The coronavirus has been devastating in its impact on our lives and businesses. Every hour, the news seems to grow more dire in its tone and the situation more challenging to address. Still, this isn’t the first time we have faced challenging situations. 9/11, SARS, 2008’s financial debacle, the Fukushima Daiichi nuclear disaster, MERS, and Black Monday in 1987 were all surprises that shocked our nation. These events threatened both our physical and economic health.
There is one recurring theme in the recoveries we achieved after these disasters – U.S. citizens and businesses are resilient. A U.S. recovery frequently reaches pre-disaster levels in the same or shorter time frame than it takes to reach the bottom of an event’s downturn. This is important to keep in mind. As we struggle to make our deliveries, pay suppliers, and keep our workforce intact, we need to scavenge time to prepare for the recovery. It’s important to use this time to plan how you are going to respond, how you are going to fund work in process, and what issues you are likely to incur.
It’s important because the rebounds after disasters have a dramatic bounce at the beginning and then the acceleration in growth slows until the rebound is back on pre-event trend lines. A significant portion of the bounce is pent up needs that existed before the interruption. Downturns caused by disruptive events like the COVID-19 pandemic, the Sub-Prime-Induced Great Recession, and 9/11 created V-shaped dents in the market. General market downturns look more like a bowl. They have a lingering low section and the downturns and upturns are not marked by changes of more than 50% over a short period of time. In 2008, sub-prime loans tanked the economy, not a lack of demand for growth. IMTS 2008 was one of the best, suggesting that America was retooling, but, on that Friday, other issues drove the markets into a spiral that hit bottom in June 2009. By September 2009, manufacturing technology orders were up by nearly 50% from their low in January and growing.
This trend isn’t a manufacturing technology monopoly. The International Air Transport Association, in their Chart of the Week on Jan. 22, posted a look at the rebound in travel after previous major health threats like the Avian flu, SARS and MERS. In each instance, the pick-up in travel rebounded faster than it fell during these disruptive events. The point to be made is that while you are doing everything possible to protect yourself, your family, and your business, take time to lay out how you will expand to meet the fast pace of the recovery when it starts.
Take the time now while the market is down to plan how you will capitalize on the eventual upturn. Remember what happened in 2018. In the last quarter of 2017 and the first two quarters of 2018, the market grew significantly and continued to expand through the beginning of 2019. Supply channels were tight, employees impossible to line up, customers were expecting immediate attention, and you likely didn’t have the time to strategize. Use this time to get a plan in place for when the market rebounds. Remember, it is just as important to have a scaling plan in place for when a threat is eliminated as it is to have a disaster plan in the event of a threat.
