The black swan has landed, leading to changes in business, society and personal lives. I have received a number of questions concerning when we will return to normal. With this in mind, we will examine the three stages of this sudden impact event over the next several columns.
The first phase, also known as the dirty bird stage, is almost over. The arrival of the COVID-19 pandemic was sudden, came without warning and did not allow time for preparation. The impact of the dirty bird has had far reaching effects on a broad range of businesspeople, government and society. When compared to other black swan events such as Pearl Harbor or 9/11, the effects of this pandemic are broad and deep.
Approximately 40 million people in the U.S. alone have lost their jobs. In addition to job losses, much of society is on a lockdown that has been very detrimental to the service and manufacturing industries. Demand destruction has rippled through many businesses such as restaurants, schools, universities, airlines and hotels.
Despite stimulus checks, small business assistance and some support for agriculture, this temporary bridge during Phase 1 has moved many individuals and businesses back to the basics.
Businesses and personal lives are in a state of shock and numbness to the surroundings. Many have lost track of time and are anxious about negative news events highlighted by mainstream and social media. Time is needed to absorb new information and conduct a reality check of business and personal lives. Fortunately, Phase 1 occurring during the spring season provides longer days with warmer weather for a sense of optimism in an environment that is very uncertain.
In Stage 1, more individuals and businesses are putting emphasis on financial documentation, record-keeping and building liquidity using personal cash or funds from government assistance.
Other businesses have been shut down or their employees are adapting to working at home or in an environment with social distancing. The dog barking and children crying in the background during online meetings is a new reality for many and is being accepted as part of the “new normal.”
Essential workers and medical professionals are closely watching how quickly preventative health procedures are being implemented. In Stage 1, many individuals are finding more time to simply enjoy life while avoiding three-hour commutes. During the lockdown, many children are learning basic skills such as cooking and finances while spending more time with parents and grandparents.
Stay tuned for the next column when the dirty bird turns into the angry bird in Stage 2.