We push pause for one hour each week to talk, share, and listen to 60+ clients and partners who are participating in our Virtual Roundtable. As business leaders, employers, and human beings, this group discusses the impact of the latest COVID-19 developments, and ideas to help each other navigate the changing reality.

These are the topics discussed on May 1st. We hope these can help you and your teams as you make decisions moving ahead.


Roundtable Breakout Group Discussions  

We were able to facilitated short discussion groups with business leaders in our virtual roundtable these past two weeks. The discussions provide a glimpse into the factors shaping how organizations need to redefine themselves ahead. What follows is a summary of the conversations and implications.

Recovery or Redefinition? Or Reimagination?

What comes next is the major question all business leaders are asking. While many are still heavily in impact planning, planning for the future is central to the conversation. The dialogue is about how quick or slow the “recovery” will be, and how organizations can best be prepared for a future post-COVID-19 world.

But it’s difficult to even think of what comes next as a “recovery” – the changes are so rapid and unstable that uncertainty reigns; the process to reopen the economy and reintroduce physical interaction will come in phases; the dynamics vary dramatically by sector, region, and even community; and there will be no return to “normal” as we knew it.

The driving reality right now is uncertainty – multiple models, lots and lots of data from varied sources, and endless scenarios.  No one knows the answers. Yet, decisions have to be made.

Two business leaders shared:

“There is so much fear of what to do and what not to do. We are in a frozen moment that keeps getting longer.”

“It is about managing new challenges. We have to think about those now, but we will go backward before we go forwards again.”

What the data show this week may not carry over to next week. The context in which planning decisions must be made is anything but certain as government leaders in every state and community contemplate the smartest and safest way to remove the lockdown, some more quickly than others. It is a phased process. Back steps will hinder the ability to build or re-establish trust, but there is an acceptance that it will happen as the pandemic ebbs and flows.  This will vary by industry and geography. Business leaders need to focus at the category level and not get too comfortable as things will shift.

We will not recover to where we were, rather, we will redefine or reimagine the path toward where we are headed.

Time to reset and reflect on important decisions that should already have been made.

COVID-19 is accelerating trends that had already been in motion but had not reached a high level of urgency for many. Now is the time to make decisions that should have been made before. The decision to be nimbler, more adaptable. The decision to be more focused. The decision to be more relevant.

It is about hitting the reset button. Hold to the things that make you special and consider how they translate to a reimagined societal context.

Internally evaluate the essentials of the brand and offering core to the business and how to continue to deliver. Identify the “fat” not needed to efficiently deliver. A crisis of this magnitude is very effective at revealing underlying problems in your approach, operations, structure, culture, offering/service, or even business model.

Ask the questions of what should be dropped or what changes or tough decisions need to be made and not put off any longer. Technology will be a big part of this exercise. Pay attention to the shifts. There is no business practice safe from this evaluation – everything is on the table.

New paradigms are emerging to frame how people make decisions.

The changing dynamics most important to prepare for what’s to come are those shaping the human reality in society. Ultimately, much of the framework for how humans are processing decisions has been completely flipped on its head. And it’s not done changing yet. The risk versus reward calculus for what were routine choices is anything but routine or automatic today.

Observing and understanding how the forces setting up a new paradigm of choice for your customers, your employees, your investors, and even your leadership matters now more than ever. Therein lies the answer to what is needed and the role your solution should play moving forward. Businesses need to be preparing for a period of redefinition or reimagination of their role, rather than contemplating how to operate in a period of recovery.

In these limited breakout discussion groups over the last two weeks our roundtable participants identified some shifting dynamics to pay attention to in defining a future role. Many revolve around the expectations of what life will be like as we attempt to map physical distancing into our mainstream lives outside of the sheltering in place mandate.

