Business Musings: Disruption
Well, here we go again.
That’s my reaction, after a brief few hours of panic, about the coronavirus. (Yes, I know it’s called officially called COVID-19, and I know why it’s called that, because I do read the science. But because everyone else is calling it The coronavirus, we will too.)
Why am I being blasé? I’m actually not. I’ve just lived long enough to know that every once in a while, world events (or national events) throw a curveball at the expected.
Right now, I’m most reminded of the days before 9/11 (and a note on terminology: we’ve had 18 September 11ths since that one, but everyone knows what you mean when you say September 11). In those days, the broadcast news media believed that a sitting U.S. Congressman had murdered his lover, an intern. She had disappeared, and an investigation into her disappearance revealed her affair with the congressman. Juicy stuff, perfect for tabloid journalism. Yes, many other things were being ignored, but we were able to ignore them, because, at that moment, the country seemed relatively stable.
Then we had the terror attack on New York, Pennsylvania, and DC, and by September 12, that little murder story had become such old news it felt like it belonged to another era. In fact, when the police finally discovered the intern’s body, it barely made the news at all…until it became clear she had been killed by an active serial killer, not a congressman.
Anyway. I’ve been thinking about that sudden press shift. All of us, in every country around the world, have been following some of our pet news stories, whatever they are, from the election here in the U.S. to Brexit in Europe to many, many, many other things.
I stopped following the news altogether the past few weeks, even online, because I was prepping for the Anthology workshop here in Las Vegas. So when my phone informed me, in the middle of the workshop, that the stock market here in the U.S. had plummeted 1,000 points early in the week, I wasn’t even sure why.
I know now. Coronavirus. Not fear of infection. Fear of the impact on the economy.
I’d been following the virus news for weeks now, because I live in Las Vegas, and we’re a big destination for travelers during Chinese New Year. So the city has been doing virus prep and prevention since the early part of the year. It doesn’t make us safe, but it makes us safer than places that thought they were just fine and discovering they are not—like Oregon, where I used to live. They’re in the middle of it all now.
I’m writing this on Saturday, February 29, just so you can see the timeline, and by the time most of you read this on Thursday, the news will be different. A lot will have changed. Because big science stories like this have major reveals, as the scientists discover more things, as communities realize that they’re in the middle of an outbreak, as people try to close the barn door after it’s been open wide for weeks.
My moment of panic, to be fully honest here, comes from the fact that I nearly died two years ago this month. My immune system was so compromised that a strong chemical scent from workers laying a countertop near the site of that year’s anthology workshop laid me flat. I couldn’t return to the hotel and I could barely hold it together to talk via Skype. That event was the last straw, which led to our sudden move. Because I could barely function anymore.
I’d lived like that for years, and it got worse and worse. Each in-person workshop we held caused me to be sick with some kind of virus (probably a few known coronaviruses) for weeks on end, especially if someone got infected on the airplane and then shared.
So, when I saw the news about the virus spreading through communities, I had my panic, figuring I’d be the first one sick and the last one to get better, if I got better at all.
That’s not my reality anymore. I’m much healthier. The last virus I had, over the summer, caused a one-day illness (and three-day recovery) just like other “normal” people.
Which isn’t to say that I’m blithely believing I’ll be fine if I come in contact with the virus. I’m taking precautions. But I’m not panicked.
We have food and supplies stockpiled to get us through two weeks of sickness, and we’re set on other prep as well. Whatever happens along those lines will happen.
But that’s not where my here we go again reaction came from.
It comes from the Black Swan event.
A Black Swan is an economic term for an unpredictable event that essentially changes the trajectory of anything from the stock market to an economic system to the worldwide economy. Black Swan events have potentially severe consequences. Black Swan events sometimes look predictable in hindsight, although they often are not.
(Already, you’re hearing economists talk about the fact that, here in the U.S., the administration gutted the funding for the Center for Disease Control and planning for things like an epidemic, and the economists are saying, We should’ve known… They’re right and wrong. We shouldn’t have done that, and should have known, but who could know that something would hit at the beginning of 2020?)
I’ve blogged about this before. I fully expected 2020 to be a small version of a Black Swan event, although I figured the year wouldn’t meet the criteria because the event was predictable. The U.S. election, I figured, would suck all the air out of the world, not just here in the U.S., but worldwide. Coupled with Brexit, those two events would make 2020 unpredictable.
I did not expect a possible worldwide pandemic, coming out of China (they think). In fact, if you were writing a contemporary political novel about an important election, and you added a pandemic into the mix, I would have urged you to remove it. How many times has that happened? I would have said. That just muddies your message.
Well, life is more unbelievable than fiction in a bunch of ways. We have a crucial election in the U.S., a change in Europe’s economic system, and, now, a virus that might actually become a pandemic, depending on what the other countries do to contain it.
I am not going to write about actual virus preparedness, nor am I going to write a blog about what went wrong. I would urge those of you having your own moment of panic to read the science that’s coming out of all of this, and figure out how you and your family fit into the various infection categories.
