After the shock — one scenario for business

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Predictions about a post-pandemic future are premature to be sure, especially this early on in the crisis. However, people need to look ahead, if not for certainty then for preparedness’ sake.

One possible scenario has five stages. Let’s call it the “whip” curve:

  1. Old Normal
    Business activity as it was prior to the pandemic (i.e., U.S. economy growing, stock market booming, low unemployment, etc.).
  2. Shock
    The pandemic strikes, and people are more worried about staying healthy than buying things. Business activity and employment nose dive. Note during this period, the pandemic will peak and a decline in infections will begin.
  3. Adapt
    After the initial shock, businesses will find creative ways to carry on. Some may even view this as a period of opportunity to position themselves for what comes next.
  4. Re-entry
    Doors re-open. The hiring switch turns back on. A sharp jump in activity occurs as businesses scramble to fulfill backlog and meet pent-up demand after a period of stagnation.
  5. New Normal
    Once pent-up demand is met, a new level of “normal” business activity will be reached — likely lower than the old normal, at least in the short term — but by how much? At this point, the “whip” turns into a “cat of nine tails.” Resilience will depend on many factors. Is the virus still a recurring threat? Has the hard-wired psychology of people changed (e.g., will there be more saving than spending)? Will the momentum from the re-entry stage carry through to this stage as well? Will debt from the stimulus create a drag on businesses?

The “whip” is just one scenario among many that are possible, but what is for sure is that the earlier we focus on planning and preparing the less frenzied our futures will be.

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