RUTH SUNDERLAND: New Year is always a time for reflection but never more so than the strange, muted first days of 2021 – so what have we learned?
- Lives and businesses have changed in ways that would have been unimaginable at the start of 2020
- In business, Covid-19 has delivered a coup de grace to the weak, the debt-ridden, the hot air merchants and the greedy
- In a pandemic, well-run companies are also vulnerable – but firms with good governance, sensible debt and a solid business model stand more chance
Almost exactly a year ago, the World Health Organisation issued a warning that the Chinese authorities had alerted it to an outbreak of ‘pneumonia of unknown cause’ in Wuhan.
Forty-four cases had been reported, with 11 severely ill, all linked to the Huanan seafood market. The news, so ominous in hindsight, passed largely unremarked.
Around the same time, there were also reports on recent Ebola cases in the Democratic Republic of Congo, and a new MERSCoV case in Saudi Arabia, and it seemed like just another disease in faraway lands.
Strange days: Lives and businesses have changed in ways that would have been unimaginable at the start of 2020
On January 31, two Chinese tourists visiting York were Britain’s first publicised coronavirus victims. In the months that followed, lives and businesses have changed in ways that would have been unimaginable at the start of 2020.
New Year is always a time for reflection but never more so than the strange, muted first days of 2021. So what have we learned? Perhaps the most important lesson for business is the way Covid-19 has delivered a coup de grace to the weak, the debt-ridden, the hot air merchants and the greedy. A number of high-profile collapses, including Debenhams and Sir Philip Green’s Arcadia, were in trouble before the virus, which merely accelerated their demise.
In a pandemic, well-run companies are also vulnerable – but firms with good governance, sensible debt and a solid business model stand more chance of survival.
The second lesson is that so-called efficiency is over-rated, at least in the sense of adopting the cheapest and fastest possible methods of operating, with not a millimetre of slack.
George Stigler, a leading light at the Chicago School of Economics, famously observed that if you never miss a plane, you are wasting too much of your life at the airport. Just-in-time supply chains are an example of this philosophy in action.
But the pandemic – and Brexit – have taught us the value of running with a margin for error, just-in-case.
Thirdly, too much debt is dangerous. This ought to be obvious, but apparently isn’t. Businesses and individuals up to their necks in borrowing fall into trouble very quickly.
The country now has a millstone of more than £2trillion of debt, which is not an immediate problem but leaves us less firepower for the next crisis.
The fourth lesson is that the technology revolution is in its infancy and will transform our lives more than anything we have witnessed. Productivity could finally be turned around through smarter, tech-enabled ways of working. Robotics and artificial intelligence could revolutionise everything from food shopping to elder care.
Lesson five is that we can all achieve more at work and in life than we think possible.
However incompetent the Government is about the rollout of a vaccine, the fact that Pfizer and AstraZeneca produced their jabs in such a short time scale is phenomenal.
On a lesser level, supermarkets made sure the nation was fed. No-one needed to panic buy that toilet tissue, and could have stuck to a just-in-time purchasing strategy.
As individuals, many of us acquired new skills, including my mum, who learned to use Skype and Zoom to bridge the gap of separation from children, grandchildren and great-grandchildren.
As for me, I didn’t have time to re-read my A-level French set book, La Peste, as I intended. But to quote Camus: ‘What we learn in a plague is that there is more to admire in human beings than to despise.’ Happy New Year.