Here are some of the topics raised and trends discussed:

Public Transportation
  • Mass transit won’t completely recover as habits/attitudes (fear of disease in general) are likely to permanently change.
  • Will riders feel safe? What standards are needed for hourly/daily cleaning?  Who will return to ridership, who will seek other means of transit?
Retail
  • Retail consumers are eager to return to shopping and may even be out ahead of business being prepared to be open.
  • There is concern about having to back track and re-close if something goes wrong on re-opening. This brings a desire to ‘get it right’ and not erode consumer trust.
Gyms
  • Wearing face masks, extra time spent cleaning equipment, wait times to use machines along with adopting home workout and virtual could mean many won’t go back to the gyms, at least not like they did pre-COVID.
  • How will the gym experience be re-imagined?
Disparity of Impact
  • So many households are just trying to exist with a sudden loss of income.
  • This could lead quickly to a very real discussion of minimum basic income.
  • Class differences will accelerate the widening of a division that already existed.
Work and Work Environment
  • Many will now prefer working from home.
  • Office space changes such as working in shifts, physical distancing, face masks and other post-COVID adaptions may erode the value of the office.
  • This could lead to many no longer needing their office space – what does a “corporate headquarters” look like tomorrow? What type of physical presence is needed?
  • Business meeting attendance will take a while to recover because businesses will not likely invest in having employees travel.
De-urbanization
  • With the ability to work remotely, more and more people are going to be fleeing the cities away from places where is it less safe and into places where is it less expensive and away from the crowds.
  • How long lasting will this trend be?
Entertainment
  • Will people ever get comfortable with going to confined places (such as Great Wolf Lodge with large indoor pools, indoor concerts, etc.)?
Education
  • There has not been much talk about returning to school – when it actually comes, what will be the impact? What are we doing to reimagine the school experience?
  • Lots of people won’t be able to go back to work if their kids can’t go back to school.
  • Could the delivery of education change that requires less of a physical buildings footprint with shared campuses, rotating in-person schedules, etc.
  • Other options—1 in 10 parents are now considering home schooling.
  • There is a real disparity in access to broadband connectivity for online education – is 5G a solution ahead?
  • The “Zoom boom” reality has completely shifted expectations and potential of how education can be provided.
Animal Health and Dairy/Meat Sectors
  • Virtual visits with veterinarians have increased.
  • Some vets have used curb side drop off to keep in-person appointments but there is a huge concern that smaller family run veterinarians will close up shop and there will be fewer business owners in the sector, changing the ecosystem.
  • In the feed animal business, the change from bottling in small school size milk cartons to larger retail size containers is not an easy change and for some plants it’s just not possible, so there is dumping happening.
  • The recent news of meat packaging plants having to close also puts a major strain on the supply chain and creating challenges for farmers.
Science and Facts
  • Science means you might get a lot wrong as you are on a search to prove or disprove things. But, is science instead being conflated to be ‘evidence’ for a belief of POV?
  • People are looking for sources they trust and familiar voices. There is a human aspect to this we can’t ignore. We want to connect with the media and information sources we know.
  • There is danger in relying too much on facts and missing the narrative, the proliferation of facts and opinions brings its own fatigue if all we do is relay facts

As these, and many other, dynamics unfold they are creating expectations that will frame how consumers make decisions when weighing risks and rewards for different behaviors. It is critical to communicate early and with transparency about what to expect, what they will see, do, and experience as they return to previously “locked down” options.

Trust and the role of corporate America.

Trust matters in a crisis. But options are limited, and scrutiny is high. People are building their own networks to find information they can trust. Our current reality has revealed a scenario absent of experts – lot of questions without answers and a lot of guessing.

Business leaders can and should take action, and many already have. For example, there is a lack of standards and consistency on what ‘distancing’ means in a re-opened market and how to keep spaces as safe and healthy as possible for consumers and employees. This impedes the speed of recovery. But it also means business is stepping up to create standards, to ensure consistency.

Business leaders are reaching out across industries to come up with ideas and plans, getting key players together to solve problems and find ways to work together for the common good. But part of the challenge is coming together physically, so people are left trying to figure out how to do it.

A key question is what happens in a democratic republic and a free-market economy when people can’t “meet” with their leaders. If leaders and institutions operate more within their bubble it could result in questions about who to believe and who is in control. People will seek centers of control OR begin to assert their own control, resulting in new frameworks around politics, faith, etc.

