I. Covid-19: From Crisis to Chaos
Crisis a critical or dangerous time when a solution is needed – quickly.
Chaos Situation degrades rapidly into uncontrolled and debilitating outcomes. Any prediction of the range of negative outcomes is nearly impossible to be determined scientifically.
Today the Covid-19 situation is fast turning into a chaos unless we stop adding to it.
Volatility Environments that are marked by rapid changes and sharp ups and downs. Teams either don’t have resources to control the state or don’t have enough time to elaborately plan and respond to such changes. The more volatile the environment, the greater is the need for on ground rapid-action response. However, boundary operating conditions and control limits are critical, e.g. for an equities trader, to avoid any rogue, runaway outcomes.
Space measures in dealing with chaos If space could be broken into own, known and unknown territories, then every mass scale disruption has always surfaced from the unknown - stealthily first, till it engulfs completely. The only credible response is to first manoeuvre the fight into a known territory and then to attack and decimate the adversary. Using defence and fighting the battle in an unknown territory is staring at a sure defeat.
II. Controlling the Chaos
Will we all ‘fall down’?
A resounding no! However, the fight will need to be united and disciplined. Let us review this by tracing another similar and deadly series of events.
One of the biggest killers of human life was the bubonic plague or the ‘black death’ that killed an estimated 75 to 200 million people in Eurasia in just the first eight years after reaching the Crimean shores in 1343 from China. It took over 550 years for the bacterium to be isolated and discover the cure. The Ebola virus had its worst outbreak between 2013 and 2016 but by December 2016, a vaccine had been developed and the disease was controlled. In June 2009, the World Health Organization declared Swine Flu or H1N1 as pandemic; in the August of 2010, it declared the disease as seasonal and under control. The speed of response has exponentially increased over time.
The coronavirus was detected first in China in November-December of 2019 and was declared as a pandemic in March 2020. Pragmatically, the likelihood of finding a complete treatment is yet a few months away. This chaos needs to be urgently dealt with by
1. Forcing the battle from the Unknown to the Known
Nations are either imposing a sustained lockdown or strict social distancing to control the virus. Intuitively this equates to a strategy of attack with the battle being forced out into known territory from unknown. By imposing social-distancing or lockdown for two-to-three weeks, the governments are trying to restrict transmission of the virus. Since people are contained at homes, at the end of quarantine period all afflicted people would be identifiable and consequently treated with greater confidence of cure.
Not every citizen wants to adhere to these self-imposed restrictions. Those who do, are aligned with the objective of this global campaign – critical during volatile environments - of saving the human race and global economy, but those who don’t, can be singular catalysts for precipitous downfall.
The world economy is about 85 Trillion USD and each day of lockdown will cause a significant contraction in the economy. While Italy, Spain, the US, and the UK are paying the price of ‘ignoring the unknown’ it is yet not known whether India, South Korea and Japan will come out of the situation with minimum damage.
Since the price of standing still for any economy will be very high, the more it protracts, the more ammunition will the governments need in fighting the disease and giving bailout packages to the industry. Thus, the key is to keep this uncertain period as short as possible, like what a small town in Italy, Vo, has achieved by isolation and increased testing, despite the rest of the country facing heart-wrenching conditions.
2. Increasing the neutralization capacity to contain the disruption
This will mean two key actions, for both formal and informal players joining this crusade.
Rapid innovations Every country is engaged intensely in finding a cure for corona. India has now a testing-kit at USD 15 a piece. The US has found how ventilators can be shared amongst patients. Engineers at the UK have developed a breathing device that can be used with patients outside of the ICUs. Many countries (hearsay being Israel is leading) have likely found the vaccine and are testing on humans now, bypassing the animal testing. The 3D printers will be driven to their extremes to test their promised capabilities. Extraordinary times, extraordinary measures.
Attitudinal economics or community collaboration takes place when organisations and people give away their competitive knowledge in a bid to avoid unnecessary duplication, waste of essential resources or when community at large needs it. Countries, NGOs and research labs are freely collaborating in exchange of critical data that can help in battling the virus. Scores of apps are being informally developed that can help track contact history for the purposes of quicker identification of the likely infected by community spread. Remote hackathons are being run to find direct or indirect solutions.
III. The ‘Covid19’ battle will continue long after the virus is defeated: Preparing for the aftermath
Economists refuse to second guess whether the recovery will follow a V (quick rebound), U (slow turnaround) or an L (a recession) curve. Everyone hopes for a V curve – which means just a short dip; however, longer the encirclement by the virus, the more difficult will it be for the economy to come out of it unscathed. Any evolution can be viewed as a continuous stream of innovations across multiple time frames, punctuated by distinctive boundaries created by transformative technologies, disruptive products and new models as a response to a crisis or new needs. These boundaries are sign-posts of ‘competition changers or a period change.’ We are at such a gate. The new tomorrow will be different. Some of the likely changes that will get triggered are:
1. Transformations will become the new way of life: In simple terms, a Transformation is rebirth (or reinvention) after death (or termination). Death, in a way, is the mother of transformation.
