Entrepreneurs and Covid-19
“Beware the Ides of March,” William Shakespeare wrote. But my wife and I ignored that sage advice, to return home from an overseas winter respite under the raging Covid-19 threat. President Trump had barred U.S. entry to European nationals (except, at the time, citizens of the UK and Ireland) and only a few airports were open for flights from Europe. When we landed in Chicago, the chaos in the health-check line threw “social distancing” out the window. Even though we had no symptoms, we were put on a two-week home quarantine. That was seamlessly extended with Gov. Tim Walz’s stay-at-home order.
Since my return, I’ve talked to a few entrepreneurs. The common theme has been, “What should I be doing?” A shock of this scale has created a profound shift—for them, their employees, and customers. The pandemic has altered their carefully crafted plans, and they wonder if things will ever return to normal.
Here is a sampling of practices they have instituted, gleaned from our discussions:
- Figure out how to work from home and plan to do it indefinitely. The need for social distancing will not blow over soon. Some of your team who might be high-risk may be working remotely long-term.
- Be transparent with the team. It helps to be a calming voice. Just provide the facts; complete honesty and openness is essential, avoiding either happy talk or doom and gloom. Treat team members as intelligent people whose continued loyalty is paramount.
- Step back and anticipate how events may unfold. Prepare to respond to those contingencies.
- Prepare and communicate daily. Accurate information is the best antidote for rumors.
- Reduce the burn rate. The goal is to have enough cash to last at least six months. This can require drastic action. Since payroll is usually the biggest expense, salaries may have to be reduced. If so, an across-the-board pay cut is better than laying off a few people. It preserves cash, emphasizes “we’re in this together,” and retains employees for future growth.
- Promise to restore salaries to previous levels when things get better and pay the amount reduced in non-cash compensation such as shares in the company.
- Don’t expect investment dollars to help you out. Investors smell a sizable return on blue-chip stocks, given the market’s precipitous fall, so they’re unlikely to be interested in investing in an emerging company for a long time.
- Reach out to mentors and lean on their expertise. Think of some out-of-the-box solutions. Explore ideas that may seem radical, but may be just right for the times.
- Experiment. When events like these unfold, many high-stakes decisions need to be made with speed and incomplete information. Respond by adopting a test-and-learn mentality. Try controlled experiments but be ready to change, or pull the plug fast if they’re not working.
- Stock up with essential supplies. Expect shortages of components, regardless of where they come from. If you can, stock up a little more than normal.
- Protect your culture. Create a culture of sharing ideas, best practices, success stories, and challenges, as well as providing support. Remember, culture eats strategy for breakfast.
Winston Churchill supposedly said, “Never let a good crisis go to waste.” This crisis will end; however, we will see a dramatic restructuring of the economic and social order. Entrepreneurs, even in the midst of their present problems, need to collect, retain, and brainstorm ideas for the inevitable new normal. Some ideas can be deployed now; others may be opportune later. No sense in wasting this game-changing circumstance.
An incomplete list of the areas that hold promise for entrepreneurs are:
- Remote working. All aspects, including security requirements and safeguards.
- Digital tools. Collating best practices from others and allowing teams to effectively co-create, communicate, share documents, and manage processes.
- Health care systems. Solutions are needed in in-person and virtual care, and the ability to meet a potential rapid surge in patient volume.
- Public health approaches. Apps for best practices in an interconnected and highly mobile world; rapid response to control epidemics in any part of the globe.
- Medical equipment. Interchangeable parts to rapidly create, as needed, a variety of critical equipment.
- Education. Institutions to integrate classroom and distance learning.
- Supply chains. Respond to pressure to become more local rather than remain global.
This pandemic has exposed vulnerabilities in our present global systems. The ultimate goal will be to make our systems more resilient to shocks and to react better when we encounter them. The present adversity offers a golden opportunity for entrepreneurs, even as they struggle with present problems, for potential opportunities by capturing insights. Every problem that we are encountering has a potential to create a new normal. After all, it is entrepreneurs who change the world.
Rajiv Tandon is executive director of the Institute for Innovators and Entrepreneurs and an advocate for the future of entrepreneurship in Minnesota. He also facilitates peer groups of Minnesota CEOs and can be reached at firstname.lastname@example.org.