Adapting to the New Reality and Supporting Economic Rebound

Jan 11

Adapt or die. This deadly phrase has been my mantra during the coronavirus global pandemic. Sadly, I mean this both figuratively and in actual terms. Screw-up, not wearing a mask, or not adapting your business could mean the death of your business, you, or someone around you. In November 2020, I spoke on a panel to discuss SMART airports and companies related to commercial real estate development. The major topic was adapting to the new reality and supporting the economic rebound during a global pandemic. How do we adapt to whatever the world looks like after a global pandemic?

The world already looks very different from 2019. Expecting everything to return to the 2019 way of life is not to appreciate evolution. Some of our offices have become a room or corner in our homes and an occasional visit to our factories, fields, and offices. Many of us have jobs and businesses where we must be present. Meanwhile, some jobs still function better with personal contact and physical human interaction. As such, those will continue to need a physical presence. The performance will have to be judged based on output and trust. Real leaders will likely rise to the top in this new paradigm. Conversely, poor-quality leaders will make their staff suffer or worry about when they will truly suffer.

COVID-19 Lockdown And Impact

The global pandemic triggered major lockdowns in economic activity. For example, in the aviation sector, the number of flights fell by as much as 95 percent in April 2020 compared to 2019. At first, air cargo volumes fell due to losing belly cargo capacity as passenger planes were grounded. All-freighter capacity took a few months to catch up. Today, both passenger and cargo planes carry cargo due to the increased need for medical supplies and medicines as countries deal with hospitalization due to the global pandemic.

No country got spared. Countries of the Global North were hard hit, just like those of the Global South, sometimes worse. Those who had no COVID plan fostered high infection rates and death tolls. Fortunately, some countries have shown success in controlling the virus. These countries have strict health protocols in-country and at their ports of entry. Their leaders work closely with their health authorities installing track and trace technology for potentially sick and infected people and regular, reliable, and fast testing for most of their population. There are now reports based on data points in categories like how well quarantine functions, trace and monitoring technology, health care readiness, infrastructure, and government performance in planning and expediting a plan to keep its people safe and the economy going. 

Response for adaptation to work

Globally, economists still expect Gross Domestic Product (GDP) to fall by around 4 percent by the end of 2020 but rebound by between 4 and 5 percent in 2021. Many businesses are finding ways to function during the pandemic. Some have even boomed because of COVID lockdowns. Online sales have ballooned to 77 percent by some accounts, leaping 4 to 6 years ahead of what it would have been without a global pandemic. What is the main tool for achieving the expected efficiencies in e-commerce for the logistics sector?

Technology has allowed us to be productive, even physically away from the office. Some companies may have lost revenue, but they have also cut costs of renting vast amounts of real estate for offices, parking, and conference rooms. Much of those can be smaller and on an office share basis. I recall visiting Schiphol Airport's administrative office years ago and realizing my peers did not have a permanent office. They had to reserve an office or conference room for whatever meeting was pertinent that day. They had trusted professionals who worked from home and bosses who understood the organization’s work.

Mask-wearing is already the norm. Shaking hands or exchanging cheek kisses are off-limits except for people in your bubble. Staying in a room, for example, a bar, restaurant, or office, with too many people has been proven time and again to be a great way to spread coronavirus. Being negligent will only cause more deaths, illness, and suffering, and it could be you, even if you got the virus before.

Planning for Recovery

Coronavirus, even with a vaccine, will be ever-present for many more years. People-centered governments and businesses do better than those just concerned about their bottom line. Start there. Ensure people can either work from home with all the necessary tools and services they need to function. Those who have to go to work make sure they and their clients are safe by practicing proper health advisory protocols,

Invest in your assets. Optimize rental income from real estate. Remember that despite a session, many are ready to invest in preparation for the economic recovery. This is the time to build that new warehouse, invest in technology, partner with other businesses to find mutual solutions to problems and network for business and use technology to boost output, save costs, and create efficiencies.

Building Resilience

While working on cutting costs and maintaining or growing revenue, including innovations and out-of-the-box ideas, now is also the time to plan resiliency. More disasters will come. Some may be small, like the loss of skilled staff; medium, like a cyberattack; or large, like a global pandemic. Every leader who wants to survive these events must have contingency plans for crises. These are key elements to adapting to the new reality and supporting economic rebound.

The chart below illustrates issues for consideration. These include first stabilizing the revenue bloodletting, reducing costs, adapt the business model to the new environment. All of this serves to restore the economy and return to a steady state of stable growth. That cannot happen on its own. Fundamentally, the most important step is stabilizing the virus through global cooperation. In a globally connected world with fast intercontinental connectivity, global cooperation is the only way to stop the virus from spreading. The only way to distribute a vaccine for COVID in a way that will truly bring its levels to a minimum is through global cooperation.

Finally, for your company, build resilience first. Employ and train your human resources for a new method of constructing your business and the economy. Unfortunately, only companies that can adapt and accept the new reality will survive. You may hear many companies and governments talking about returning to pre-COVID times. The old normal will not happen. People and businesses are already adjusting. Many have adjusted to working from home, using new technology, or just shopping online.