Author Archives: C. DAY

Survive COVID’s Next Phase.

For small businesses that have survived the coronavirus so far, what’s next? Karen Mills outlines steps that business owners and government should take immediately.

America small-business owners moved quickly when COVID-19 started shuttering shops in March. Fine dining restaurants shifted to takeout. Book shops introduced curbside pickup. Gyms offered classes online.

Business owners, it seemed, just needed to face this once-in-a-lifetime calamity and get through a few months, when normalcy would resume. The Paycheck Protection Program (PPP)—government-funded forgivable loans designed to help businesses pay their employees—would help them weather the storm.

Six months later, there’s still no end in sight to the pandemic and no easy answers for small-business owners trying to survive. Strict safety protocols haven’t been enough to get customers through the door for some small businesses, and many owners—crushed by inventory and overhead costs—are grappling with hard choices.

“This is the worst small-business crisis of my lifetime, and I’ve seen a number of tough moments,” says Karen G. Mills, senior fellow at Harvard Business School. “I’m quite concerned that we haven’t even seen the tip of the iceberg of business closures.”

Yelp, the online review website, estimates that almost 73,000 small businesses in the United States had closed permanently as of July 10. And almost half of owners surveyed in late June by the online business network Alignable said they lacked enough cash to get through one month and were taking in less than 50 percent of their pre-pandemic sales.


“We’re finding that you can’t save businesses by just allowing them to reopen,” Mills says. “Until it’s safe, their employees don’t want to come back. Their customers don’t want to come back. There’s no one out shopping on Main Street.”

The situation appears bleak, but owners still have options, says Mills, who led the US Small Business Administration from 2009 to 2013 and was an Obama cabinet member. Getting through the coming months will require extreme ingenuity and shrewdness from business owners, and additional waves of aid from the federal government.

Three moves small-business owners can take now

Mills offers three recommendations to cash-strapped business owners:

Focus on social media and email to reach customers. The coronavirus pandemic forced many analog companies to embrace digital technology, such as contactless payment tools and online booking software. During the last week of August, about 25 percent of respondents to the US Census Bureau’s Small Business Pulse Survey said they were increasingly using online platforms to promote goods and services.

However, businesses don’t need a comprehensive digital strategy—or even a website—to succeed online. An Alignable survey found that 25 percent of respondents were turning to social media to reach customers while 18 percent were engaging them through email.

The key is to harness the most effective outlet for a firm’s products and services, Mills says, citing the experience of milliner Linda Pagan, owner of The Hat Shop in New York.

“She decided to create these crazy videos and put them on Instagram, and they’ve taken off,” Mills says. “She still takes customer orders over the phone, but now she has a few more sales per day and says that’s enough to make it through.”

Scrutinize every cost. Every dollar matters now. Companies hanging by a thread should try to renegotiate contracts with suppliers and landlords, and refinance debt. Is there a new supplier for a key item the company uses? Would opening only during high-traffic hours reduce electricity bills?

Perhaps for the first time, small-business owners accustomed to monthly accounting might need to track day-to-day spending so they can react quickly to changing economic conditions. Free and low-cost tools from banks and fintech firms can synthesize financial performance on real-time dashboards, making monitoring less onerous.

“Small-business owners tend to focus on their customers, and on their products and services,” Mills says. “They often don’t have time for the accounting and paperwork. But knowing your cash situation is mission critical in tight times like this.”

Concentrate on the best profit opportunities. Small-business owners must identify their most valuable products and services and eliminate everything else. If a restaurant’s tried-and-true burger has a stronger gross profit margin than its artisan cheese platter, it’s time to dump the cheese, at least for now.

It’s equally important for firms to understand their most loyal and profitable customers—who they are, what they buy, and how to engage them. Beyond their purchasing power, loyal customers can become a company’s best advocates, providing powerful word-of-mouth advertising that’s authentic and free.

Innovation like this has been paying off. Sixty-four percent of small-business owners say they can continue operating under current conditions for more than a year, up from 34 percent three months ago, according to a CNBC/SurveyMonkey survey of small-business owners.

For government: Aid that’s easier to access

The US government also needs to do its part and extend aid efforts, Mills says. The Paycheck Protection Program allocated $659 billion in forgivable loans to small businesses that agreed to retain employees and maintain salaries. Almost 73 percent of respondents to the Census Bureau’s weekly Pulse Survey said they had received PPP assistance as of August 29. The program, which expired on August 8, increased a participating business’s self-reported survival odds by 14 to 30 percentage points and likely reduced the number of firms that permanently closed, according to a new HBS study.