Businesses can shape how this future unfolds in a way that government is currently struggling to do so given the partisan divide, rancor, and lack of collaboration we see today. Business leaders can ask in what way has your/will your company provide local support in a way that mattered and that builds trust and confidence?  How do you create an authentic local connection with your brand and employees during this time of crisis, and how does this reinforce you core values and purpose?  If you do not do this, you will have missed an opportunity to make a difference.

Rishad Tobaccowalla offers a fantastic framework for approaching future planning right now in his recent blog post: https://rishadt.wordpress.com/2020/04/25/the-great-re-invention-resurrect-now/


Peering Into the Gloom: Some Ideas to Help the Process 

Heart+Mind shared a few thoughts about the approach we are taking to understand what is happening and where things are headed as part of business planning.

First, the obvious two most important indicators of revenue are sales and pipeline. Consistently look at what clients, customers, partners, and even competitors are experiencing.

Second, what do we know?

  • We are already in a recession.
  • Some sectors are worse off than others and the recovery will vary by sector.
  • The stock market has historically been a good indicator of recovery:
    1. On average, it rebounds four months before a recovery beings
    2. The market bottomed out on March 23
    3. We saw the strongest 15-day rebound EVER – up 27.2%
    4. We’ll likely need some “good news” to keep things going
  • Lots of models are out there… prediction vary and are changing:
    1. Looking at five or six well accepted models can give us a sense of what might happen.
    2. Are there some directional conclusions upon which they agree?
    3. As a group, how are they changing? Are they getting more pessimistic or more optimistic?
  • The shape of the recovery will matter – U, V, W, etc.

Third, what should we be watching closely?

  • What are we seeing in states and countries that have already loosened restrictions?
    1. Infection, hospitalizations and deaths
    2. Will restrictions be reinstated?
  • Health Developments
    1. Vaccine timing – 12+ months out?
    2. Other treatments (Remdesivir, etc.)
    3. Management efforts – testing, contact tracing and protecting vulnerable
  • Industry/Employer Health
    1. Unemployment (by sector)
    2. Consumer income
    3. Normalization of mass transportation
    4. Shipping activity
    5. Airport departures / TSA figures
  • Government Financial Support
  • Consumer Behavior
    1. Consumer spending
    2. Consumer sentiment; confidence, diminishment of fear, greater sense of security, etc.
  • Stock Market

Articles

Finally, we found the following 21 articles we feel you are likely to find useful and helpful in the different perspectives they offer with respect to how to be planning for the future.

