Fight or flight?

Granted the Government has stepped in to help keep ‘most’ people in employment but the truth is that many businesses have had to take some tough decisions


By Kevin-James Fenech 

Kevin is the founder and owner of JOB Search - and FENCI Consulting

The pandemic has put a lot of pressure on business leaders. Public health restrictions have either closed businesses down or seriously curtailed consumer demand. The result has been pressure on jobs.

Granted the Government has stepped in to help keep ‘most’ people in employment but the truth is that many businesses have had to take some tough decisions. It also means that investment decisions have been postponed (in some cases cancelled) and the opportunity cost of lost growth will mean it probably will take a minimum of 3 years to regain our 2019 momentum.

We have had business leaders who throughout this pandemic have remained calm under pressure and opted to fight the situation and constantly tried to adapt whilst other less able leaders, fled from the problem and let a bad situation destroy market share, employee morale and their company’s financial position. The consequences of which will be felt in the recovery phase and beyond.

I’ve said it before and I’ll say it again: This pandemic will be a huge opportunity for some and the death of others! We will in the post-pandemic world have new market leaders in most industries and there will be a lot of leap frogging of fitter and stronger business over old, anaemic and/or complacent businesses.

The ‘fight or flight’ response captures or symbolises, what businesses are going through right now. I think Q1 2021 will be horrible for businesses but post-Easter, the recovery will kick-in and I am convinced that we will have a good summer and end the year very strong.

Therefore, my advice to business people, is to remain calm and focused. To fight and not flee! Use this time to become lean but not too lean, to update business models and strategically position your business to be first out of the gate come the recovery.

Right now, there is nothing wrong in borrowing money or to cash burning through your reserves to survive. It is a necessary evil but because the vaccine is now a reality we are now seeing the light at the end of the tunnel. This leads most economists to forecast a strong recovery in the post-pandemic world and this is why I am suggesting holding tight right now and getting ready for a positive change in market conditions which will see ‘normality’ restored.

One news item which seems to have been missed by the local press and media is that medical research points to the vaccine not only protecting the recipient but also all people he/she comes into contact with since the vaccine creates such a strong immune response that it even stops people spreading the virus. This to my mind is a new and added bonus which increases the likelihood of ‘normality’ being restored quicker than originally anticipated. Until now, scientists didn’t know whether vaccines would stop transmission and were banking only on it preventing severe illness and death.

The COVID-19 pandemic is the third major post-cold war asymmetric shock to the capitalist system after 9/11 and the 2008 financial collapse and after each of these events followed a big rebound and growth phase which I am sure we can bank on from Q3 2021 onwards. I predict the return of confidence will release consumer pent-up demand and therefore a consumer rebound led strong recovery.

It is precisely for this reason that I implore business leaders not to lose their nerve and stay the course; to fight and not flee; since we will soon all reset for growth post-pandemic.

Get ready for revenge shopping ! Shopping for anything which allows people to enjoy their reclaimed freedoms post-pandemic and this is why I think holidaying in the Mediterranean will be a big beneficiary of this recovery.

Naturally, the Maltese economy will benefit greatly from this and a strong summer will kick start our next economic boom.

Admittedly, Q1 2021, will be tough; nervy; and scary. In fact, right now is the most likely time for businesses to go under or to shed their workers in droves. Yet the good times are just round the corner and it really is worth withstanding this pandemic just a few more months.

Fight or flight? I say fight to remain in the game come the recovery.

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