While the loans helped many businesses get through temporary shutdowns, critics argued that aid tended to go to wealthier, connected applicants and, in some cases, to publicly traded companies. Despite these problems, Mills considers the program a step in the right direction during an unprecedented crisis.

“PPP was designed to bridge small businesses for eight weeks,” says Mills, who has been advising congressional and business leaders about aid strategies. “No one could have predicted how long this would go on.”

Mills recommends that the US government replenish and restart the Paycheck Protection Program, but find additional ways to support the smallest, most vulnerable businesses, many of which tend to be women- and minority-owned. Alignable’s June survey suggested that PPP applications from minority-owned businesses were twice as likely to be rejected. Mills says that future loans should be simpler, easier to access, and provide more flexible terms to encourage participation.

Before the COVID-19 pandemic, small businesses provided almost half of the country’s private sector jobs and accounted for 44 percent of US gross domestic product. While policymakers are starting to appreciate the economic might of small business, these firms collectively lack the lobbying firepower of large industries at a time when they need aid most, Mills says.

“This is a critical moment for small businesses,” she says. “If we lose too many, it will create a long drag on the ability of the economy to recover. We must move now to provide all the support that we can, from congressional action to just remembering to ‘shop small.’”

Courtesy of the Harvard Business School – Author Danielle Kost is senior editor of  HBR’s Working Knowledge; Karen Mills is a HBR Senior Fellow. 

How to Be an Entrepreneur With Staying Power

Entrepreneurs are built for uncertain times.

Being an entrepreneur, a successful one at least, isn’t a one-idea, one-person, one-time kind of pursuit. However, sometimes– especially in uncertain times— even the best forget that they don’t have to try to figure things out and fix it all alone.

In interviews with more than 200 successful entrepreneurs for my first book, A Deliberate Pause: Entrepreneurship and its Moment in Human Progress, five elements stood out to me about successful entrepreneurs and what made them change catalysts. Think of these traits as a health check for your own entrepreneurship in these uncertain times.

Pattern Recognition

The day-to-day tasks of scaling a venture, or defending ground gained, can cause even the best entrepreneurs to inadvertently put their head in the sand and miss the larger patterns emerging. Yet importantly, those patterns can reveal threats on the horizon, or new ideas for growth. It’s precisely why stepping back and looking for patterns must be a dedicated habit– and not just for the entrepreneur.

Being an entrepreneur is hard and all-consuming. That’s why one of the very best ways to make pattern recognition the competitive advantage it should be is to make it a cultural practice across your entire team. This can be tough, at least at first, for many entrepreneurs. Besides empowering others to come up with the ideas, it also invites recognition of the bad along with the good. But in total, the practice of looking for patterns is among the easiest and most important skills a successful team can nurture.

Taking Action

Seeing what’s possible isn’t enough; you have to act. In uncertain times, we do a lot of talking and a lot of worrying. What is the best action to take? What promises the best outcome with the lowest risk? Such questions aren’t irrelevant, just less relevant than we tend to treat them when times are ambiguous.

Taking action matters more, and it’s the entrepreneur who enables (or precludes) that, in themselves, but also in others. Are you acting as a catalyst in this way? Evaluate the ways you incentivize your team to take action. We’re talking about novel action here, not just following orders. Of course you want any act to have a premise and a plan behind it, but inevitably it’s taking the action that matters most.

Activating Others

It’s embedded in the first two points above, but let’s be more explicit: as the entrepreneur, as a catalyst, your most important job is to motivate and move others forward to be leaders in their own right. In other words, going it together doesn’t just mean being surrounded by a bunch of followers.

Activating others is about giving others the room, incentive, and power to actually lead–with their own ideas, drawn from the patterns they see, and through their own, often independent actions. It takes the many, not the heroic few, to navigate ambiguous waters and deliver entrepreneurial success repeatedly.

Value Creation and Transfer

No matter what your industry or pursuit, you must create value. The best entrepreneurs know that to achieve that goal continually, they can’t create value once nor keep the benefits mostly to themselves. They have to transfer both the value and the ability to create it to the many.

Transferring value begins with activating your entire organization to conceive and pursue it. But it doesn’t stop with your organization. The value you create has to align with what the audience you make it for actually wants. That match between value and need changes constantly in uncertain times. Even in normal times, it’s far too easy to get lost in your own ideas and fail to match them to what others value and need.

Check in with how you’re doing on this front. Because when you give people something they truly value, they not only want it, but they defend it, build on it to create new forms of value, and in the process, solidify your value to them.


