It’s been a long two months, but our Texas economy is beginning to open. Business leaders are starting to play offense which is how most of us got to where we are today. I’ve discussed my theory of how to respond to this crisis: update your vision and plan, determine your key capabilities, repurpose investment to fund the innovation on those capabilities, and prepare your team for change.
I’ve been thinking about the future. Nobody can predict what will happen to our economy in the next six months, but we can develop frameworks to help us structure our thinking. Throughout my career I’ve used four-box models to help in simplifying decisions. This is one I’ve been working on: Two categories we acknowledge as potential threats are: people and their willingness to participate in our economy, and threats from government intervention. Governments can be effective in shutting down an economy and flattening the curve; they are not good at restarting economies — only consumers can do that. Government is better focusing on the macro level, and businesses are better at product/service innovation.
If you bet on people learning to live with COVID-19 then you are anticipating business capability changes that make your product or service safe and convenient, in addition to your existing value proposition. Think of restaurants and their curbside pickup, video conferencing and online commerce. If you bet on the government continuing to be involved with protecting us from the virus, I believe you anticipate macro industry change. Tough on traditional retail and airlines, but perhaps good for pharmaceuticals and logistics. My bet is that we will move through all four quadrants before settling out in the green. That’s our track record.
Update: COVID-Related Loans
We received most of the anticipated guidance on the PPP forgiveness formula last Friday afternoon. My partners at BKM Sowan Horan have the details on how to calculate forgiveness – I would start planning for it now. While business who borrowed less than $2 million do not have to prove need, to obtain forgiveness they will still need to prove funds were used in accordance with the guidelines: payroll, business mortgage interest, rent and utilities. I expect more stimulus to come and expect it will look different from what we have been dealing with since March. It’s an election year, expect a lot of action.