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Opening business activity is not the same as the recovery

by Mark P. McDonald  |  April 30, 2020  |  Comments Off on Opening business activity is not the same as the recovery

This Georgia, Texas and several other states opened for
business by relaxing public health restrictions on non-essential industries and
stay at home.  The move is both positive
and unfortunately a little political.  It
is a first step, but it is not a recovery, nor probably the real beginning of a
recovery.

In the strictest sense of the word, reopening entails a
measure of recovery.  As some economic
activity is better than no economic activity. 
However, to say that we are recovering is challenging when businesses
are opening under the following conditions:

An example was a barber in Atlanta I heard about on the U.S.
National News.  A haircut provides a good
example of the difference between being open and starting the recovery. The
barber is open but under the following conditions:

  • One client in his shop at a time, rather than
    four at a time
  • Using one apron on one client, then it needs to
    be laundered
  • Using one set of haircutting tools (scissors,
    clippers, comb, brush, etc.) per client, then each set needs to be sterilized individually.

The shop owner Is happy to be open, but he estimates that he
can only see 18 clients per day and his cost of operations from aprons and
sterilization is significantly higher.  If
he has four barber chairs, then he is running at 25% capacity with higher costs
of rewashing aprons and haircutting tools. He is still losing money as he is
open.  So yes open, recovering no.

Restaurants opening with only 50% of their seating available
provides another example.  It is great to
be open.  It’s a move toward recovery,
but it is not the recovery.

Relaxing public health restrictions to enable people to
return to work, stores to be open, etc. are all very positive moves.  They should be the payback we have all made
in social distancing, staying at home, etc. 
They should be proof to front line healthcare workers that their
sacrifices and efforts are not in vain.  That
we stayed home for a reason and that things should be getting better.

Opening the economy is a start. Recovery requires more than
just being open.  Savvy business leaders
recognize the momentum opening creates. 
They also recognize all of the remaining hard work required to drive through
a recovery.  Just being able to be one of
5 people in a Waffle House is not enough to turn people to their jobs, society
back to itself or recoup the value lost.

So be happy that we are making progress, that things are beginning
to open up.  Remain vigilant to protect
public health and limit the chances of returning to social distancing.  Keep working and innovating and serving
customers as those are the foundation of sustained recovery.

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Mark McDonald
VP Analyst
12 years at Gartner
33 years IT Industry

Mark McDonald, Ph.D., is a Vice President and Fellow Emeritus in Gartner for General Managers Program. Read Full Bio




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