As I look at the world with the coronavirus, I am trying to identify second and third-order effects that will affect my members and myself. Also, I am trying to figure out what the new world will look like post coronavirus because as with all major events, behaviors change permanently.
March 14th, 2020
At the moment; however, it is too early for such predictions, but here are a few I will make.
Coming Baby Boom!
With the sports season canceled and quarantines, we can expect a baby boom in 2021! The size of which I believe will correlate to the length of the quarantine.
Increase in Divorce Rates
As couples have to spend more time together, trying to work and manage children without outside distractions and escapes, more people will realize that they really can’t live with their spouse, I would expect a rise in divorce rates, especially among the very wealthy who rarely spend time together anyway.
The growth in streaming subscriptions has been growing dramatically with more platforms, i.e. Disney and Apple TV coming online. However, with quarantine and no sports, I expect the numbers to grow even further, leading to more people cutting the cord as they will not want to pay for TV. The question is: Will Google Fiber and AT&T Fiber start actively selling and expanding their networks to cope with residential demand with more people working from home? If streaming really takes off, this will be the final nail in the coffin of movie theaters.
Coronavirus will devastate Africa and possibly India
Cities like Mumbai, Lagos, and Nairobi are huge clusters of humanity with large populations located in slums. Once Covid-19 infects the population it will spread dramatically in these cities. Since many residents cannot social distance as the slums don’t allow for it the ability to limit the disease will be minimal. As it spreads, their healthcare systems will collapse as they are definitely not able to handle the volume. India may be able to cope, but not as well as China. African cities cannot. Since a large portion of Africa’s middle-aged population died due to the AIDs epidemic, this threatens the old. Africa will be left with a young population and few elders.
Pray for a light Hurricane Season
This is not a prediction, but for decades, utility companies in hurricane-prone states have decided it was cheaper to patch up their above-ground wiring networks, rather than incur the cost of burying power lines, etc. As I understand it, the median age of a line worker was 45 five years ago. At that time according to EUCI, over one-half (50%) of utility workers will be eligible to retire between 2020 and 2022. As the work is hard, this group could be susceptible to the virus and if many are sick, there may not be enough to fix a hurricane disaster. In that case, power lines may eventually relocate underground in the south.
Copyright (c) 2020, Marc A. Borrelli
Defining an organization’s culture as a “Family” culture reflects tolerance to subpar performance. Rather focus on those characteristics of a “family” culture that you want.
Knowing the profit of your core customers is key to building a growth model. Many companies have identified core customers that are generating a sub-optimal profit and so they cannot realize the profits they seek. Identifying the correct core customer allows you to generate profits and often operate in “Blue Ocean.”
The European Super League collapsed within days of launch due to hubris and the founder forgetting the key parts of their business model, value creation, sales, and value delivery. The collapse might bring a high price.
Many business owners want to sell at the top of the market. However, market timing is tough. Is this the best strategy? Probably not.
Working with many companies looking to grow, I am always surprised how many have not built a financial model that drives growth. I have mentioned before a financial model that drives growth? Here I am basing on Jim Collin's Profit/X, which he laid out in Good to...
As we emerge from COVID, the current employment environment makes me think of a surfing concept: “Being Caught Inside When a Big Set Comes Through.” Basically, the phrase refers to when you paddle like crazy to escape the crash of one wave, only to find that the next wave in the set is even bigger—and you’re exhausted. 2020 was the first wave, leaving us tired and low. But looking forward, there are major challenges looming on the horizon as business picks up in 2021. You are already asking a lot of your employees, who are working flat out and dealing with stress until you are able to hire more. But everyone is looking for employees right now, and hiring and retention for your organization is growing more difficult.
“Why don’t they use common sense?!” You may have said this phrase yourself, or heard it with your managers, when discussing an employee’s actions. However, the frustrated appeal to “common sense” doesn’t actually make any meaningful change in your organization. We all make decisions based on the information we have and the guides we have to use. So if the wrong decisions are being made in your organization, it’s time to examine the tools you give decision-makers.
You can only determine profitability when you know your costs. I’ve discussed before that you should price according to value, not hours. However, you still need to know your costs to understand the minimum pricing and how it is performing. Do you consider each jobs’ profitability when you price new jobs? Do you know what you should be charging to ensure you hit your profit targets? These discussions about a company’s profitability, and what measure drives profit, are critical for your organization.
If you were starting your business today, what would you do differently? This thought-provoking question is a valuable exercise, especially when it brings up the idea of “sunk costs” and how they limit us. A sunk cost is a payment or investment that has already been made. Since it is unrecoverable no matter what, a sunk cost shouldn’t be factored into any future decisions. However, we’re all familiar with the sunk cost fallacy: behavior driven by a past expenditure that isn’t recoupable, regardless of future actions.
Bringing clarity to your organization is a common theme on The Disruption! blog. Defining your business model is a worthwhile exercise for any leadership team. But how do you even begin to bring clarity into your operations? If you’re looking for a place to start, Josh Kaufman’s “Five Parts of Every Business” offers an excellent framework. Kaufman defines five parts of every business model that all flow into the next, breaking it down into Value Creation, Marketing, Sales, Value Delivery, and Finance.