Matt Davis, CEO of COhatch, prides himself on having lots of options in his business plan.
“But, needless to say, pandemic, immediate closure, wasn't one of them,” he says.
When the pandemic hit, he says initially, the company was trying to determine how it would navigate the consequences of the market disruption in the short term. But ultimately, it decided to keep moving forward with its 2020 plan.
“It became pretty clear to us that this will impact how people work, where people work, how they utilize community to grow their businesses into what people need,” he says. “We thought almost ever situation would help our business. The future is just going to be tough to navigate through a changing consumer base.”
Davis spoke on the Smart Business Dealmakers Podcast about COhatch’s response to the pandemic and why long-term decisions shouldn’t be made in a crisis.
Davis says most of the deals the company had in progress — two in Cleveland, three in Cincinnati and three in Indianapolis — are still a go. It did pause some projects because Davis felt COhatch just didn’t have the bandwidth to do them, so it instead focused on executing really well on the other ones.
“But yeah, we got punched in the gut like everybody else,” Davis says. “We got our wind back and we made the decision to keep moving forward because we think we're going to be needed.”
He says shutting down the company wouldn’t have been simple. There are 2,000 other businesses inside of COhatch, which means there’s a greater obligation, he says. He says 30 to 40 some percent of its companies were essential — accountants, lawyers, loan officers, etc. So it stayed open.
Pause big decisions
Another shift he’s seeing in the market is the idea of dropping the office in favor of a work-from home model. To that, Davis offers a word of caution.
“My advice to all of our business owners is you don't make big long-term decisions when there’s chaos surrounding you,” he says. “But you're seeing it from a lot of companies right now.”
A crisis such as the pandemic is forcing people to do, or at least consider doing, things they might not have done before, which he says will create major changes in marketplaces. He suggests pausing big decisions to see how everything shakes out.
“It's easy to say, nationwide, 30 percent of my employees stay at home,” Davis says. “We’re going get rid of some offices.”
But business owners are making some assumptions.
“They’re using the ‘safety’ card to activate, this and then they’re using the ‘it makes good business sense’ card for commercial real estate,” he says. “But what they haven’t figured out is, ‘I expect X amount of work and X amount of productivity. How's this going to work productivity wise? Because if they're only 80 percent productive, you’re not saving any money. It's costing. I think safety rules everything, which is great. Short-term direct costs, that's an immediate thing. But now they need to find a way for their employees to have a great lifestyle and be productive. What does a good work-life balance really mean in this age? It just not as simple as shedding costs, go home.”