The pandemic has moved on from a health emergency to an economic crisis. In the immediate aftermath of the lockdown, we were not talking about the recession as we would have done in the past, possibly because we are living in exceptional circumstances and our focus was on the immediate impact on our businesses, rather than taking in the wider economic picture.

But it has now been widely acknowledged that we are deep into a recession that brings with it unique challenges – in previous recessions there was light at the end of the tunnel. But who can predict when, if ever, a vaccine will be found? 

Since March, businesses in most countries have strived to minimise the impact of the pandemic. The problem now is that, having managed to steady the ship, they have no idea how long this period of stasis will last. Optimists may talk about the possibility of being able to celebrate Christmas this year or how they are looking forward to an economic rebound in 2021. But we pragmatists must knuckle down and make sure that our businesses have both the resilience and the financial resource to see them through not just the next few months but potentially most of 2021, if that’s what it takes. 

Whether or not this becomes the worst recession in memory will depend on where in the world you live. What is certain though is that it is going to take several years, at best, for most countries to work their way out of this downturn and get back to 2019 levels of activity. 

Another unique feature of this recession will manifest itself in the failure of many good businesses. Previous recessions affected certain sectors and, generally, the good businesses survived. So to see good businesses close their doors is a new phenomenon. It’s happening in the UK in sectors like hospitality, retail, tourism, leisure, travel and the arts. Well-known names such as Laura Ashley and TM Lewin have all called in the administrators. Many others are also on the edge of insolvency.

The fight for survival will require vision, patience and capital. But when we finally return to normality, the businesses that survive will be in a position to lose some of the legacy encumbrances that have acted as a drag on strategic creativity, and reinvent themselves. It will be important for their leaders to take a different approach and adopt measures that a 21st century board should aspire to – reducing their carbon footprint, increasing efficiency and achieving the UN’s Sustainable Development Goals. 

If there is an upside to this pandemic, it is the opportunity for businesses to embrace change for the better – provided, of course, that their boards are brave enough.