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A Whole New World
The COVID-19 pandemic has had a profound effect on the way we conduct business, but could this new reality produce long-term benefits after the short-term suffering?

by Peter Proko
Since the COVID-19 pandemic began to alter life around us as we know it, every passing hour seems to bring new developments in the country’s rapidly evolving fight against the coronavirus. And whether you’re the owner of a large-scale corporation, a high-level executive at a mid-sized company or a dedicated employee of a family-run small business, the unsettling nature of this crisis from both a business and societal standpoint has spurred a wide range of emotions, from the fear of uncertainty to an unwavering determination to rise to the occasion.
As the federal government and the nation’s financial leaders continuously look to address how the coronavirus is adversely affecting the business world, as of press time Congress was in the middle of negotiating a $1 trillion economic stimulus package to help businesses and individuals impacted by the crisis.
Meanwhile, at home here in South Jersey, newly adopted state legislation has tried to stave off long-term damage. At press time, Gov. Phil Murphy had just received a package of two dozen measures designating tens of millions of dollars to protect workers and business owners like.
The Small Business Administration also began offering low-interest federal disaster loans as high as $2 million to try and inject some cash flow. However, while Gov. Murphy supports the move, he says it might be better for some businesses to take a wait-and-see approach as they may ultimately qualify for federal grants that aren’t required to be paid back.
Forced upon this new reality, local businesses are doing what they can to weather the storm and prepare for the road ahead. It won’t be easy, but of the folks we spoke with, there is a resilient collective confidence to come out on the other side even stronger than before.
With normal everyday business operations altered as employees are dispatched to work remotely, supply chains are interrupted and discretionary consumer spending has been slowed, the ability to adapt and implement strategic planning to limit vulnerability has proven to be a pivotal first defense in crisis management.
“Strategies relate to a constant assessment of a company; its assets and liabilities, reserves, future projects, staff competencies and workload, etc.,” says Marlene Asselta, president of the Southern New Jersey Development Council. “These aren’t necessarily steps related to a national crisis, but just good business practices, ones that should be considered when writing or reviewing a business plan.”
The Local Impact
In South Jersey, the ripple effect of the coronavirus crisis is still being measured as business leaders continue to take stock of its impact in the short term while simultaneously trying to predict long-term consequences.
Doing their part to help navigate through the murky waters, local chamber organizations are serving as support systems for their members.
As a county chamber of commerce with a large and diverse membership, we are using all of our communication channels to keep our members informed about important information, tools and governmental benefits that can help them with their current needs,” says Janet Garraty, interim director of the Gloucester County Chamber of Commerce.
The Burlington County Chamber of Commerce has previously run several seminars related to work-from-home strategies and as of late it has been conducting webinars, hosting virtual meet-ups and using other technological tools to keep people connected.
“From what I see of our members, they are prepared and adjusting. Those who are prepared and who can show resiliency and compassion will weather the storm and come out on the other side of this back to business and ready to go,” Kristi Howell, president and CEO, says.
Steve Matteo, owner of Matteo Family Kitchens, saw his business immediately faced with unique challenges that he’s never experienced before. With several residential and commercial projects currently in the works, he’s taken a calculated approach to keep his business operating and his clients supported while also using abundant caution to keep his employees as safe as possible.
There are projects going on and materials ordered and it’s almost at the point of no return for some, and so that is where our challenges begin,” he says. While stressing the need to follow the advice of social distancing and practicing good hygiene, Matteo feels that things will regroup rather quickly.
“The economy will bounce back fast and we will resume quickly. We follow many remodeling reports and economic development in our area and all signs are positive once this crisis is behind us,” Matteo says.
That is a sentiment shared by Oliver Cooke, an economics professor at Stockton University. While he readily admits the recent news hasn’t been exactly encouraging, he also notes the serious attention the matter is receiving in Washington and at the state level.
“Right now you have a spending crisis. [During the financial crisis of 2007-2008] it was a liquidity crisis. Short term, you can probably grapple with a spending crisis a lot better,” Cooke says. “We learned a lot a decade ago, that’s why the Fed stepped in and said they were going to get ahead of this.”
Cooke says that despite the fallout thus far, things will take a noticeable turn in the right direction. “At some point, after several weeks, I can’t imagine there won’t be some pent-up demand of consumer spending that will follow in the wake of all this once everyone gets themselves back on track to some extent. That’s probably always the case.”