Uncertain times undo the best of plans. Yet entrepreneurial ventures need to be able to perform no matter how much things keep changing. That’s only possible if you know what drives you– not just in the business plan sense, or simply out of a sense of duty to partners or shareholders, but in the deeper sense of the shared purpose you and your team pursue each day. As the entrepreneur, you don’t just catalyze this from the start, you have the unique ability to keep it front and center and to make its meaning clear.

What really drives you? If you can’t answer that, consistently and across an entire culture, it’s not just hard to inspire anything worthwhile, it raises the odds that uncertainty will define you, rather than you harnessing it to create the value you seek. See patterns, take action, create value, but be sure to tie it to shared purpose. It’s the thing that catalyzes all the rest.

Courtesy Inc. Magazine, By Larry Robertson

Innovation advisor

Vulnerable US Jobs by Demographic Group

Unemployment claims offer only a partial picture of workforce dislocations resulting from COVID-19. Our analysis shows that more than twice as many workers are vulnerable to reduced hours, pay cuts, and temporary unpaid leave that are not captured in unemployment numbers. For more, please read the McKinsey Global Institute article “COVID-19 and jobs: Monitoring the US impact on people and places.”

  • Low-income workers are disproportionately vulnerable, but the effects are spreading to higher income brackets
  • Minorities are more likely to hold vulnerable jobs, especially in large cities
  • Women have sustained a majority of the initial job losses, but that may change going forward
  • Younger workers are 35 percent more likely to hold a vulnerable job


Future of Learning, Sugata Mitra.

Almost twenty years of experiments with children’s education takes us through a series of startling results – children can self organize their own learning, they can achieve educational objectives on their own, can read by themselves. Finally, the most startling of them all: Groups of children with access to the Internet can learn anything by themselves. The mechanism of this kind of learning seems similar to the appearance of spontaneous order, or ‘emergent phenomena’ in chaotic systems. From the slums of India, to the villages of India and Cambodia, to poor schools in Chile, Argentina, Uruguay, the USA and Italy, to the schools of Gateshead and the rich international schools of Washington and Hong Kong, Sugata’s experimental results show a strange new future for learning. Using the 2013 TED Prize, he has built seven ‘Schools in the Cloud’, where Self Organised Learning Environments (SOLEs) and a ‘Granny Cloud’ of mediators over the Internet, interact with unsupervised children. Sugata will present the main findings. We begin to see some glimpses of what schools should be for and what curricular, pedagogic and assessment changes will be required in the future. In this talk, Sugata will discuss what steps existing schools can take in order to prepare themselves for the changes that are, inevitably, going to come. Follow Sugata on @sugatam Sugata Mitra is Newcastle University’s Professor and Principal Investigator of Educational Technology, and world-wide known expert of self-organising systems. A physicist by training, he has worked on Organic Semiconductors, Energy Storage Systems, Bots, Remote Presence, complex dynamical systems. Since 1999, the focus of his research has been on primary learning and the Internet. Sugata has achieved international acclaims for his successful ‘Hole in the Wall’, ‘Self Organised Learning Environments’ (SOLEs) and ‘School in the Cloud’ experiments on unsupervised learning amongst groups of children. He is a recipient of many awards, among them the million-dollar TED Prize in 2013, and has spoken extensively about ‘Minimally invasive education’ all over the world. This talk was given at a TEDx event using the TED conference format but independently organized by a local community.


Hacking for Defense.

How Lean Educators and Battlefield Lessons Are Solving Big Problems

Silicon Valley has given modern life many improvements, search engines, social connection, smart phones, online shopping, health monitoring, ride shares and more.  It’s changed daily life.  Can you imagine getting along without a smartphone, which are only fourteen years old?

One less known but powerful outgrowth from “the Valley” is the way problem solutions and creative innovation are changing the world in subtle ways. Lean Launch Pad is expanding to other applications thanks to dot-comers who paused and looked back over their experience.  Fifteen years ago one digital founder, Steve Blank, documented his final startup business writing a book about the process called the ‘Four Steps to the Ephiphany’.  In it he described a customer development process and, in so doing, began the phenomenon of lean, evidenced-based planning.

What Stockdale Paradox Tells Us About Crisis Leadership (HBS)


Management issues in the time of COVID-19

“You must never confuse faith that you will prevail in the end—which you can never afford to lose—with the discipline to confront the most brutal facts of your current reality, whatever they might be.” — Admiral James Stockdale.

In August, while most developed nations’ rates of COVID-19 infections are falling, the rate in the United States continues to rise. States that had reopened or begun to, such as California and Texas, have reversed course, and the European Union did not list the United States as one of the 15 “safe countries” whose citizens may enter freely. Meanwhile, many leaders are reporting that their teams—or they themselves—have crashed into a wall of demotivation and despair.

