Business Strategy Through Four Phases Of The Coronavirus Crisis

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.

Four Phases for Business of the Coronavirus NEW MARKETS ADVISORS

​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.
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Former U.S. Secretary of Defense Donald Rumsfeld

Uncertainty Matrix NEW MARKETS ADVISORS

• Known Knowns – These are widely-believed tenets about your business that should be tested. Must you always use sales channels vs. selling direct? Will customers be content with self-service? This is the time to think about what disruptive innovation could do to your business. Strategy – Determine your commonly accepts “truths” and push hard to find which ones should be questioned.
• Unknown Knowns – In times of crisis, people at the front lines may know more about facts on the ground than the inhabitants of the executive suite. Find ways to share that information. Don’t cancel key meetings; this is a critical time to keep perspectives flowing. Strategy – Collaborate to find out what your organization knows that your leadership doesn’t.
• Known Unknowns – Don’t fly blind in a crisis. While it is tempting to cut discretionary market research expenses, this budget could be critical to your success. Figure out the major business issues and risks you face, and then do fast and scrappy market research about the coronavirus’ business impacts to understand how the industry is shifting. Strategy – Rigorously list out key assumptions and how they can be tested or their risk mitigated through market research or other actions.
• Unknown Unknowns – We are likely to be surprised many times during this crisis, but you can gain visibility into the future through building industry-specific scenarios and war-gaming how you and competitors will respond. Strategy – Develop scenarios and war-game competitor reactions as well as your moves.

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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.

Uncertainty Matrix and Four Phases of Coronavirus

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.