A 3-part series addressing the current challenges with the Coronavirus, COVID-19 and how it is creating a Strategy Crisis with organizations throughout the world. This will reflect on personal history and the current concept of our fears, facts and hope for the future and how we can drive strategy to become stronger than before.
Part I – Fears – A Clear and Present Danger
The pain in the right-hand side of my stomach was becoming a problem. No matter how many antacid pills, the reality was clear – we were running out of cash and the stress and acids were literally burning my gut. As a controller for a publicly traded software company with over 400 employees, I finally had to share my fears and concerns with the CFO. The saavy and experienced executive listened patiently how I described the potential risks and I did not know how were going to get out of it. I hoped he was going to share with me a specific way on how we were going to collect enough cash before year-end. Instead, he told me a story of how he was with a larger company that was down to its last two weeks of cash and they recovered, profited and it all worked out.
Initially, I did not see this coming. In 2000, we raised nearly $50 million from an IPO and one of my many tasks was to manage the cash. Generally, this was selling Auction Rate Securities to fund one of our many strategies. The goal was to grow and win the market. We hired people to grow and spent money. We expanded international to grow and spent money. We built a world-class data center to grown and spent money. We needed a state-of-the-art espresso maker for our London office and spent money. The only successful strategy that I saw was spending more money that we had.
The CFO confidently told me, “Carl, everything is going to be ok.”
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On March 9th, 2020, the Dow Jones Industrials had lost 19% from its all-time high just 3 weeks ago. Global stock markets have lost $6 trillion in value over the past six days. Oil prices have dropped to some its lowest levels since 2001.
Initially, I did not see this coming. On February 12th, the Dow Jones had reached 29,569. Overall, many companies had reported solid earnings and had positive expectations going forward. The China supply chain issues were occurring, but it was unclear how bad it would be for the US. Most of the conversation was what will happen to the stock market depending on who wins the election…
Then, I had a conversation with one of my favorite car attendants at the Portland airport. She asked me, “Did I invest in the stock market?” On paper, she had a $1,200 profit from Tesla in the past week and her ‘friend’ had just made $10,000 over the past year. Immediately after the conversation, I called my financial advisor and recommended selling the market.
After the current losses, my financial advisor confirmed and said, “Carl everything is going to be ok.”
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All of this has been sparked by the global panic by the COVID-19, aka, the Coronavirus. Today, current estimates that the Coronavirus has reached 116 countries and territories including the Diamond Princess. As of this writing and according to John Hopkins University Hospital, 113,773 cases have been confirmed and 4,008 deaths.
Initially, I should have seen this coming. We had heard about this Coronavirus in Wuhan, China at the end of December 2019. The US Center for Disease Control and Prevention identified the seafood market in Wuhan as the source for the virus. However, China appeared to be very aggressive early on to stop the spread of the virus. China shut down the seafood market, travel and put many in lockdown in the province of 11 million people. At first, the virus appeared to be like others such as SARS or MERS and it would be contained…
In early January, my mom had raised concerns regarding the virus. I had confidently shared that, “Everything is going to be ok, mom.”
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On January 20th, the Diamond Princess debarked for a two-week journey to China, Vietnam, Thailand and a return to Japan. The 2,666 guests and 1,045 crew members were prepared to have an incredible journey on a lavish cruise line.
Initially, they did not see this coming. On January 25th, a guest who left in Hong Kong tests positively for the Coronavirus on February 1st. On February 4th, they canceled the cruise to start inspections. The ship was put on quarantine. On day 1 of quarantine, there are 10 cases. Day 10, 218 cases. Day 23, 705 cases.
If I knew someone I loved on that boat, it would be easy to ask, “Everything is going to be okay, right?”
…
Next Part II – Facing the Facts
Sources:
Johns Hopkins University https://coronavirus.jhu.edu/
WorldOMeter https://www.worldometers.info/coronavirus/#countries
USA Today https://www.usatoday.com/story/money/2020/03/09/dow-oil-tumbles-global-recession-fears/4998613002/
Macrotrends.Net https://www.macrotrends.net/1369/crude-oil-price-history-chart
Pharmaceutical-Technology.com https://www.pharmaceutical-technology.com/news/coronavirus-a-timeline-of-how-the-deadly-outbreak-evolved/