The Stockdale Paradox, made famous in Jim Collins’s bestselling book From Good to Great,and the related discipline of survival psychology shine a light on the present moment and contains wisdom for how leaders can manage the unrolling crisis.


To review the origins of this project, we asked 600 global CEOs across a variety of industries what concerns were keeping them awake at night. Their topics ranged widely, but a handful of overarching mental tasks emerged: Comprehend complex, rapidly changing circumstances accurately, and respond to those circumstances keeping both immediate and long-term goals in mind.

One respondent summed up the challenge in a particularly apt way: “Shifting existing organizational structures from ‘peacetime’ value creation to ‘wartime/survival’ in a very short period of time … As CEOs in this crisis, we have no option but to become the wartime CEO, however ill-equipped or prepared we are.”

What is the Stockdale Paradox?

Stockdale was a prisoner of war in Vietnam for seven-and-a-half years. Before meeting with the legendary soldier and statesman, Collins read Stockdale’s memoir and found its grim details hard to bear, despite his knowledge that Stockdale’s later life was happy. Collins wondered, “If it feels depressing for me, how on earth did he survive when he was actually there and did not know the end of the story?” (Emphasis in the original.)

When he posed that question to the admiral, Stockdale answered: “I never lost faith in the end of the story. I never doubted not only that I would get out, but also that I would prevail in the end and turn the experience into the defining event of my life, which, in retrospect, I would not trade.”

Collins asked him about the personal characteristics of prisoners who did not make it out of the camps. “The optimists,” he replied. “Oh, they were the ones who said, ‘We’re going to be out by Christmas.’ And Christmas would come, and Christmas would go. Then they’d say, ‘We’re going to be out by Easter.’ And Easter would come, and Easter would go. And then Thanksgiving, and then it would be Christmas again. And they died of a broken heart … This is a very important lesson. You must never confuse faith that you will prevail in the end—which you can never afford to lose—with the discipline to confront the most brutal facts of your current reality, whatever they might be.”

This formulation became known as the Stockdale Paradox. The admiral elaborated further on the concept when, at a West Point graduation, he was asked if he dwelt on the end of his imprisonment to sustain him, or if he lived day to day?

“I lived on a day-to-day basis. … [M]ost guys thought it was really better for everybody to be an optimist. I wasn’t naturally that way; I knew too much about the politics of Asia when I got shot down. I think there was a lot of damage done by optimists; other writers from other wars share that opinion. The problem is, some people believe what professional optimists are passing out and come unglued when their predictions don’t work out.”

How does it apply? (or, Why there is no “normal” to come back to)

Your state, industry, organization—or unconscious mind—may be pinning hopes on some other event or date after which some version of “rescue” will come: a vaccine, a cure, a reliable and cheap test, the acquisition of herd immunity. But to review the brutal facts, none of these developments are likely in the foreseeable short term. The possibility remains that there may never be a fully effective vaccine or cure; this virus may be something that we live with and manage for years to come. Doing so will mean changing elements of our social interaction in unprecedented ways that may well lead to irrevocable social changes.

Already, the follow-on effects of the virus are enough to ensure there will be no normal to return to, as this incomplete list indicates:

Further, the pandemic is playing out against a backdrop of extreme economic, political, social, and meteorological instability. The Black Lives Matter protests that began in the United States in late May and spread worldwide have thrown another massive change agent into the equation. Meanwhile, globalization itself is under threat:

“Globalization describes a world economy increasingly integrated under a common set of rules and principles.” wrote Ian Bremmer, president and founder of Eurasia Group, in a personal correspondence. “We’re now experiencing the beginnings of an unwind, primarily because of a growing divergence in the rules and principles that major participants in the global economy operate by. The three most powerful economic actors in the world—the United States, China, and Europe—are growing further apart in their economic strategies, and that’s going to become increasingly obvious as we see how they act under unusual stress.

The Stockdale Paradox—have faith, but confront reality—can be seen in slightly different forms in many cultures.

Stockdale himself was a follower of the ancient Greek Stoic philosophers, who were noted for their concern with understanding reality correctly and shaping one’s response to it optimally. The maxim of Epictetus, “What, then, is to be done? To make the best of what is in our power, and take the rest as it naturally happens,” has similarities to both Buddhist doctrine and the Alcoholics Anonymous Serenity Prayer. (“God, grant me the serenity to accept the things I cannot change, courage to change the things I can, and wisdom to know the difference”). Therapy techniques such as radical acceptance similarly emphasize the point of letting go of desires and beliefs about what should be and seeing reality as it is.

