Top Line - June 05, 2020

Social unrest is a periodic component of American life.  It requires catalysts to emerge and most often comes into view amidst uncertainty and disruption.  To date the COVID-19 pandemic has left over 100,000 Americans dead, and brought about a Depression-like economic slide.  With approximately one-in-four Americans unemployed, regional and economic divisions over mask and lockdown policies have become increasingly pronounced.   These factors are the seeds of unrest; polarized political and ideological environments, historic levels of unemployment, the uncertainty of a health crisis, and heightened social tensions combined to heap stress on a system ill prepared to handle such a confluence of factors.

Despite America’s flaws, securing life, liberty, and property for all remains a core component of the American dream.  When a once-in-a-century pandemic, rampant unemployment, and painful racial inequities collide, there is the risk that the social fabric of our domestic order will come apart.  Yet, amidst a backdrop of escalating violence, the nonviolent majority provides hope.  Against this environment of uncertainty, escalating police tactics and criminal elements combined to heighten tension.  America’s domestic order was once again revealed as frayed and failing through inexcusable acts of violence caught on tape.  Acts which, predictably, sparked protests; protests, which have escalated into looting and violence reminiscent of another era. 

Even so, uncertainty remains the prevailing factor.  Businesses pondering the challenges of reopening amidst an unstable consumer environment and the potential for further lockdowns if COVID-19 cases were to surge are now faced with uncertain security environments as protests accompanied by looting spread across the country.  Plotting a path forward requires consistent leadership regardless of the circumstances.  Business leaders have the opportunity to promote stability and advocate for change on the local, state and  national level.  As the COVID-19 pandemic and the economic toll continue, business leaders must think imaginatively about possible trajectories and plan for numerous contingencies.  Business strategies should recognize the potential for social and economic instability through 2020 and consider how best to operate through such turbulent times.   

Historically, America has survived and overcome war, pandemics, economic depression and social unrest.  Every crisis has a beginning, middle and end.  For business leaders, weathering the storm requires a clear vision for employee safety, security, and long-term value creation in the market each business serves. 

Question to Consider:

How can business leaders promote stability in communities facing uncertainty and violence? 

COVID-19: The HIGHLIGHTS

Gradually businesses are reopening across the U.S. are occurring against a backdrop of fear that large scale protests over the death of George Floyd will cause COVID-19 infection rates to spike.  Mayors and local officials have expressed concern about the effect of the two crises stacked upon each other and encouraged individuals participating in protests to get tested for COVID-19.  Additionally, as the medical field learns more about the spread of COVID-19, the dosage or rate of exposure is becoming a topic of note.  Wearing masks, maintaining social distance, washing your hands, and avoiding crowded spaces all contribute to lowering your rate of exposure and thus, decreasing your likelihood of coming down with the virus.  These insights go hand in hand with behavior across geographic regions.  Urban populations are disproportionately remaining at home, while people in less crowded areas are spending more time outdoors than before lockdowns took effect.

Beyond the noise

Shock Effect:  The U.S. has reached a crisis point reminiscent of 1968 as the COVID-19 pandemic, an economy in free fall, and systemic racial tensions collide.  Uncertainty surrounds all three variables, but each of these shocks is significant in its own right; together they have the potential to impart lasting change.  Additionally, the pervasive political polarization and institutional disfunction of 21st century America is not built to find consensus or stability.  While 1968 has long been viewed by many as the most traumatic year in American history, 2020 still has seven months remaining.  Additionally, the stabilizing political factors of 1968 are not present today, raising the prospect for continued social unrest and economic instability. 

Secure stability:  Prepare for continued political, social, and economic volatility.  Establish business continuity plans which account for continued social unrest in metropolitan areas.

Economic Slide:  Congressional Budget Office (CBO) projections indicate that it could take the U.S. economy most of a decade to recover from the economic disruptions of COVID-19.  The revisions reflect expectations of reduced consumer spending caused by business closures and social distancing.  Further exacerbating the economic toll, some retail stores have been forced to close or limit hours in response to protest induced vandalism and city curfews.  In some cities, protests are likely to delay plans to reopen stores that were closed due to pandemic lockdowns.

Secure Vision:  Prepare for an extended economic recovery with periods of uncertainty.  Consider the possibility of various economic trajectories and plan for multiple contingencies.

TRUSTED RESOURCES: for numbers & guidance

Johns Hopkins University – Coronavirus Resource Center

World Health Organization – COVID-19 Pandemic

Center for Disease Control – Coronavirus (COVID-19)