The game changer

By Kevin-James Fenech 

Kevin is the founder and owner of JOB Search - jobsearch.mt and FENCI Consulting fenci.eu.

The prime minister’s statement last Sunday wherein he stated that the COVID-19 vaccination programme would commence in early January and that by May 2021, our country will be back to ‘business as usual’ was literally a ‘game changer moment’.

The vaccine always was the game changer to the COVID-19 pandemic and that moment has almost arrived.

This now means that businesses need to start preparing for May 2021 when a gearing-up process will rapidly unfold and the first out of the blocks will gain important competitive advantage.

I predict a V-shape recovery post-Easter 2021 and this means that the businesses which managed to retain their best talent and have the cash reserves to withstand the COVID-19 tsunami without too much downsizing, will come out stronger since they’ll be able to carve-up market share and ride the recovery wave strongly.

Whereas the anemic businesses which enter the recovery phase heavily downsized and full of debt will lose opportunities and take much longer to recover.

I predict a V-shape recovery for our economy because despite the ‘brutal intensity’ of the current COVID-19 shock, I still think it is different to the last two major global recessions, namely the 2001 investment bust and the 2008 financial crisis.

The cause of the current shutdown is not market failure but a global public health emergency which is entirely dependent on the vaccine.

In fact, I believe there is a lot of pent-up demand for the very sectors which are currently suffering such as retail, food & beverage, hospitality and tourism in general.

This is good news for Malta since tourism for Malta will mean a huge external injection of money into our local economy post-spring 2021 and will be the motor of our recovery.

Furthermore, the governments in the EU have all provided huge bailouts and financial support to protect most from the economic hardships of this pandemic which hasn’t always happened in previous recessions.

My advice therefore to any business is to withstand the winter squeeze and plan for a strong recovery in spring.

The crucial word here is plan! You need to plan for the recovery so your business hits the ground running and now is the time to do all the groundwork.

This means forecasting your own individual recovery (the how and when) and what resources you need to fuel that growth recovery (headcount, cashflow, advertising, etc) and decipher what market strategies you need to have in place so as to retain and/or gain market share since there are going to be plenty of opportunities in 2021.

Failure to do so, out of fear or an inability to react, will mean that your competitors quite literally leapfrog over you and overtake.

Your competition will poach your best talent, book the best advertising spots, secure long term deals with customers, have in place the right organisational structure for growth and the confidence to quickly snap up any opportunity.

The result will be that in 2022 there will be new market leaders in the various sectors of the economy because some business failed to plan for the 2021 recovery and waited for all the risk and uncertainty to clear up!

In times of crisis, it is always very tempting to be pessimistic or fearful but this is what separates the men from the boys in business.

The best CEOs and Boards will smell recovery is round the corner and plan for the new post-COVID recovery.

This effectively means dynamic forecasts based on a recovery scenario, identification of possible opportunities, resources needed in 2021 to exploit opportunities as and when they become available and a healthy appetite for risk.

I think the vaccine is the game changer and believe that pent-up demand for tourism and travel will spark the economic recovery next year.

In fact, I note with relief that Deutsche Bank recently stated that ‘…it is likely that global GDP will return to its pre-virus levels in the second quarter of next year’. Deutsche Bank forecasts that in 2021 the US economy will grow 4%, the euro zone economy will rebound by 5.6% and China’s economy will gain 9.5%.

Therefore, let’s put the doom and gloom behind us now and start to plan for the 2021 recovery. The good times are just round the corner. Praise be to God.