily snap your foot down on the throttle cable. You have to accelerate slowly at first to allow the vehicle to balance, before going full throttle. This is where you hire the best talent available, acquire floundering IP and businesses that didn’t make it out of the pits, push go on new projects, and invest capital before the rest of the main market has moved.
Most new drivers will roll through the apex and wait for their vehicle to be clearly pointed straight on the road before accelerating, only to end up left behind at the back of the field as everyone else accelerates away. Don’t wait too long before hitting the accelerator again.
Now more than ever, you need to be highly focussed on your customer.
Clearly perfect timing is everything, but it is extremely elusive. To achieve an optimal apex turn comes down entirely to where you are looking. You need your eyes up, head turned, and looking through the corner, to where your vehicle needs to be after it has accelerated through the apex of change.
To repeat the point again, you need to be looking at and looking after your customer.
The problem right now is that too many new drivers are looking in the rear view mirror at today’s news of yesterday, and then checking their gauges only to be shocked by the rising numbers they are seeing. They may have taken their foot off the accelerator, but they are still idling along at high-speed into an ever shortening runway.
You need to build your tribes of support: your pit crew.
To navigate what is coming, you need to get a reliable pit crew. That team of experienced navigators and mechanics who can help guide you on what to do and when to do it, and help you keep your sanity along the way. The coaches, the mentors, the accountability buddies, the experts, and the peer groups.
As an example we have built Peak Persona to act as a ready made pit crew to help entrepreneurs find their tribe, with short sharp online programs designed to create the lasting behaviours, habits and mindset to navigate these difficulty times.
You are not alone, but equally no one is coming to save you. This is only just beginning. It’s time to strap in and double-down on human relationships that will get you through the corner that is coming.
Summary of action items:
- Brake hard: cut costs and consider selling anything that isn’t needed to extend your runway and convert everything to time and cash. Buy yourself a longer runway.
- Pit: consider going dormant into hibernation. Some startups have completely turned off all marketing activities while they do all those things in the backlog that they’ve been meaning to do. Fix the website, create systems and automate everything, complete training and develop your team.
- Build you pit crew. your coaches, mentors, advisors, experts, tribe of peers, and your soul people. Consider joining online tribes of other high-growth humans.
- Turn your attention to your customers: identify their needs, and new and emerging opportunities to pivot or iterate. This also means identifying opportunities to give first, and to exceed your customers’ expectations by being there for them in their times of need. Build loyalty and trust now by investing in helping others.
- Get ready to accelerate: it will be a while away, but this period of being on pause is the time to get yourself ready to accelerate again in the future.
My #givefirst: If you are financially impacted by COVID19 but would still like to find your pit crew and join our tribe at Peak Persona, then please reach out to me as I am keen to help you. We are also running free weekly webinars and sharing free resources on specific topics to help business owners and tribal leaders navigate change.
Data source: This article is written on the basis of my interpretation of the Australian coronavirus scenario modelling by Professor of Epidemiology Tony Blakely, and a coronavirus 10 day forecast model built by Associate Professor Ben Phillips, both of the University of Melbourne, plus a trend data visualisation by Aatish Bhatia.
Special thanks to Don McKenzie and other Peak Persona alumni for proof reading and shaping some of this wording and thoughts.
Written by Aaron Birkby (QUT Entrepreneur in Residence) - 30 March 2020