These approaches do not maintain that people should not try to change external conditions, nor that we should have no emotional responses to them. People are neither sheep nor robots. In the words of Marsha Linehan, the founder of radical acceptance: “Radical acceptance doesn’t mean you don’t try to change things … You can’t change anything if you don’t accept it, because if you don’t accept it, you’ll try to change something else that you think is reality.”

And while Stoicism may colloquially refer to repressing emotion, such repression was never part of original Stoic doctrine. And neither emotionlessness nor constant positivity are a hallmark of emotional adjustment during crisis. “In general, resilient people have intensely negative reactions to trauma,” writes Emily Esfahani Smith. “They experience despair and stress, and acknowledge the horror of what’s happening. But even in the darkest of places, they see glimmers of light, and this ultimately sustains them.”

How does mechanisms of survival work?

Why do so many wisdom traditions converge on this basic paradox? The discipline of survival psychology—the study of how people react in disasters—may hold a clue. Psychologist John Leach has spent his career studying survival.

“We are all day-to-day survivors. We are alive today because from childbirth our behaviour has adapted to our own particular environment,” Leach writes. “The danger arises when we are forced outside of our adapted environment. This suggests that there are two types of survival behaviour: intrinsic and extrinsic. Intrinsic survival is supported by our daily, regular, routine behaviours within our normative environment. Extrinsic survival refers to those new behaviours we need to survive in an environment or situation not previously experienced: from a shipwreck to a kidnapping, from a fire in an office block to an airliner crash in the jungle.”


Part of the exhaustion common now is that our intrinsic survival mechanisms—such basic behaviors as how to enter a building, or bring in the mail, or greet a friend—require conscious thought in a way they have not since toddlerhood. The services and businesses that facilitated our lives—childcare, dry cleaning, the coffee shop on the way to work, gyms, housecleaners—are shuttered or more difficult to access. Masks must be found and worn and cleaned. Simple conversations require managing new technologies and protocols. Even walking down the street requires a level of hypervigilance not required in even the most dangerous neighborhood.

Research by Leach and others indicates that people who survive disasters are able to regain cognitive function quickly after the event, assess their new environment accurately, and take goal-directed action to survive within it. This is the balance that the Stockdale Paradox facilitates: the realism to let go of intrinsic survival mechanisms and the deep-seated faith to learn the new ones.

Applying survival psychology to the current crisis may be extending the mandate of the discipline—the business leaders who are our reading audience are unlikely to face crises of literal, physical survival. However, the pattern of human response to disasters has been shown to be remarkably consistent across cultures, and for disasters of many different causes, effects, and durations, from earthquakes to shipwrecks to kidnapping. There is every reason to believe that the responses to less-direct threats will be similarly structured.

All disasters have in common phases of pre-impact, impact, and recoil, with typical behaviors occurring during each. In short-term disasters, these three phases are followed by rescue and post-traumatic adjustment. This is what is happening in many countries now, where the virus is being contained and normal activities are resuming, with some modifications. In long-term disasters, rescue does not come, or comes long after expected. This is closer to the situation in the United States. We argue that CEOs who are reporting demotivation and depression in themselves or their teams are currently experiencing the shift from short-term to long-term crisis. That shift is difficult at best. The circumstances of this particular shift, particularly the awareness that things could have played out differently, make it especially difficult. Leach writes in Survival Psychology that hope is curvilinear during long-term crises: “[H]ope is strong at the beginning of an ordeal but weakens substantially if relief does not arrive after an acceptable period of time. What counts as an acceptable period seems to vary from person to person.”

Once it becomes clear that rescue will not happen soon, those who survive move into the phases of adaptation and consolidation. Leach’s description of adaptation is worth quoting in full:

“During the period of adaptation there is a slight initial decomposition of a victim’s psychology. There is a breaking of the links of his previously learned behaviour. Once broken, the survivor’s behaviour can be adapted and rebuilt to better fit the new environment. Initially, there is a natural reluctance to believe that the old environment has been torn away during the period of impact and consequently denial, crying, anger, and weakness are frequent reactions. The period of recoil follows, which is a further breakdown in the psychological bonds shown by despair, grief, depression, and so on. Only once the victim is through this period can new survival behaviours be developed.”

More at  –  Courtesy the Harvard Business School, The Stockdale Paradox and survival psychology contain wisdom for how leaders can manage the coronavirus crisis, according to Boris Groysberg and Robin Abrahams.

McKinsey Survey How Cos. and People Respond to Pandemic

People say that a variety of factors would help them feel safer returning to normal activities.

Many employers reported they are implementing safety measures that employees say make them feel safer.

Many parents say they will need new working arrangements if schools and daycare facilities partially reopen.