Stuti Jha, an assistant professor of economics at Rowan University, also agrees that the differences between the Great Recession and the coronavirus crisis are important distinctions to be made.
“The most important difference being that the COVID-19 crisis is caused by an exogenous shock to the global economy unlike the Great Recession which was the result of the housing market collapse in the United States,” says Jha. “This could mean that the global economy, including local businesses, will be able to bounce back relatively quickly once it is over as the slowdown will not cause any serious macroeconomic problem.
“Also, the recovery period after the Great Recession led to a fall in the labor force participation rate in America. The U.S. economy was slow to add jobs in the first five years after the recession which resulted in many discouraged workers leaving the labor force. Most of the job losses this time are likely to be recovered once consumer spending is up, which will boost production and thereby increase the demand for labor. Local and regional business have to brace for a rough ride, but the recovery time will be much faster.”
One area of caution is that while the government seems to have learned from the recent financial crises, loans to businesses may help pay the bills, but won’t necessarily generate revenue.
“The problem is that slowdowns can also be quite psychological—because of uncertainty, everyone hesitates to invest and avoid risks. Many businesses will cut back spending to reserve money, which could contract our local, then national economy,” says Dr. Shoko Kato, assistant professor of management at Rutgers University-Camden.
Local accounting firm Friedman LLP has been focusing its efforts on providing clients with resources and services to combat the ramifications. Managing partner Carl Bagell says that he sees many businesses rallying around their employees and thus becoming stronger in the long run as they move back to their core products and services.
“Everyone in some shape or form is being affected by this crisis,” Bagell says. “We are taking the time to physically reach out to our clients, partners and friends to check in to make sure they are OK. While giving the best accounting service is paramount, our goals are to support these people any way we can. That support comes in the form of information, introductions and creative ideas to help them sustain their businesses.”
Cross County Connection, a transportation management agency based in Marlton, often uses telecommunication to connect with employers, and marketing director Joe Wilson says there have been little disruptions with employees working remotely. “So far, it’s working with little complication,” he says. “It was something our organization was already working on, this situation led us to putting in place the necessary steps to make that a viable option very quickly.”
From an educational standpoint, learning institutions from elementary school through college were forced to shift to online instruction. While no one could have predicted this pandemic, Rowan College of Burlington County was well prepared according to its president Dr. Michael A. Cioce.
“Over the years, several public health emergencies have prompted us to prepare for a situation like the one we face,” Cioce says. “Every semester, as routine practice, we enable the vast majority of our courses to be able to convert to an online format. I have every confidence that we are prepared, but we will undoubtedly learn some things along the way that we can build upon for future emergency planning.”
One of the areas hit hardest by this pandemic is the restaurant and hospitality industry. With many employees struggling for answers, Marilou Halvorsen, president of the New Jersey Restaurant and Hospitality Association, says economic stimulation is the key.
“The number of people we employ in our industry is vital to the community. We’d like to see economic stimulation in the form of a sales tax holiday, which would create the cash flow these businesses need to operate; and we’re pleading with banks, landlords and mortgage providers to work with their tenants on deferring payments for a period of time,” Halvorsen says. “That just makes sense because they don’t want the storefronts empty; they’d rather have them be able to re-open in a month or two than walk away from the whole thing.”
Devon Segel, owner of Segel Associates, has a background in crisis communications with clients in government agencies, hospitality and tourism, technology, and disaster relief. He says that while businesses are being made to adapt quickly, they will be better because of it.
“Here, in South Jersey, we are strong, experienced and determined. Our business community will rise when ready. Until then, it’s important to make the next right decision as this situation evolves, and seek specific expert guidance when necessary. After this crisis, we will be better equipped to respond to future situations as business owners and members of the Greater South Jersey community.”
Timothy Guim, president and CEO of PCH Technologies, feels similarly. “I think long term that this crisis is challenging companies to think differently in regard to where and how some employees need to work. Having companies execute on their business continuity plans with many people working remotely will allow for new ideas and ways for employees, clients and partners to collaborate,” he says.

