It’s only three months into 2020, but we already have the word of the year: unprecedented.
Unprecedented is a word that has been over-used many, many, times in the past. But this time its use is justified.
Other words and phrases for 2020 are: lockdown; pandemic; PPEs; exponential growth; COVID-19; wage subsidy; supply chain; essential services; bubble.
However, unprecedented is a word that has been over-used many, many, times in the past. But this time its use is justified. Unprecedented means that we have no equivalent experience to gauge the likely future impact. And it is this level of extreme uncertainty that makes these times so difficult.
It is this level of extreme uncertainty that makes these times so difficult
The 1918 flu was widespread and devastating for many. In 2020 though, it is the wholesale lockdown of a third (or more) of the world’s population that is unprecedented. Further, the critical difference this time, though, is the extensive connections across the globalised world rather than the relatively disconnected, isolated nations of 1918.
So, we are faced with a world that has communities and nations inextricably connected and reliant on each other. Now we are required to distance ourselves from each other for our very survival.
Given this unprecedented situation, the many commentaries as to the potential economic impact that are reliant on conventional modelling relationships are questionable. I accept that many want information on the potential economic impact. However, if commentators were honest, they should acknowledge that the level of unknown uncertainty, along with the unprecedented nature of this situation, may make our conventional models redundant.
That is why we said in our Autumn Birds Eye View that “Because of the highly uncertain information we have about the likely extent, spread, and length of the public health crisis, it would be foolish (and not that helpful to anybody) to present any short-term economic forecast with any sense of probability.”
If commentators were honest, they should acknowledge that the level of unknown uncertainty, along with the unprecedented nature of this situation, may make our conventional models redundant
It is also why we stated that “the most valuable commodity required by all now is a clear head”. Yes, it is difficult, but only bad decisions are made when you are overwhelmed by stress and/or not thinking clearly.
Just as relevant now, as it was before the crisis, is a focus on your objective(s) – what are you trying to do? why are you in business? what is your kaupapa? That needs to remain uppermost in our minds and should guide our decisions.
Without doubt, cashflow is front and centre for almost everybody. However, whether as a business, community, whānau, family, hapū, or nation, our immediate priority objective must be (as it always should have been) to look after the vulnerable and least resilient amongst us.
With this kaupapa in mind, all businesses should be using the full extent of all the government supports (wage and leave subsidy, business loan scheme, provisional tax adjustments - see our article on the government help available) to keep your people in jobs. Additional options around rent deferrals, rates relief, and/or mortgage holidays should also be explored. The costs of going into hibernation are almost certainly less than the costs of having to start-up again from scratch.
The costs of going into hibernation are almost certainly less than the costs of having to start-up again from scratch
Remember, though, there will be a time when we will be able to emerge from hibernation. It will be a world that is different, and will require different thinking, different behaviours, and different models. But this kaupapa need not change.