McKinsey & Company is an American management consulting firm, founded in 1926 by University of Chicago professor James O. McKinsey, that advises on strategic management to corporations, governments, and other organizations worldwide.

The Pandemic Will Change American Retail Forever

The big will get bigger as mom-and-pops perish and shopping goes virtual. In the short term, our cities will become more boring. In the long term, they might just become interesting again.

Last weekend, I walked a mile along M Street in Washington, D.C., where I live, from the edge of Georgetown to Connecticut Avenue. The roads and sidewalks were pin-drop silent. Movie theaters, salons, fitness centers, and restaurants serving Ethiopian, Japanese, and Indian food were rendered, in eerie sameness, as one long line of darkened windows.

Because the pandemic pauses the present, it forces us to live in the future. The question I asked myself walking east through D.C. is the question so many Americans are all pondering today: Who will emerge intact from the pandemic purgatory, and who will not?

In the past three weeks, I’ve posed a version of that question to more than a dozen business owners, retail analysts, economists, consumer advocates, and commercial-real-estate investors. Their viewpoints coalesce into a coherent, if troubling, story about the future of the American streetscape.

We are entering a new evolutionary stage of retail, in which big companies will get bigger, many mom-and-pop dreams will burst, chains will proliferate and flatten the idiosyncrasies of many neighborhoods, more economic activity will flow into e-commerce, and restaurants will undergo a transformation unlike anything the industry has experienced since Prohibition.

This is a dire forecast, but there is a glimmer of hope. If cities become less desirable in the next few years, they will also become cheaper to live in. In time, more affordable rents could attract more interesting people, ideas, and companies. This may be the cyclical legacy of the coronavirus: suffering, tragedy, and then rebirth. The pandemic will reset our urban equilibrium and, just maybe, create a more robust and resilient American city for the 21st century.

To see how the pandemic is already reshaping American retail, you don’t even have to go outside and count storefronts. Your receipts and credit-card statements tell the whole story.

On Thursday, the U.S. Commerce Department reported that retail spending in March collapsed by the largest number on record. Travel spending—including on airlines, hotels, and cruises—is down more than 100 percent, if you include refunds. Department stores and clothing stores are facing an extinction-level event after having experienced years of decline. Pockets of resiliency and even strength include grocery stores and liquor stores, which in March had their best month of growth on record. Home-improvement spending is up as well.

Some of these changes are violent interruptions to modern life, like the closing of gyms and cessation of sit-down restaurant service. But in the long term, COVID-19 probably won’t invent new behaviors and habits out of thin air as much as it will accelerate a number of preexisting trends.

One obvious example is that the pandemic is accelerating the retail reckoning. Over the past 50 years, the number of American malls grew almost twice as fast as the U.S. population, to the point that in 2015, the U.S. had 10 times more shopping space per capita than Germany. Such abundance makes no sense in the age of Amazon. Overleveraged, overbuilt, and oversprawled, American retailers had a long way to fall as the country moved toward online shopping. In 2017, and again in 2019, physical-store closures reached an all-time high, led by the decay of suburban totems like Sports Authority and Payless.

The year 2020 may bring the death of the department store, marking the end of that 200-year-old retail innovation after decades of decline. Macy’s has furloughed more than 100,000 workers. Neiman Marcus has filed for Chapter 11. More legacy department stores and apparel retailers will almost certainly follow them to bankruptcy court or the corporate graveyard. As these anchor stores shutter, hundreds of malls that were already wobbling in 2019 will be knocked out in 2020.

The pandemic will also likely accelerate the big-business takeover of the economy. In the early innings of this crisis, the most resilient companies include blue-chip retailers like Amazon, Walmart, Dollar General, Costco, and Home Depot, all of whose stock prices are at or near record highs. Meanwhile, most small retailers—like hair salons, cafés, flower shops, and gyms—have less than one month’s cash on hand. One survey of several thousand small businesses, including hotels, theaters, and bars, found that just 30 percent of them expect to survive a lockdown that lasts four months.

Big companies have several advantages over smaller independents in a crisis. They have more cash reserves, better access to capital, and a general counsel’s office to furlough employees in an orderly fashion. Most important, their relationships with government and banks put them at the front of the line for bailouts.

The past two weeks have seen widespread reports of small businesses struggling to secure funds from the federal government. Larger companies do not seem to be experiencing the same delays. In one particularly controversial case, Ruth’s Chris Steak House—a public company with 159 locations and $87 million of cash on hand—announced that it had secured $20 million from a small-business rescue program that ran out of money before it could help countless independents. (Ruth’s Chris later pledged to return the money, and the federal government replenished the pot, though it will likely run out again quickly.)

