Life after the Time of Coronavirus Featured Signal of Change: SoC1154 April 2020

Author: Martin Schwirn (Send us feedback.)

The coronavirus has dominated the past couple months. The virus is spreading across countries and continents and has affected commerce, supply chains, and lives in general. Although near-term developments are yet unclear, some changes to economies and societies could become permanent. This Signal of Change is general in nature because developments that relate to the coronavirus and coronavirus disease 2019 (covid-19) are still ongoing.

Considering plausible futures reduces the number and impact of surprises.

Many observers have called the emergence and spread of the coronavirus a "black swan." In his 2007 book The Black Swan: The Impact of the Highly Improbable, Nassim Taleb uses the term black swan to refer specifically to an unpredictable large-magnitude event that has major consequences. Black swans have some similarities to the wild cards—low-probability, high-impact events—that find use in Scan workshops and scenario-planning projects. Many observers argue that the spread of the coronavirus is a very good example of an event that is unpredictable and is having a very unusual and unexpected effect on the global community. But neither point in this argument is accurate, and the distinction matters a great deal from decision-making and risk-management perspectives.

The occurrence of such a virulent virus was not only expectable but also predictable in the sense that the emergence of a virus-related health crisis should be unsurprising (details such as type, timing, and starting point of the outbreak clearly are beyond predictability). Obviously, two diseases reached high-profile-pandemic status during the twentieth century: the Spanish flu and HIV/AIDS. The Spanish flu killed from 50 million people to as many as 100 million people, and HIV/AIDS has killed more than 30 million people. In the first two decades of the twenty-first century, the world experienced (in alphabetical order) Ebola-virus disease, MERS (Middle East respiratory syndrome), SARS (severe acute respiratory syndrome), swine flu, and Zika-virus disease—just to name a few diseases that reached high-profile-outbreak status. And many media outlets have reported that Bill Gates had warned about a deadly pandemic repeatedly at events and conferences during the past decade. Indeed, the cofounder of Microsoft (Redmond, Washington) and the Bill & Melinda Gates Foundation (Seattle, Washington) has outlined crucial aspects of today's crisis. For example, at the 2017 Munich Security Conference (Munich Security Conference; Munich, Germany), Gates highlighted that "our worlds are more tightly linked than most people realize" (speech at the Munich Security Conference, Bill & Melinda Gates Foundation, 17 February 2017; online). And a little more than a year later in Boston, Massachusetts, at the Massachusetts Medical Society (Waltham, Massachusetts) and New England Journal of Medicine's annual Shattuck Lecture, Gates cautioned that "there is one area...where the world isn't making much progress, and that's pandemic preparedness" (speech at the Shattuck Lecture, Bill & Melinda Gates Foundation, 27 April 2018; online).

No, the emergence of the coronavirus and the covid-19 pandemic and its effects are not black swans, nor are they wild cards. These developments are simply events that will occur when billions of people around the world are in close contact with increasing frequency. These developments are not comparable to, for example, a meteor strike that takes out a continent or the development of a steam engine that changes every aspect of life in unforeseeable ways. The emergence of the coronavirus is similar to an industrial disaster or an earthquake: Such events happen. Such events can be small or large; however, they all relate to the way the world operates in general. Similarly, this pandemic will not be the last one, and the world had better learn lessons from this pandemic and, while moving through it, rethink risk-management practices and consider responses to future pandemics.

Contemplating some of the potential changes in commerce and policies that could occur in the coming years is worthwhile because these changes might alter the business environment in which companies operate. Many aspects of doing business might require rethinking. Andrew Winston—author of The Big Pivot: Radically Practical Strategies for a Hotter, Scarcer, and More Open World—recently discussed related issues. He highlights that the increasing nationalism of past years (as seen in 2012's SoC597 — Nationalization and Protectionism —an early discussion about such nationalism) is a hindrance to the development of not only countermeasures for pandemics but also solutions for climate change and resource depletion, because these problems are global in nature. Winston believes that the current global health crisis represents a type of situation that humanity will face with increasing frequency. Specific to the United States, he points to the need to consider implementing some sort of universal health care, because the covid-19 pandemic underscores that people who lack health care become society's weak link. Wilson also believes that companies will step up their community involvement and rethink their global supply chains.

In a recent article on the Journal of Futures Studies blog, futurist Sohail Inayatullah and consultant Peter Black take a comprehensive look at how the future might play out. On the basis of the analysis of hundreds of published documents, they develop four distinct future scenarios: a disaster scenario, a respite scenario, a progress scenario, and a gloom scenario. In the disaster scenario, ongoing pandemics and nationalist tendencies result in ongoing commercial uncertainty that negatively affects markets and results in an economic downturn—perhaps even a depression. In the respite scenario, the world community slows down the pandemic, and the coronavirus becomes simply another type of flu that the world has to deal with. In the progress scenario, major medical advances and collaboration in health care occur, and breakthroughs lead to a health-care environment that is much more resilient than is the health-care environment of today. In the gloom scenario, the virus does not have a devastating effect but lingers around. As a result, societies and economies cannot live up to their full potential, and a slow medical and commercial decline occurs in the coming years.

Such scenarios do not predict the future but describe plausible future worlds that enable decision makers to capture and manage uncertainties that relate to the coming years. Strategic Business Insights (SBI) has performed extensive scenario-planning work with dozens of companies across virtually all industries in efforts to help decision makers develop flexible and robust strategies. The future scenarios that Dr. Inayatullah and Black outline present reasonable worlds that SBI's scenario-planning efforts also could have revealed. The scenarios represent conceivable extreme outcomes, and the actual future will likely be somewhere in between or a mixture of them all to various degrees and within certain ranges. But decision makers had better look at these scenarios and consider what they would do in each of the futures the scenarios describe. Considering plausible futures reduces the number and impact of surprises, and having a strategic plan for each of these futures will help decision makers hit the ground running as the actual future unfolds.