02-07-2025
Business Leaders: Remember Lessons Of Covid When Managing Tariffs
Sumeet Salwan, human-capital entrepreneur & Cofounder of
getty
With the broad impact tariffs pose on society, it's easy to find parallels to Covid-19. A sudden crisis dramatically upends operations, ebbs and flows, and lasts an unknown period. When Covid hit, none of us had experienced anything like it in our lifetimes. It forced us to rethink many aspects of business we'd previously taken for granted.
Now, five years later, tariffs could present another crisis. Different genesis, but many potential similarities: lack of clarity beyond the next few months, supply chain disruptions, cost increases, stock market swings, new markets or products, big shifts in customer buying.
At least we're not starting from scratch. Many lessons we learned in business from Covid can be applied to today's circumstances.
1. Whatever the 'peacetime' value-creation plan was, start over.
You'll likely need a new one if you expect your business to be impacted by the Trump Administration's effort to reset the global economy. Recall that when Covid hit, businesses feared running out of cash and took actions to stave that off. And while it's wise to conserve liquidity amid high uncertainty, it's critical not to do that at the expense of change and growth.
This one's hard. Despite surviving Covid, business leaders might not feel terribly prepared for whatever is coming next. According to the January 2025 Accenture Pulse of Change survey, 72% of C-suite executives said they expect a high level of change this year.
While that's down from 88% in 2024, these same folks feel less prepared across all six areas Accenture surveyed. For example, when asked how prepared their organizations are to deal with geopolitical change, 64% said not fully prepared, up from 55% in 2024. On economic change, 59% said not fully prepared, up from 53% a year ago. Here's another thing that jumps out from that survey: While C-suite executives are concerned about a lack of preparedness, concern among employees was even higher—57% versus 64%, respectively.
Adopt a structured, methodical approach to develop a range of scenarios that would benefit your business and determine what's necessary to achieve each. What's the work? What are the skills? How much capital investment? While leaders are loathe to make big changes or investments when the situation on the ground is so fluid, doing the work will both position the company to move quickly when the ground is firmer and will sharpen your existing strategy.
2. Deploy talent where it's needed.
Interestingly, Covid went a long way toward getting businesses more comfortable shifting talent within their organizations. According to a 2021 McKinsey & Co. survey, Covid hastened the redeployment of talent. In fact, 46% of respondents to this survey reported an increase in redeployments, making it the second-most-critical activity for closing skill gaps. This is akin to an across-the-board bet on win, place and show in horse racing.
Win: The organization's best talent is working on its biggest, highest-profile challenges to ensure the company is ready to move decisively to address tariffs when the time is right.
Place: You break through silos that hold the business back generally, revealing deeper layers of overlap and bureaucracy that are slowing down decision-making while adding duplicative costs.
Show: Increased talent mobility builds employee engagement, which in turn reduces turnover rates and the cost of hiring. This area is showing signs of weakening. According to the December 2024 report by the Pew Research Center, 37% of workers surveyed said they were extremely or very satisfied with opportunities for training or learning new skills, down from 44% in February 2023. And 26% said they were highly satisfied with promotion opportunities, down from 33% the prior year.
Redeploying talent may just get your company into the winner's circle!
3. Don't weather the storm; harness it.
There are countless examples—big and small—of businesses pivoting during Covid to survive. Remember how local restaurants and liquor stores began delivering premade cocktails and meal kits.
In fact, according to a report issued by the U.S. Census Bureau last year, some 28% of companies impacted by Covid either canceled, postponed or decreased capital expenditures, and just 2.8% increased them.
Then there are businesses that looked at the landscape and decided to become the new alpha of their industry. One example is a company chaired by my colleague. For 30 years, this company provided mostly in-person testing for all manner of academic tests, such as the LSAT and GRE, as well as professional certifications. When Covid hit, they transitioned to using safe and secure technology to provide online testing and recently received patent approval for AI to support their offerings.
Conclusion
It's normal to bunker down amid volatility, and perhaps, it's even safe. In the longer term, it's more difficult to catch up to those who choose to innovate instead of avoiding it.
One final thought: Times of risk may well be the least risky time for bold moves. When everything's already in tumult, your environment and people are already primed for change. Why not make it?
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