Accounting For Recovery: The Art Of Navigating A Pandemic

Bears survive winter without water or food. Unlike humans, when deprived of sustenance bears’ body burns only fat and that only sparingly. The skeletal muscles are spared. So when spring returns, leaner but with muscles intact, bears are all prepped to forage for food. Companies could take a leaf from the book on bear metabolism. During a pandemic, companies should only consume their cash reserves and that only sparingly. To the greatest extent possible, companies should retain their workforce and keep their supply chain intact. Even in the darkest hour of a pandemic companies nonetheless must have an eye on how they can resume normal business activities when eventually the economy recovers. That is the essence of accounting for recovery. This article demonstrates how the theory of growth accounting, familiar to economists, is well suited for the purpose of navigating a company through a pandemic towards recovery.