How We’re Managing the Crisis
We are certainly cursed to live in interesting times. While individuals, families, communities, and governments struggle to adjust to the realities of COVID-19, the corporate world is also facing a reckoning.
Seeing the business reaction to COVID-19 reminds me of one of my favorite quotes, uttered by James R. Schlesinger, first US Secretary of Energy, in 1977: “We have only two modes — complacency and panic.”
Unfortunately, I keep finding uses for this quote, which originally applied to the state of America’s national energy policy. In The New Invisible Hand, I use it to describe organizations’ hesitation to address questions of technological disruption until they’re already foundering.
Now, the quote applies to too many companies’ preparedness for the disruption wrought by COVID-19. Seemingly well-run organizations have experienced a rapid phase-shift from complacency to panic.
Was it predictable that a precise Coronavirus would lead to a worldwide pandemic in early 2020? No. However, the potential for such a disease to cause widespread morbidity and economic destruction has been discussed for decades.
Nassim Taleb, the author of The Black Swan, makes it clear that organizations should have seen something like this coming: “It was not a black swan. It was a white swan… And it’s no excuse for companies…not to be prepared.”
The reality is that far too many companies are unprepared. As The Economist reports:
“The operating expenses (opex), like wages and rent, of all nonbank S&P 500 companies in 2019 amounted to $2.6trn. The same firms held $1.7trn in cash and liquid securities at the end of that year. On average, that was about seven months of opex. But this cash is unevenly distributed. Apple could pay for six years of opex with its $200bn war chest. Many big utilities, such as Edison International, carry only enough cash to cover a week’s worth.”
I wanted to share how Wiglaf Pricing as an organization is addressing these challenges. In short: we’re copacetic.
As a boutique consulting firm, we know that there will naturally be times when we are overflowing with projects and other times when we wish the pipeline was a bit stronger. Organizationally, we’re designed for both volatility and continuity.
This isn’t a style of work that appeals to everyone. Some professionals prefer a job that is more routine and predictable. That is understandable. But our company culture is clear about our reality, and we seek out individuals to join us who see such volatility as a feature, not a bug.
This makes us conservative in hiring and finances. We don’t want employee growth for its own sake; as a consulting firm, employees are our largest expense. If lean times come, marginal employees will be the first to go. Better not to have marginal employees in the first place.
Unfortunately, in my network, I’m already seeing very accomplished knowledge workers who thought their jobs were safe experiencing the reality of working for an unprepared employer. As the Wall Street Journal reports: “People who thought their jobs were secure, including white-collar professionals, increasingly face unemployment.”
Flexibility is a necessary characteristic of organizations and individuals to thrive in volatility. Wiglaf Pricing is designed for this.
When it comes to projects, we don’t apply a cookie-cutter approach to each client. We’re co-creating value with our clients. That means it is rare for a project to proceed exactly how it is described in the initial client conversation. Client conditions and priorities change, and to deliver value, projects must change with them.
This has made it remarkably easy to switch to a fully remote work mode. Much of our work is done remotely in normal times; we’re not just warm bodies charging to occupy a client’s office. We know when it is valuable to have in-person meetings and when it is easiest to be remote. Our clients recognize the value in this approach and understand how we can adjust together to meet unexpected challenges.
While our project base looks solid from this vantage point, we’re aware that a deep and long enough recession could easily change that. What should professionals do in down time that materializes? Work on building internal capabilities.
Pull the highest-value backburner tasks to the front and get them done. Tidy the back office. Keep in touch with your network; you won’t be meeting at conferences any time soon. Find ways to build that network (remotely). Learn new tools and methodologies. Read a lot.
Be ready to jump when conditions change, as we all know they eventually will.
Stay Healthy; Stay Sane
Overall, it is important to maintain perspective and not to overreact. Please take care of yourself, your loved ones, and your community. Personally, it isn’t easy to balance work and taking care of a toddler, but I’ll miss her so much when she’s back at daycare.
Please don’t hesitate to reach out if we can be of assistance, or just to catch up. I’d love to hear from you.