Leaders of companies in every industry are asking themselves how to manage near- and long-term risks to their businesses from the COVID-19 pandemic. And should their business strategies fundamentally change as a result of the crisis?

The challenge is particularly acute in the government services industry, as our customers face new, urgent priorities that may alter or crowd out their previous long-term planning.

In the near term, companies in our market are working rapidly to react and adapt to the “new normal” by helping their customers continue to execute their missions, taking care of employees’ health and safety, enabling their employees to work remotely if they can or take leave, supporting the communities where employees live and work, solving problems with their supply chain partners, and assessing the measurable financial damage. As with any crisis, companies are seeking mechanisms to create order out of chaos, one day at a time.

Build scenarios

Looking further out requires evaluation of a variety of scenarios of possible future worlds and modeling the behavior of our government customers. Responsible planning requires that these scenarios be based on different sets of assumptions, from the likely to the remote.

For example, one scenario might describe the characteristics of a world where the first wave of infection that we are currently dealing with is followed by several others before a vaccine is developed. This would likely result in government spending to prop up the economy that far outstrips tax revenues. There are limits placed by markets on that kind of deficit spending. Our defense, civilian, and intelligence customers’ priorities will shift as their budgets eventually get squeezed. By understanding these potential challenges, you can make logical predictions about what they will do less of, more of, or stop doing altogether, based on how long the crisis lasts.

On the other hand, government customers’ attitudes and priorities will look different in a world where we are successful in developing palliative care regimens or a vaccine within a year. Agencies may snap back to a more “normal” future world that's more like the status quo before the pandemic. Or, while the crisis has our full attention, our government may seize the opportunity to put in place more fundamental and lasting reforms to address future threats, including the next pandemic.

For strategy purposes, we need to ask how this range of future worlds and associated changes in government customers' buying behaviors alters our competitive positions in our markets. If these scenarios point to new enduring customer priorities, then we should skate toward where the puck is going.

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