Learning Opportunities
In the midst of all this, some industries are booming. Online retail giant Amazon, with fulfillment centers serving as warehouse hubs across South Jersey, put out a call in early March that it was looking to hire 100,000 workers to help feed the demand. Courier services, health and consumer product companies were also doing quite well, according to Kato who says that regardless of industry, stronger companies can turn their crisis management into risk management as a way to poke holes through the clouds.

“Strong business leaders are able to see this crisis differently from the way most of us do, and act on it,” says Kato, who adds entrepreneurial thinking goes a long way in times like these.

“What can you create with what you currently have or know? With whom can you collaborate, not compete? Because we don’t know what will be the outcome of this crisis, there’s little meaning to set out a business goal and try to achieve it. When facing uncertainty, the opposite way of normal business—not setting out a goal, but, rather, letting a goal emerge; not competing, but working with your competitors—may work.”

The coronavirus pandemic originated in China, a country that accounts for a large portion of the global supply chain. The disruptions have been well documented, but the flipside is that it has forced some to rethink the way they obtain goods.

“At the local level, people are rethinking supply chains to the extent that you make sure you have more than one option. People in many industries do not,” says Cooke. “Longer term, there’s some upside there.”

While there appears to be glimmers of hope, anyone paying attention to the financial markets these past few weeks has seen the historic slumps. And when Wall Street panics it sends a reverberation felt by many more than just hedge fund managers. However, Stan Molotsky, president and CEO of SHM Financial, says now is not the time to start dumping stocks.

“The global coronavirus pandemic and stock market slump seem like an entirely new challenge to people. But this time really isn’t different. Should you buy stocks when the market crashes? History says the best move is to buy now and not sell,” he says. “This is a time to reflect on your risk tolerance, circle the wagons on your existing holdings and deploy extra cash methodically into the best stocks that are now selling at big discounts.

“The problem is it doesn’t work to our advantage as investors when the market crashes. Looking objectively at stocks that have crashed so much, and in some case seeing our own portfolios down even more, it is difficult when our brain chemistry is literally pushing us to get away from this dangerous thing that’s already caused us much harm.”

The Health Care Response

With hospitals and medical providers around the globe working around the clock, the toll a pandemic of this scale will have on the health care industry is being made painfully obvious.

“One big thing here is the health care cost associated with this pandemic, not only in terms of dollar value, but also in terms of its impact on the health of the workforce,” says Jha. “Even though most people infected by the virus recover from it, we still don’t know if it leaves any long-term health issues with those people. This virus has brought forth the fragility of the current health care system in the United States. If people are not diagnosed and treated on time, leaving them with long-term health problems, the productivity of these workers will suffer.”

To that end, Virtua Health System began making preparations in early February which have since evolved into establishing a command center that is operating 24/7 and includes representatives from all divisions of the organization. Further measures, similar to other hospitals in the area, have included instituting a no-visitor policy with limited exceptions for such cases as labor and delivery, palliative care, pediatrics and the neonatal ICU.

“The safety of our community—including our colleagues—is the No. 1 priority. In fact, safety is at the heart of what we do year-round as a health care organization. For years, our entire workforce has started each day with a safety huddle in which we discuss best practices and the importance of identifying and eliminating risks and errors. Our teams participate in routine training—including immersive simulations—to prepare for emergencies, whether it’s a natural disaster or widespread infectious disease,” says Dr. Reginald Blaber, Virtua’s executive vice president and chief clinical officer.

The New Jersey Hospital Association (NJHA) has been closely monitoring the need for supplies and while it has been exploring both federal assistance as well as the private supply chain, it has also seen hospitals devise creative practices in an effort to conserve what supplies they do have.

The challenge is that this is a global pandemic and other countries are trying to secure these very same supplies. That’s why it’s so important that we use the federal powers available here in the United States to secure supplies if they’re available and manufacture them if they are not. In the meantime, hospitals and their staff are being innovative in conserving supplies—as an example, moving IV pumps from individual patient rooms into the hall, with extended tubing, so that staff can check them without having to enter the patient’s room and put on new personal protective equipment. And other conservation measures, canceling elective procedures, for example, not only frees up bed space but also preserves supplies,” says Kerry McKean Kelly, vice president of communications and member services for the NJHA.

As South Jersey businesses and the community as a whole grapple with what comes next, it’s become evident that we’ll tackle things head on by showing signs of strength in numbers. After all, we are in this together.

To read the digital edition of South Jersey Bizclick here.

Published (and copyrighted) in South Jersey Biz, Volume 10, Issue 3 (March 2020).

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