By Tom Paquin
Having now dealt with COVID in the US for about 100 days, we’re starting to get a better picture of the edges of the crisis, however flow-y as those edges might be. Obviously the parameters are always moving, but I think it’s important not to lose sight of the benchmarks of where we find ourselves, where we’ve been, and what comes next. For that reason, I would like to submit a few stages for consideration:
As I see it, these are three very much streamlined stages of our current crisis. I know that these aren’t particularly revelatory to anyone (what we’re all collectively going through isn’t exactly news), but I do feel like it’s important to take a step back and think about this holistically. We’ve come a long way in a short time and I think we need to take a minute and take some stock, certainly as these elements change.
We have the initiation of lockdown, which obviously vacillated depending on where in the world you were. I left out all the sub-bullets about crippling anxiety and your kids crying because you can’t go to Target but you can assume those are all in that period.
Next we have restriction easement, and there’s sure to be some sub-functions here, too. If you look at Japan, South Korea, or New Zealand, these countries who very much got in front of the spread of the virus, they saw slight upticks as life went back to normal, and there were corrections. This is going to happen everywhere.
And finally we have the next next next next normal. For a while, we were throwing around the phrase “new normal”, but in reality, those setbacks that I just mentioned, along with new investments, will mean that there’s going to be an evolution of business normal. Sarah went into detail about this recently. We will likely need to add thirty “Nexts” to this for it to be truly accurate, but where are we right now?
Right here. More or less. If you’re in Wuhan, you’re a couple “Nexts” in. If you’re in Manhattan, you’re a couple steps back. I’m in Massachusetts, and the beginning of June marked “phase 2” of reopening, so non-essential businesses are coming back online. That’s where we are, more or less. What we want to do, though, is take this timeline, and think very deliberately about how we’re considering our service investments across this spectrum. So let’s flip these stages and start thinking about them proactively.
So reclaiming the moment is obviously somewhat in the past, but that doesn’t mean that we can’t learn a few lessons from that. As the restrictions went up, businesses had a choice—shut down service operations, or find new solutions. For some companies, that choice was taken out of their hands—manufacturers shut down, fulfillment slowed, and imports and exports were dramatically reduced. Still, some businesses made smart tech decisions at this stage that are carrying them out of this crisis. We’ve been quick and proud to discuss the ways that companies have reclaimed the moment thus far.
So what’s the next step? For businesses across the board, we need to get into building a long-term strategy. Many businesses have insulated themselves in a state of austerity still, even at this point, but I’d argue that this is a strategy with reduced returns, and that service businesses need to start capitalizing on changing consumer sentiment to move towards growth strategy, even within the boundaries of an economic downturn.
Historical precedent backs up a bullish strategy in this moment. As McKinsey wrote in April, “In the recessions of 2007–08, the top quintile of companies was ahead of their peers by about 20 percentage points as they moved into the recovery in terms of cumulative total returns to shareholders (TRS). Eight years later, their lead had grown to more than 150 percentage points.” So companies that remain growth-oriented during an economic downturn, assuming that they have the resources to do so, see a significantly higher rate of return than their peers. Service demand is under many circumstances economically agnostic (obviously not always—but frequently). Copper plumbing isn’t going to stop corroding based on the S&P 500, and businesses need to use this last respite that we have to start seriously planning for the future.
For forward-thinking businesses, that’s really a matter of reinforcing the digital-oriented DNA that they already have. Perhaps it means finally looking at Remote Assistance, or planning for a business uptick with an optimization engine. Perhaps it’s an opportunity to consider how you’re actually going to market, and using this opportunity to consider outcomes-based service.
Or perhaps you’re considering a completely different plan. We’re excited and eager to tell these new stories as they emerge. And if you want to share what your company is doing, we’d love to hear from you!