This blog first appeared as Steve Wunker’s piece for Forbes
By: Steve Wunker
The coronavirus is the greatest management challenge most of us have ever faced, bigger even than the 2008 financial crisis. While the human and economic costs of this crisis are enormous, for businesses there is one positive difference: while the financial crisis had an uneven and gradual trajectory, this tragedy should have four specific phases. Each one has its own distinctive uncertainties and business strategy imperatives.
Four phases of business disruption during the coronavirus
1. Awaiting the major impacts: As much of the economy rapidly shuts down to prevent the spread of infection, the effects of these measures are sharp and severe, but businesses and households use financial coping mechanisms to get by in the short-term.
2. Withstanding the initial impact: As sickness quickly mounts, businesses run out of money or struggle to operate due to illness, and households grapple with making basic ends meet even as some government funds arrive.
3. Returning to normalcy: As sickness ebbs either through medical progress or as people have the virus and much of the population develops immunity, economic activity starts to resume due to both growing confidence and sheer necessity.
4. Sorting out new industry dynamics: As both B2C and B2B behaviors see lasting change, the nature of competition for many companies shifts for years to come.
To create strategy and a crisis management plan through the coronavirus, you will need to disaggregate the many uncertainties spinning around your enterprise. The four phases provide one axis along which to parse out which uncertainties occur when.
Four types of uncertainties
There are four types of uncertainties, and each has its own means for being addressed. We owe a debt of gratitude for these buckets to former Secretary of Defense Donald Rumsfeld:
There are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns—the ones we don’t know we don’t know.
Former U.S. Secretary of Defense Donald Rumsfeld
Using the Uncertainty Matrix to navigate disruptions caused by coronavirus
By putting these phases and uncertainty types into a matrix, you can then develop a plan to think through and respond to major strategic challenges. Each business is unique, of course, but below is a thought-starter about how to consider some of the external strategy issues confronting your business. The list should be fleshed out for your enterprise and supplemented with internal issues as well.
We know that surprises and uncertainty await in the months ahead, but we don’t need to be victim to them. By parsing issues by phase and type, you can craft a business strategy that drives success through the coronavirus crisis and positions you to thrive as it passes.
Click for a series of working papers on managing a business through the coronavirus crisis, including a more detailed version of this piece.
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