Who would have predicted the events of 2020? Seth Yakatan offers a real-world perspective about contingency planning.
While few people could have anticipated the disruption that COVID-19 caused, the risk of an economic shutdown in response to a pandemic is not new. After the H1N1 pandemic in 2009, business leaders shared what they had learned about contingency planning. Fred Palensky, Ph.D., Chief Technology Officer with the 3M Company, was quoted by CIDRAP News as saying, “The single most important thing that we learned is that government trumps everything.” At the time, 3M had contingency plans in case a flu epidemic or other crisis disrupted their business. But once the government’s response mandated school closures and prevented people from going to work, it didn’t matter. Given how events unfolded, Palensky continued, the key is flexibility and the ability to adapt to changing circumstances. Business owners and leaders who are rethinking their contingency plans should bear this in mind—especially as we head into a contentious election on the heel of COVID-19 and social unrest.
In situations where unforeseen or unpredictable events bring on uncertainty, some businesses can adapt while others shutter. The common characteristic of sustainable companies seems to be those who have someone involved who will figure it out.
Two Guns Espresso, a café shop in El Segundo Beach, responded to the COVID-19 shutdown within two days by placing an ad for pickup, which proved to be very popular. Pivoting to a takeout-only model—where customers could order through an app, then pick up their coffee—enabled the business to continue. Likewise, The Cultured Slice cheese shop in Hermosa Beach updated their hours, takeout and delivery options. In contrast, another shop along the Pacific Coast Highway shut its doors for four months. They didn't know what to do.
Considering the level of dislocation that occurred during 2020, it may not be possible to figure everything out. But every contingency plan should include having access to the right people or advisers who can figure things out when the unexpected occurs.
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Seth Yakatan
Known for solutions that yield results, Seth Yakatan has completed or advised on acquisitions and corporate finance transactions totaling over $3 billion. He is CEO of Katan Associates International—a financial strategy and merchant banking firm specializing in commercialization and asset monetization—especially for the life-science and eCommerce sectors.