Small businesses are still at 'high risk' as COVID-19 cases spike: BCG CEO

Boston Consulting Group CEO Rich Lesser joins the On the Move panel to discuss how to protect those most vulnerable to COVID-19, and what to expect from the latest round of stimulus.

Video Transcript

ADAM SHAPIRO: What's the business community, do you think, paying attention to, Rich?

RICH LESSER: The business community is focused on how do we get control of the virus. The data's actually become quite clear that the things that drive behavior that can help the economy are not the state of how much lockdown there is but the state of how much virus there is. And you actually see a very-- almost no correlation between lockdowns and economic activity and a very high correlation between the virus activity-- the infection rate-- and economic activity, which comes back to the same point. It's not about do we try to keep people safe and not overwhelm our health care system or restart the economy. It's about keeping people safe and not overwhelming the health care system in order to restart the economy. And I think there's been a lot of attention on what can we do to get more control of this virus and not let it be as out of control as it's been in the recent past.

JULIE HYMAN: So, Rich, it's Julie here. It's good to see you.

So talk to me about the role of business versus the role of government here, right, because a business can re-open and take all the precautions it wants, but if the broader government is not mandating masks, for example, or not cracking down on big gatherings-- I know there were a couple in New York over the weekend where authorities clamped down-- then what good is the business part of it if people are still going to be having those kinds of interactions?

RICH LESSER: I totally agree with you. Look, businesses' first responsibility is to keep its own people safe. And I'm in so many discussions with CEOs around the country and around the world where job one is, what do you do inside your own facilities to keep your workforce protected.

But business also recognizes that absent broader government actions and absent rallying people to take the right decisions to keep themselves safe, you can only do so much in your own facilities as it relates to the broader community. Which is why the business roundtable has spoken up. The Chamber of Commerce has spoken up. I think people are realizing you have to have a voice to try to influence broader societal moves to take the actions to protect us all and protect the vulnerable.

ADAM SHAPIRO: Rich, there's been this letter from this [AUDIO OUT] of larger companies calling on the government for some kind of-- for lack of a better term-- a small business Marshall Plan. Do we have the wherewithal in the United States to, one, fund it? And, two, is it the appropriate action to help our small business owners out of trouble? Because they do employ so many people.

RICH LESSER: I think, because we've been unsuccessful in getting control of the virus, the risk to small businesses that we hoped-- had we controlled things well by this time-- we'd start to feel lessen and we'd start to be in more position to see our small businesses open, many are still at high risk. So which specific-- what specific plans and policies I wouldn't presume to judge. But will we need more support for small businesses, along with unemployed, along with state and local governments? Unfortunately, I think we're very much in that position right now.

BRIAN CHEUNG: Rich, it's Brian Cheung here. What's been interesting to me is that beyond the decision from businesses-- small or large-- to reopen their doors to some of their employees, the secondary question after that is, how do you do testing? We've heard it's recommended that all these employers do their own testing, but we've heard about shortages for the tests themselves in some parts of the country, and then just the logistical problems of getting that through. We've seen that even with the major sports leagues trying to reopen.

What has been BCG's interaction with clients in terms of advising them on how to go about these types of tests and how to balance maybe making sure that there's enough resources-- even for outside of private industry-- so that we don't have a shortage of that?

RICH LESSER: Look, there will be some parts of some businesses that need to do their own testing, because they have really critical facilities or because they have workers in frontline situations that need support. But, in most cases, testing strategy should be community driven. It should be driven by governments that are focused on the most vulnerable populations, the most exposed populations, and the people that interact with those two groups. Health care workers, individuals living in multigenerational facilities, I mean, those are the kind of places we need to deploy testing.

And you're totally right. We've had supply shortages that have slowed down testing. We haven't necessarily been as aggressive as we might be in sort of pool testing strategies or other ways to make the most of what we've got. And in some cases, we just flat out don't have enough tests relative to the amount of the virus.

There's a lot of conversation often about testing as a ratio to the population. But, actually, if you think about it, that's not the real metric to look at. The real metric is testing capacity relative to the numbers of infections. And in an ideal world, it should be 20 to 1. In an acceptable world, it should be more than 10 to 1.

And we see, in many parts of the country, that we're well below those numbers. And when you get below them, it means, even if you're finding many of the people have the virus, you're missing others. And even if you're finding people have the virus, you're not able to do the testing around those populations to spot those who've been exposed.

So I'm not minimizing the role of business of testing its own workforce. And in some situations, it will be appropriate. But mostly what business needs to be doing is engaging with governments and figuring out how we can contribute ideas and capabilities and resources to accelerate the progress to be able to do more testing and smarter testing strategies against the people who need it most.

You know, there's data-- I'm sure you've read-- I mean, people of color have been disproportionately affected by the virus. And the fatality rates are higher. The hospitalization rates are higher. There was this initial hypothesis it's because, well, somehow, they're more health-vulnerable. But that's not really what's going on. What's going on is that people of color are more likely to be exposed in the nature of work that they're doing and are being undertested relative to the infection rates. And those two factors, more than any others, are explaining the disparities that we're seeing and what we need to do to try to get our hands around this and start to bring those infection rates down, along with the general population.

ADAM SHAPIRO: Rich, that point you've just made is a perfect segue to our next guest. So thank you so much.