Page 12 - MS Year in Review 2020

Assessing the Current Situation and Initial Response

Many countries are just introducing the first measures to respond to the COVID-19

thread. Most measures contain social isolation, closing of businesses, home office
for employees, drastic hygiene and security measures. In this situations many

entrepreneurs, owners of start-up, scale-ups and small and medium sized
enterprises, (a term largely used in Europe) are probably struggling at this moment
with figuring out measures for continuing operations; restructuring work to adhere

to the home-office recommendations and health safety requirements issued by
governments; projecting immediate cash flow challenges, due to drop in demands.

In terms of personal reaction to the changing situations, probably most of the

people are still caught up between denial, fear and anger as the natural first
phases, we humans go through when change happens.

Nevertheless, the difficult ‘here and now’ situation for many businesses and their
owners, this sudden and dramatic change in the business environment, provoked

by the COVID-19 crisis calls for the need of response. What we have certainly
learned from previous crises is that some companies lose dramatically, others win

dramatically, but definitely the most adaptable are the ones destined to survive.

So far, what we see from businesses are the three classic defense strategies to
threat or stress stimuli: “fight, flight or freeze.” Some businesses already respond

with freezing activities, projects and plans; others employ the fight reaction and
answer with new products and more active and aggressive marketing, third are
closing down and redirecting their capital or diversify, which we can call a “fly”

strategy.

The correct immediate responses of businesses depend on the industry, how
prepared are the businesses to diversify delivery, what are their financial reserves,
to what support measures they will have access from their local governments. No

general principle recommendations can be given for the immediate actions
businesses should take.

It is not the same with what happens after this, let’s call it “lock down” of economy

ends. The period of recovery, regardless of the timing and form, will present a great

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