As bad as they are, we’ve dealt with recessions before. This is different.

This is three kinds of crises that build on each other.

1. A health crisis. There’s a war on and the virus is trying to kill us all.
2. An economic crisis. Because of what we need to do to fight the virus a lot of people are out of work and a lot of spending is not happening. That means money is not flowing in the economy.
3. A financial crisis. When money doesn’t flow in the economy, the stock market tanks, loans dry up and money is tight in the investment infrastructure that is supposed to support the economy.

Many are focusing on this as a financial crisis and in some ways the rules don’t apply.

In 2008 we had a financial crisis. The government intervened with massive financial relief to try to prevent it from becoming an economic crisis as well. There’s an argument to be made that they succeeded. With mixed results, but not as well as if they had been able to provide more relief faster and to other sectors (like home owners).

In the 1930’s we had a financial crisis that became an economic crisis as people were put out of work. The US government intervened by hiring people for massive projects (WPA and CCC) which immediately put money in people’s pockets and also built infrastructure that was beneficial to the economy for years to come. It also intervened with spending on WWII and the ensuing economic support afterward, like the GI Bill in the US and the Marshall Plan in Europe.

2020 is different

We need to deal with the health crisis first or all three problems will get worse. Noah Smith from Bloomberg had an interesting analogy. Suppose you broke your leg and the doctor said we’re going put a cast on it but you can’t put any weight on it for 5 months. (Fun fact – that actually happened to my wife about 10 years ago). Would you say no to the cast? You can’t put any weight on it regardless and it will be much worse without the cast. Bottom line? Keep everyone home who can. Protect those who can’t and wash your hands like a surgeon. If we don't deal with this first, the economics won't get better.

Can you help with the shortage of masks? Harbor Freight gave their entire inventory of masks, gloves, face shields and the like to hospitals? Facebook gave masks they had stock piled since the forest fires in California. Do you have anything you can donate? https://www.projectn95.org/

Spread Help, Compassion & Humor  #StayHome

What can you do to help your customers? Can you reduce prices? Give stuff away? Bundle products at a reduced price? Share any data you have that helps them?

What can you do to help your employees? Send them home. Keep them protected.

Use your CEO Time to think about these things. Then act.

Advice for a Financial Crisis

Beyond the health crisis, this is a financial crisis. The advice for companies in a financial crisis is generally along these lines:

• Share the pain. Rather than lay people off, cut back on hours and pay across the board.
• Keep marketing. Adapt your message and the timing but don’t cut back. As your competitors cut back you’ll be seen as the one customers can depend on.
• Conserve cash.
  • Plan out what you’ll do when cash on hand reaches different levels. See this article on how to cut costs. Do you know what fat looks like? Muscle and bone? What will trigger cuts in each area? Use your CEO time for that type of planning.  
  • Can you improve collections? Change your prices or terms?
  • Talk to your Banker – don’t wait. There may be low interest loans available.
  • SBA resources https://www.sba.gov/page/coronavirus-covid-19-small-business-guidance-loan-resources
• Consolidate for the upturn. Financial crises end. When they do companies that survive have the ability to buy up competitors or their assets; to hire people they ordinarily wouldn’t and invest for growth.
• If you have down time or people you can pay but don’t have the same level of work, buff up the place, document your standard operating procedures, improve your systems, do more training.  

Stay Calm & Wash Your Hands

~ JOHN

Here are some things to consider about our situation on a less tactical level. Getting up out of the weeds might be a relief to some.

Scott Galloway ponders how we want to be remembered, years after the crisis, shares the three pillars of crisis management, and why over reacting is good. (Perfection is the enemy of the good). 

David Brooks gives a history of how pandemics kill compassion 

Andrew Sullivan postulates that the AIDS plague reshaped society in a positive way and says that living through a plague can be a time to reset and rethink society.   

On a less philosophical note, Rands talks about needing breaks from all the meetings. 

I have no idea how many parts this will have but I wanted to get this out quickly so I didn't take time to think up a better title. Part 1 is here. 

Read this before 11 am EDT March 19, 2020

From Quartz whose daily newsletter I find useful. A webinar about working from home at 11AM EDT. Here’s what they said:

Remote working gets less remote. Quartz is hosting a series of workshops to help ease the transition from office to home office. Today, at 11am EDT, we’ll be featuring curated tips, advice, and inspiration from both remote-work veterans and newbies, and a solid slate of speakers from Quartz and elsewhere—and it’s open to the public. Learn more and sign up here.

The rest of this post is not time bound.

From Michael Lopp whose blog  and book are great. A Few Small Things You Can Do as a Leader.

From HBR about managing workers who are new to being remote.

Don’t forget despite the virus, we’re still alive.

Colin McEnroe is one of my favorite writers. Make a list of reasons to embrace life.

Colin recommended this for a humor break – but I haven’t spent the hour to listen. It’s Conan O’Brien and a group of writers and comedians chatting and improvising in a very unstructured way. Colin says "It’s a hard feat to pull off, but they do it."

I wrote this a post about this yesterday and deleted it last night. It seemed too normal.

Nothing about these times is normal.  

Just like you, I’ve never been in this situation before. But here are some thoughts.

Change Your Thinking

Here's more. 

Now it the time to do Social Distancing.

"If you act today, you will have averted four times as many infections in the next month: roughly 2,400 averted infections, versus just 600 if you wait one week.”