By Edward Segal
August 9, 2021
The list of major companies and organizations affected by the Covid pandemic
and recently discovered delta variant continues to grow, as do the lessons
business leaders can learn on how to respond to the crisis.
According to Bloomberg.com, ‘’Some events, like the New York International
Auto Show, are being canceled due to virus concerns. Companies including
Alphabet Inc.’s Google, Amazon.com Inc. and BlackRock Inc. have all
recently pushed back plans to return to the office as well.’’ And Apple
has delayed plans to open its first brick-and-mortar store in India this year
because of Covid’s impact on that country.
Laurence Ales, associate professor of economics at Carnegie Mellon
University’s Tepper School of Business, observed that, “The pandemic has
presented businesses with multiple headwinds hindering growth and
expansion opportunities. First and foremost is the increased level of
uncertainty. This is not only a pure economic uncertainty but is also
entangled with the uncertainty on the evolution of the pandemic and of the
vaccination effort in the U.S. and abroad. In addition, consumers have reacted
to this pandemic-induced recession differently than previous recession[s].
“The consumption basket has changed, sometimes in expected ways (decline
in travel and hospitality) sometimes in less expected ways (the boom in home
furnishings). Finally, firms have to also confront headwinds in terms of their
inputs when considering expansions,” he noted.
Ales said, “These obstacles have been not only in the form of limited access to
intermediate and capital goods (supply chain disruptions) but also limited in
the access to workers. This last labor component is driven by multiple forces
ranging from fear of working in public, to lack of childcare
to disincentive[s] provided by various forms of fiscal expansions.”
Business leaders continue to do the best they can in responding to the many
challenges and consequences of the 18-month-old crisis.
Lucinda Wright, CEO and co-founder of Cask & Kettle, said “The impact of the
current surge in Covid on our business has been very direct. The president of
our distillery informed me yesterday that they must shut down for up to a
week because of an outbreak at the facility.
“Additionally, while ordering ingredients for our next big production we have
been told that the lead time for several critical components will take twice as
long (or more) to be delivered, which jeopardizes the substantial new
distribution we worked hard to secure,” she said.
According to Wright, “This evolving situation puts our young company in a
cash flow crunch as well as in danger of losing business that is essential to our
survival and growth. Based on decades of manufacturing and supply chain
experience, we know that ‘top-to-top’ collaboration with critical suppliers is
key to developing creative, out-of-the-norm, solutions to solve these
extraordinary challenges. No company can successfully navigate these
turbulent waters on their own without help from their ecosystem.”
Daniel Rutberg is the co-founder and chief operations manager of digital
marketing agency MuteSix. He observed that, “This pandemic has created a
number of challenges, but the most apparent ones in the business realm have
been the disruptions in plans, expansions, and strategies. Many of these
obstacles were spurred by budget cuts, but others had to do with acclimating
to the completely new environment seemingly created overnight.
“For example, marketing strategies geared toward friends and families
enjoying themselves at group gatherings were suddenly a no-go, so marketers
struggled to find compelling ways to promote products and services that
weren’t exactly useful during a global lockdown. In short, company leaders
had to dig deeper and pivot faster than ever before,” he said.
Rutberg noted that, “Those who were most successful adapted quickly and
went on to take the necessary measures to get their team onboard. Sadly,
those who settled for a ‘let’s wait and see approach’ didn’t experience many
Closing A Store
Will Cutler is the co-owner of 23 Subway franchises in South Carolina. He told
me that they had to shutter one of their stores because of slow sales and the
lack of help. At other locations, operating hours were shortened, stores were
closed on some days and remodeling was postponed.
“We are having difficulty getting products from suppliers for our
restaurants…. having trouble finding parts to fix items in our locations [and]
have increased wages several times and offset them with increases in pricing.
[We also] offered bonuses to get people to come on board and stay on board,”
Expansion On Hold
Danielle Ferrari, owner and founder of Valhalla Resale, recalled, “We had
plans to expand Valhalla to our second retail location in 2020. Plans for
expansion had already begun before the country started shutting down to help
slow the spread of Covid-19. Luckily, we were in the very initial stages
of expansion, so the impact was minimal. We planned on using an equity
crowd sourcing platform to sell shares to raise the funds for expansion.
“I hope that one day we can bring Valhalla to every major city. While
expansion is still in the [works], those plans remain in the future as Covid-19
lingers. I’m not sure when we’ll be able to put expansion plans back into
motion,” she said.
Advice For Business Leaders
Investment banker James Cassel, chairman and co-founder of Cassel Salpeter
& Co. said, “The biggest concern that I see is what will really transpire long-
term. Is this a new way of working or will things slowly go back to the way it
“Being flexible will become very important. Companies will be required to
make a major decision when their leases come up for renewal. Companies also
need to expend more money in technology especially relating to security when
their workers are working remotely,” he advised.
“Keep in mind many businesses don’t have this option. They need their people
to be on site. Be it a retailer, a restaurant or other kind of service organization,
you can’t do this remotely,” Cassel counseled.
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