Courtesy of The Atlantic by Derek Thompson, More reading…

Leadership for a New Era.

COVID-19 has created a massive humanitarian challenge: millions ill and hundreds of thousands of lives lost; soaring unemployment rates in the world’s most robust economies; food banks stretched beyond capacity; governments straining to deliver critical services. The pandemic is also a challenge for businesses—and their CEOs—unlike any they have ever faced, forcing an abrupt dislocation of how employees work, how customers behave, how supply chains function, and even what ultimately constitutes business performance.

Confronting this unique moment, CEOs have shifted how they lead in expedient and ingenious ways. The changes may have been birthed of necessity, but they have great potential beyond this crisis. In this article, we explore four shifts in how CEOs are leading that are also better ways to lead a company: unlocking bolder (“10x”) aspirations, elevating their “to be” list to the same level as “to do” in their operating models, fully embracing stakeholder capitalism, and harnessing the full power of their CEO peer networks. If they become permanent, these shifts hold the potential to thoroughly recalibrate the organization and how it operates, the company’s performance potential, and its relationship to critical constituents.

Only CEOs can decide whether to continue leading in these new ways, and in so doing seize a once-in-a-generation opportunity to consciously evolve the very nature and impact of their role. Indeed, as we have written elsewhere, part of the role of the CEO is to serve as a chief calibrator—deciding the extent and degree of change needed. As part of this, CEOs must have a thesis of transformation that works in their company context. A good CEO is always scanning for signals and helping the organization deliver fine-tuned responses. A great CEO will see that this moment is a unique opportunity for self-calibration, with profound implications for the organization.

We have spoken with and counseled hundreds of CEOs since the pandemic first hit. It is clear to us that they sense an opportunity to lead in a new, more positive and impactful way. If a critical mass of CEOs embraces and extends what they have learned during the pandemic, this CEO moment could become a CEO movement—one that is profoundly positive for the achievement of corporate, human, and societal potential. As Rajnish Kumar, chairman of the State Bank of India, reflects, “This will be a true inflection point. I think that this pandemic, in terms of implications, will be as big an event as World War II. And whatever we learn through this process, it must not go to waste.”

Aspire 10x higher

The global health crisis and its resulting business dislocations have unlocked change at a pace and magnitude that has made even the boldest and most progressive of CEOs question their assumptions. From what we have observed, there are at least two related areas that are ripe for innovation: goal setting and the operating model.

Think bigger and faster

During the pandemic, many organizations have accomplished what had previously been thought impossible. Cincinnati Children’s Hospital Medical Center (CCHMC), for example, scheduled 2,000 telehealth visits in 2019. It is now handling 5,000 a week—a goal that, prior to the pandemic, it had estimated would be accomplished several years from now and only after a large-scale transformation. At Dubai-based Majid Al Futtaim (MAF), attendance at movie theaters fell (as a result of government-mandated closures) while demand for its online supermarket soared; in two days, the company retrained 1,000 ushers and ticket sellers to work for the online grocer. Without the crisis, that speed and magnitude of reskilling to leverage talent across MAF’s portfolio of companies would never have been contemplated. Best Buy, which had spent months testing curbside pickup at a handful of stores, rolled it out to every store in just two days. In four days, Unilever converted factory lines that were making deodorants into ones making hand sanitizer. Life insurers have wrestled ingeniously with a unique COVID-19-related problem, says Jennifer Fitzgerald, CEO of Policygenius, an online insurance broker: “Some consumers don’t want the examiner in their house. We’ve seen a lot of flexibility from carriers. Some have moved quickly on the electronic medical-record side. We’ve also seen carriers increase the face amount that they’re willing to underwrite using data instead of the medical exam. . . . Overall, I think this has pushed the industry to adopt some changes much more quickly than it otherwise would have.” In a week, companies went from having 100,000 people working in offices to having 100,000 people working from home—a shift requiring systems and policy transformation that under normal circumstances might have taken years.

Of course, the unprecedented scale and speed of the pandemic have created “burning platform” impetus for these feats, but it is still remarkable that organizations have been able to make it happen. These achievements have come partly from people working faster and harder, although this is not the whole story, and many CEOs are taking the long-term view. Says Guardian CEO Deanna Mulligan, “We’ve been worried about our broader team in general because they’ve been working very hard. We’ve found that people are substituting their commuting time with working. Our IT guys are telling us that they’re getting three extra hours a day out of the coders. We’re mandating across the whole company that they can’t work after a certain hour at night or that they have to take vacation because nobody’s taking their vacation days; they don’t want to waste their time off hanging around at home. But it’s going to be this way for a while, and we don’t want them to go a whole year working at this pace without a break.”