But I’m talking about a Black Swan event, and the term Black Swan comes out of economics, not out of disease prevention.
When a pandemic (or an epidemic) hits, systems shut down. Global supply chains get broken. We’re already seeing that.
The U.S. stock market, this past week, wasn’t responding to the science of the virus, it was responding to the potential economic impact of the virus. And, given what’s been happening over the past few weeks, the potential economic impact will be severe.
Supply chains have already been disrupted because of the initial quarantines in China. Travel bans have formed all over the world, some focused on regions, some on countries. Some places have warned against all air travel. Some experts are warning anyone with a compromised immune system and/or over 55 and/or with someone with those conditions at home to cancel all travel.
I suspect my home city of Las Vegas won’t have as good an economic year as it expected as recently as December 31. I know of several conferences, including one of ours, that have been canceled out of an abundance of caution.
The writers I’ve talked with, though, have been smug. People read during a crisis, those writers say, and that’s actually true. Book sales eventually go up, as well video downloads, any games that can be played at home, and all of the streaming services.
I hope you notice that I wrote “eventually.” Because that’s where my here we go again comes from.
In the first weeks, sometimes months, of a crisis, people become hypervigilant. They consume news above all else. They only talk about the crisis. They don’t have the bandwidth to do anything other than live their lives.
If they aren’t swimming in money (or even if they are), they stop spending on everything except essentials. They aren’t sure if they can afford a purchase of more than $20, because they don’t know what will happen in the future, and that fear of the possible future will actually make them freeze.
There’s a term for this as well. It’s called an Adjustment Reaction.
You’re moving from what you consider to be normal to a new normal. And when that happens quickly and unexpectedly, there’s a set human response.
According to risk communications experts Jody Lanard and Peter Sandman, manifests itself in stress, and hypervigilance. You will worry about the effect of this new normal on you and your family, and if you’re smart, you’ll research the heck out of whatever the new problem/normal is.
Lanard and Sandman consider this response healthy. It leads to psychological preparedness for that new normal. But they believe it is better to prepare early in the crisis than it is when the crisis hits your community or your home or you.
That way, you will be able to handle the psychological curveballs that come your way.
I can’t help you through the physical aspects of getting sick.
But I can help your writing business.
In the next few months—especially early March—book sales will decline. Extras will decline as well. If you do things that cost big amounts of money, sell expensive limited editions or sell books at conferences, expect those things to dry up first.
Your entire income will not go away, but it will decline.
Then we will hit the new normal. Book sales will either rebound or increase. Online sales will go up, particularly of entertainment. Travel might take six months to a year to recover.
Expect a lot of businesses to go under. Some won’t be able to survive the cancellations. (Imagine a business that is air-travel dependent right now.) Others businesses will be badly hurt by all of this, and will disappear in the next year.
Any business that is on shaky financial ground might go under during this time, because people are hoarding their money.
So what you’re used to from restaurants to smaller online services to anything else you can imagine might change or go away.
The key for you and your business is to plan for all of this. Expect your income to go down between now and May. If it doesn’t, great. If it does, you’re ready.
Cut expenses as much as you can. (You should do that anyway.) Get rid of the fat in your business, the stuff you planned to cut but hadn’t done so yet.
However, continue spending on the essentials. Those might be anything from cover designs to staff (if you have staff). Now might be the time to take an online course, which will be cheaper than flying to some conference somewhere.
Substitute good, less expensive things you can do from home for the more expensive things you would do in a good year.
Those of you in the U.S., realize that the election will absorb the attention of the entire country from mid-October through November, and, depending on the outcome, maybe all the way through the end of the year. So the nation will be focusing on something other than reading fiction again in 2020.
Don’t expect 2020 to be a banner year. If your growth remains the same as 2019, excellent. If your sales decline in 2020, don’t see that as a trend. See that as normal in a year like this one.
Most important of all, don’t panic about the changes. Allow yourself an initial panic and some paranoia, remembering that it’s healthy to do so as you adjust to this new normal. Then move forward with lowered expectations.
After that, continue your writing and your publishing schedule. Release books into this mess, because you don’t know when reading will uptick again. It might go up next week. It might be mid-April. It might be July. But if your books are already published, you’re prepared to take advantage of the increase in reading that comes after the arrival of any crisis.
Earlier in the year, I posted on Twitter that motto of the year 2020 should be What Fresh Hell Is This? (with a hat-tip to Dorothy Parker). I stand by that motto.
Here we are, beginning the third month of a chaotic year, and we’ve had a health crisis that’s leading to a Black Swan event. We haven’t even hit the U.S. election yet.
So, write off 2020 as a growth year. If growth happens for you, great. But if it doesn’t, don’t worry. By 2021, we will have adjusted to the new normal, whatever it is.
Take care of yourself during this health crisis. Revise your business plans. And…um…read a lot. Help your fellow writers that way.
Most of all, don’t panic. Plan as best you can.
We will get through this.
We always do.
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“Business Musings: Disruption,” copyright © 2020 by Kristine Kathryn Rusch. Image at the top of the blog copyright © Can Stock Photo / Brebca.