Sunday Message From Ben: From Sprint to Marathon
May 3,2020
Aloha,
This morning I drove with one of my boys to pick up some fresh fish. He had not been out in a while and remarked, “it seems like a normal Saturday.” We looked closer and I pointed out the long line of cars on Houghtailing Street, stretching almost to the Bishop Museum. The long line of cars were people waiting to pick up food from the Foodbank, a consequence of 35% unemployment, roughly 250,000 people not working, and still 180,000 unemployment claims in the queue for processing.
We are slowly returning to activities that will seem normal, but under the surface, everything is changing.
We are moving from the sprint to the marathon.
The freefall is over, but the long grinding period of adjustment to lower economic activity is just beginning, and this is going to be one tough marathon. Hawaii, with our 2,500 miles of ocean, is both more isolated and more connected than any other place. Today, a third of our economy is turned off. There is no plan to restart it and little public discourse about the long term social and economic cost.
As a State we seem to be looking just in front of us, at the virus and processing unemployment claims. Those are urgent needs. But the commitment today has got to be jobs, and not just any jobs, but tourism. It's silly to talk about diversification today. The numbers don’t lie. Without focused innovation to make tourism successful during the long marathon of COVID-19 we will face deep hardships for our community. So far we aren’t acting connected.
But ultimately, our geographic isolation and our island-interconnectedness are our opportunities for innovation. The opportunities are there, and hopefully, our dire circumstances will bring them out. We have an opportunity to clearly articulate and decide: How much can we tolerate impingement on civil liberties to reopen the economy more completely? How do we balance the COVID risks with the economic ones? We need a vision and a commitment to moving forward. We have an opportunity to come together, discuss and disagree, but ultimately we must commit and say, “let’s find a way.”
We talked about this with Micah Kane, Dean Wong, and Kim-Anh Nguyen – three incredible non-profit leaders this week. These leaders and their organizations are inspiring. They see the growing and changing demand for social services and are “running towards the fire” with new solutions and bold leadership. They are leading and driving positive change to solve problems for our community. For some great practical “how to’s” that apply to any business, as well as inspiration, have a listen this Sunday!
More clients are getting their PPP loans funded and now face the vexing problem of being “on the clock” for the eight week measurement period for loan forgiveness while our economy is still mostly shuttered. This is frustrating. But if some of the loan is unused and just becomes a 1% loan, that liquidity could be useful in the long marathon back to profitability. The goal isn’t just to open, you’ve got to get back to profits before the liquidity runs out.
Our team of HR experts has put together a fantastic strategic guide to planning use of your PPP loan. If you only read one thing today, please read this Guide!
This week I’ve been thinking about the problems that will show more clearly as we reopen. What I’ve begun to realize is that our business models are finely tuned and completely interdependent. We are all connected. For example, restaurants required a certain volume of throughput, at a certain price, for profitability. The landlord sets the rent based on the carrying capacity of the restaurant. Airlines and hotel business models are based on high levels of asset utilization and throughput too, as are tour operators. Each supports the other, and vice versa. Doctors, dentists, and service providers like us will see similar changes – all in disequilibrium now.
My takeaway is that each employer must define, “what are my burning questions? How must my business model change to be successful in this new era?” These questions are not easy to address, and the work needs to begin now. These are going to be hard decisions, and since we are interconnected we must try to work through the challenges together, knowing that you only control what you control. This starts with a solid plan that you update regularly and clear, forthright communication. Welcome to the marathon. Let’s keep moving forward together.
Please read our Strategic Guide to Use of PPP Funds and sign up here for a consult if you would like to talk through the workforce planning for your business. We don’t have all the answers, but we are here to help.
With much aloha,
Ben Godsey
President & CEO