  1. Focuses in on the biggest indicator of economic recovery being the control of the virus itself, and claims the recession is going to be much longer than many economists anticipate
    https://www.vox.com/policy-and-politics/2020/4/9/21212743/coronavirus-economic-crash-2020-recovery-stock-market-covid-19
  2. Provides analysis on the different shapes that economic recovery may take and what factors each shape depend on
    https://www.cnn.com/2020/04/02/economy/recession-how-long-will-it-be/index.html
  3. Focuses on the shapes of the recovery, and what it will take to come out of the recession, including exuberant consumer spending, employment rates, etc.
    https://www.inquirer.com/economy/what-post-coronavirus-economic-recovery-v-shape-joel-naroff-20200412.html
  4. Discusses how each economic forecast model leverages health response on one axis, against the effectiveness of economic response on the other, but that each model is ultimately wrong as it uses the GDP as the yardstick of the return to normal.
    https://www.forbes.com/sites/nishandegnarain/2020/04/22/not-back-but-forward-what-the-post-covid-19-economic-recovery-models-are-getting-wrong/#60dea3a47abb
  5. A look at the staggering economic outlook, leveraging such indicators as manufacturing, corporate earnings, stock idexes, etc.
    https://www.usnews.com/news/economy/articles/2020-04-27/earnings-data-reports-this-week-to-reveal-mounting-economic-tolls-of-coronavirus
  6. Focuses in on various economic trajectories, while look at household wealth as a key indicator of a bounceback
    https://www.vox.com/policy-and-politics/2020/4/19/21227061/steve-mnuchin-economy-recession-growth
  7. Conjectures that there is no reliable portrait of the future economic outlook, but looking at the return of activity through the lens of energy use, pollution and subway rides, to name a few, are helpful indicators
    https://www.cnbc.com/2020/04/22/a-u-a-v-or-maybe-a-nike-swoosh-economists-try-to-predict-what-a-recovery-will-look-like.html
  8. Zeroes in on one of the most powerful indicators of economic activity, airline travel, as a way to measure a rebound in America
    https://www.lawfareblog.com/international-air-travel-indicator-covid-19-economic-recovery
  9. The reality that of how influential the IHME model is but how much it can contradict other models, leading to the need to triangulate several different models to predict the future, which many states and national government officials are doing
    https://www.washingtonpost.com/health/2020/04/06/americas-most-influential-coronavirus-model-just-revised-its-estimates-downward-not-every-model-agrees/
  10. Many businesses are leveraging GIS-powered systems to incorporate data from multiple sources to drive decision-making and behaviors
    https://www.forbes.com/sites/esri/2020/04/10/business-resiliency-in-the-time-of-coronavirus-part-2/#589042541f86
  11. Global stock market can be the best indicator of truth, especially in a time when we are awash in data from multiple—often times, competing—sources.
    https://www.forbes.com/sites/richkarlgaard/2020/03/29/economic-forecasting-in-the-age-of-coronavirus—3-tips/#272db5ee6e78
  12. The article discusses how rolling forecasts should incorporate both macroeconomic and company-specific data to identify major areas of EBITDA risk. The forecasts should also identify second-order impacts, such as geographical supply-chain disruption and employee dislocation, as well as likely sources of cash leakages and customer-liquidity projections.
    https://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/the-cfos-role-in-helping-companies-navigate-the-coronavirus-crisis
  13. The economic reality and resuming to normal will be extremely variant industry to industry, which means returning to work for many will be gradual and likely messy.
    https://www.cnbc.com/2020/04/09/how-businesses-are-planning-to-bring-workers-back-after-coronavirus.html
  14. Claims that the months ahead will be quite volatile and dynamic, and believe that leaders should pay close attention to the efficacy of the health system surge, the scaling of traditional public-health approaches, the development of antibody testing, the nature of immunity, and innovation.
    https://www.mckinsey.com/business-functions/risk/our-insights/covid-19-implications-for-business
  15. Focuses on the butterfly effect of the coronavirus, with aftershocks that will permanently reshape our world as we remain in a long emergency that will usher in realities like rising nationalism and a migrant crisis
    https://www.fastcompany.com/90488665/the-coronavirus-butterfly-effect-six-predictions-for-a-new-world-order
  16. With working from home the new–and perhaps permanent– normal, we will see a shift to trust-based work cultures, shifts to increased customer inclusivity, and creative collaboration tactics
    https://hbswk.hbs.edu/item/how-the-coronavirus-is-already-rewriting-the-future-of-business
  17. Outline many big ideas we’re beginning to see emerge at both macro-shift levels, e.g. rise of new federalism and at the trend level, e.g. rise of telemedicine
    https://www.politico.com/news/magazine/2020/03/19/coronavirus-effect-economy-life-society-analysis-covid-135579
  18. A focus on the emergence of an internet-based society, smart-city infrastructure, a shift to cleaner transport, etc.
    https://www.forbes.com/sites/miriamtuerk/2020/04/08/coronavirus-will-permanently-affect-how-cities-work/#50fda8081da9
  19. Discusses the permanent changes that have occurred in the workplace and will stick, including working remotely, doing virtual client sessions, with traditional office setups fading into a relic of the past and leaders letting go an illusion of control.
    https://www.wsj.com/articles/coronavirus-will-permanently-change-how-we-work-11584380290
  20. The impact of isolation on single individuals creates grim outlooks and a change on how they meet people and engage once the new normal resumes
    https://time.com/5819187/dating-coronavirus/
  21. Focuses on how the virus will radically change the trajectory of history and the world as we know it, perhaps ushering in necessary changes like an improved, more fortified healthcare system, new political systems, etc.
    https://www.latimes.com/politics/story/2020-04-06/coronavirus-crisis-historic-event-change-america

SURVEY DATA

Please reference the additional documents provided for our weekly tracking data findings and slides that we have shared.

Also, please go to https://heartandmindstrategies.com/covid-19/ to access any of this information at any time. Please feel free to share and use however is most helpful for you.