CEOs are recognizing that the barriers to boldness and speed are less about technical limits and more about such things as mindsets toward what is possible, what people are willing to do, the degree to which implicit or explicit polices that slow things down can be challenged, and bureaucratic chains of command.

Realizing this, CEOs are appropriately celebrating the magnitude of what their organizations have achieved and considering how to stretch for more. Michael Fisher, CEO of CCMHC, thinks that going forward telehealth will account for up to 50 percent of visits in certain ambulatory settings, and perhaps 30 percent of visits overall. Before COVID-19, less than 1 percent of visits were telehealth. Says Fisher, “I keep pushing myself and our team to think about how we use this inflection point to reimagine our potential together, as opposed to allowing our organization to just go back to the comfort of ‘Let’s do what we’re doing.’”

Research by our colleagues in McKinsey’s Strategy and Corporate Finance Practice has long shown that CEOs making bold moves is vital to achieving outstanding performance, which itself is elusive—only one in 12 companies goes from being an average performer to a top-quintile performer over a ten-year period. Making one or two bold moves more than doubles the likelihood of making such a shift; making three or more makes it six times more likely. Our research has also shown that CEOs who are hired externally tend to move with more boldness and speed than those hired within an organization, partly because of the social pressures that constrain internally promoted CEOs. As a result, we often advise CEOs who are promoted from within to ask themselves the question that famously prompted Andy Grove and Gordon Moore to focus Intel on microprocessors: “What would an outsider do?” Given the performance we have seen during the pandemic, we would now encourage CEOs to ask themselves and their teams a follow-on question: “What would your COVID-19 answer be?” The power that these frames of reference hold, to reimagine the possible and recalibrate what can be achieved, is profound.

Other questions for CEOs to reflect on to help calibrate their aspirations include:

  1. Where should we be aspiring 10x higher and/or 10x faster?
  2. What beliefs or long-held assumptions do I need to explicitly reset in the organization and with stakeholders to achieve this?
  3. What do we say no to, or stop doing, to create the additional space to go bigger and faster?

Article Courtesy of McKinsey & Co., By Dewarm Keller, Sneader & Strovink

Further reading at




Charts Show U. S. Shopping Behavior Is Changing

75% of consumers have tried a new shopping behavior, and most intend to continue it beyond the crisis.

American have picked-up low-touch activities, and some plan to continue them after the crisis.

Expected change to time allocation over the next 2 weeks

Americans are changing how they spend their time, dedicating more time to domestic activities, media, and news.

As economies reopen, 73 percent of consumers are still hesitant to resume regular activities outside the home. They are concerned about going to a hair salon, gym, or restaurant, but are especially worried about shared environments, such as public transportation, ride sharing, air travel, and being in crowded spaces, such as attending large indoor or outdoor events.

US consumer-segment behavior varies significantly across the next-normal trends. We have identified five customer segments driven by optimism, health, and financial concerns, each of relatively similar size. These five segments exhibit the consumer trends to a different degree and have the following characteristics:

Affluent and unaffected: These consumers express general optimism about the future (~20 percent higher than the overall US consumer population), skew male (60 percent), and make more than $100,000 a year. They tend to be able to stay at home during the pandemic crisis, allowing them to shop more online. This group is slightly less price sensitive than other cohorts due to greater job stability.

Uprooted and underemployed: These consumers are feeling major impact on both their finances and health due to job insecurity. They are cautious about how they spend money, with low optimism about future economic conditions. Not surprisingly, this group is trading down to essentials and value, swapping out brands, and shopping online when possible.

Financially secure but anxious: This population is largely 65 years old and older and is generally pessimistic about economic conditions after COVID-19, which has had a major impact on their habits. This group has expressed the greatest need for hygiene transparency, with above-average concerns on safety and well-being and concerns about the ability to get necessary supplies.

Out trying to make ends meet: These consumers are being cautious about how they spend money and feel that their jobs and job security have been heavily impacted by COVID-19. This group has significant representation from minority groups and rural populations. They are less likely to be able to stay at home (hence their lower likelihood to be part of the homebody economy), but they are strongly moving toward shopping for essentials and value.

Disconnected and retired: This category denotes those who are retired, over 65, and have a lower income level than the financially-secure-but-anxious segment. They are broadly optimistic about economic conditions after COVID-19 and are less likely to display any of the next-normal characteristics. Predominantly from Southern and suburban areas of the country, this group has not exhibited significant changes in shopping behavior.

Courtesy of McKinsey & Co.