Coronavirus Day Fifteen 😷

How would you evaluate the leadership demonstrated by our elected officials?  Who has stood out as outstanding and who has proven inept thus far?

Leadership throughout this pandemic is paramount to our country successfully navigating our way through this disaster. Overall, considering the unprecedented nature of this scenario, most leaders have contended mightily up to this point. President Trump continues to display flashes of true leadership, while occasionally reverting back to pettiness of criticism he doesn’t agree with. Locally, Governor Andrew Cuomo has displayed a deep understanding of process and the need to make decisions quickly based on imperfect information.  Governor Phil Murphy of New Jersey has also followed similar steps, taking cues from the New York City containment successes and failures. Recognizing the huge potential downside of making incorrect decisions both Governors have taken drastic measures, such as quarantining residents and closing non-essential businesses. While these decisions may not continue to be popular, strain the economy, and worry residents, they do appear imperative thus far. 

In recent news conferences President Trump has discussed the idea of re-opening the United States economy by Easter, however he has also spoken at length about having to force General Motors to produce large numbers of ventilators using the Defense Production Act of 1950. Citing necessary quantities of 100,000 or more ventilators over a 100 day period one cannot help but question if it is possible to both kick-start the economy and manage the nation’s health risks at the same time.  

Over the course of the week the Senate, the House of Representatives, and the President were able to sign the Coronavirus Aid, Relief, and Security (CARES) Act. As an omnibill the legislation is laced with pork, however it does appear to provide a path forward for a large swath of Americans.  The Payroll Protection Program (PPP) is of special interest to small business owners and small business employees alike as it provides a potential method for many small firms (under 500 employees per location) to maintain employment for a period of eight weeks with loans forgiven at a future date (after one year deferment)  if used in accordance with the policies outlined. 

There are without a doubt, still many questions to be answered. How fast will small business owners and entrepreneurs actually be able to gain access to these funds? With the previous bill, the Families First Coronavirus Response Act (FFCRA), set to take effect April 1, 2020, mandating a two week paid leave for employees who have been, “Subject to quarantine pursuant to Federal, State, or local government order or advice of a healthcare provider.”  This begs the question, how will this get paid for? Where will these funds come from? Using New Jersey as an example, Governor Murphy has closed all non-essential businesses under a state-wide quarantine. This would assume these businesses are now responsible to pay all of their employees 2 weeks of paid leave, all at once, after having revenues obliterated for the past two weeks prior? The impact of this virus is no fault of any one person, but why does the government assume such people have the means or wherewithal to comply with this order? The situation is made worse as the stock market continues its bear market slide, eliminating any potential gains investors may have access to. While exemptions for employers of firms under 50 people do exist, this also raises a question of ethics and leadership that entrepreneurs will have to answer for themselves.

As leaders, how do we, entrepreneurs and business owners, handle this situation? Do we further demolish cash reserves (if not already gone), attempt to secure a grant/loan as explained within the PPP provision of the CARES act, or do we apply for an exemption as provided via the Department of Labor secretary exemption as listed in the FFCRA?  All of these options seem like choosing the best of a bad lot. This is further complicated by the Federal unemployment benefit supplement authorized via the CARES act, potentially allowing unemployed people the ability to collect over 100% of their net pay for a period of 4 months. Although several Senators lobbied for a provision to correct this, the bill has passed in its original form allowing individuals to potentially collect more money while on unemployment than they could while employed. 

As Doris Kearns Goodwin titled her book, this without question, Leadership in Turbulent Times. As leaders we face many hard choices. Likely unable to make everyone happy, likely to pit self-held ethical values against each other, and likely to discover multiple flaws within our own reasoning we need to spend serious, thoughtful time before making decisions. Think of these situations critically, do not hesitate to seek guidance and counsel, and where you can, work diligently to apply the rules of logic and game theory to your thought processes. Most of us may never have realized the benefit of these college courses until now.

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