The lead interface will be digital: The organisation’s interface with its employees and stakeholders will change. So will educational institutes, healthcare consultations, public interface, etc. will change in its way of interactions. It will become more digital due to pronounced social distancing directives. People will save time, money and protect mother earth.
Trust will be the new currency: Internal organizational processes based on outrageous controls (read: ‘mistrust’) will give way to processes based on trust. A new era of human relations will surface. Of course, wherever needed, technology will be deployed for close monitoring.
Slack will be out and focus will be on profitability: Cash-guzzling start-ups running on ‘OPM’ (other peoples’ money) will cripple as the cash supply will be severely constricted. Hence they will need to learn to become profitable. They will also reinvent themselves as has been seen during this crises. For example, the e-commerce companies with their last mile logistics have been the saviours and even during rigid lockdowns have been at the forefront delivering essentials to consumers. While they may or may not increase their service fees now, but post corona pandemic, even if they do so to better their results, people will graciously accept their ask.
The world will review ‘Outsourcing’: China as a product hub for the world may take a beating. With Covid-19 first attacking the Chinese territories, forcing them to lockout, and subsequently, spreading to other countries, who are now following the same drill, the impact on the supply-chain contraction has severely multiplied. Companies will reduce repetition of such risk and a degree of planned insourcing will be a definite future strategy. Such an impact may not just be limited to China alone.
Localization, with all its side effects, will get an impetus: Governments are also likely to give impetus to their ailing industries with bouts of increased import duties to push local products. The globalized world will lean more towards right and a higher degree of localization. This may increase prices and hence inflation.
2. And there will be others that shall pass away…
Organizations and leaders that adopted risky behaviours and decisions prior to the virus visiting us, will see those decisions accentuate into painful impact.
SMEs and financially weaker organisations will need urgent help both by government and larger organizations in the supply chain.
Primary Industries, especially agriculture, will need to be supported during the impending harvest season otherwise the social cost for any government will be very high.
Secondary Industries will likely be ramping to meet shortages post the restrictions to serve the demand of the consumers.
Services organisations’ whose primary aim is to make secondary sector and industries become more efficient, will likely be needed even more in the near term.
Local competition will heave a sigh of relief against exports from China, as border lockdown in many countries will help them to yield better prices.
Organizations will freeze, bonuses, increments and discretionary spends for the year.
Taxes will most likely increase.
Are these really unprecedented times? Either ways, this is a reboot button. But what will each one of us reboot to?
Is corona a black swan event? If viewed in the context of the past 100 years of time scale, then it surely is. But when viewed over a period of thousand years, then it probably is yet another evolutionary cycle on the earth. Another repeat of the combination of a pandemic that snuffs out many lives, coupled with a war or a critical situation around the same time, and governments forced to spend a lot of money resulting into severe contraction in economy. How precipitously close do we get to that point will depend upon how disciplined we are in containing the virus.
A lot of experts today have seemingly differing views. One of my personal heroes and a business guru, says ‘these are unprecedented times’ for we witness acts of kindness from unknown people, a global mobilization of governments in the common fight against the virus, reduction of strife in general and ordinary citizen being able to do so much more under such massive constraints; a new order seems to be emerging. Another larger-than-life guru has a seemingly differing view - ‘these are not unprecedented times’ – whenever there has been a marked change, only the species who reinvented, adapted and transformed themselves to the new environment survived. Remember, transformation is rebirth after death; this is the law of nature.
It is just the period of study that is causing the difference. I call this as ‘time-think’, which is caused due to inherent inconsistency that creeps in when studying reasons for success or failure within a specific time period. As the periods change, sometimes subtly and sometimes more overtly, the needs change and so do the response to these changing needs. But both views will reach similar conclusions.
The universe, in general, is in a state of perpetually increasing entropy; since heat increases disorder, the universe is also in a state of perpetually increasing disorder. The heroes of yesterday, whether countries, organizations or people either perish and give way to a new emerging hero, or, transform themselves. Evolution is a strong weapon to blunt entropy but evolution follows ‘survival of the fittest’. Whenever friction between man and nature becomes alarmingly high, entropy usually jumps a thousand-fold; the degree of evolution then, needed to survive, calls for huge transformations. Corona virus has injected the same variability, increasing the overall entropy of the universe. This is just not a test of mettle for businesses or healthcare alone; it is a test of mettle for every country, every organization, every community and every person on this earth. The reboot will occur without any choice but it is up to each one of us to drive what the reboot transforms us into. Regardless, it is a once-in-a-lifetime opportunity that very few generations would have ever seen or will see.
Based on the Space-Time-Action Strategy Triangle from the book,
Achieving Successful Business Outcomes: Driving Driving High Performance & Effective Transformations in a Continuously Evolving Business Environment by Alok K Sinha, Taylor&Francis, NY & London, March 2020. With additional inputs from Mrinmoy Chakraborty, Head IoT, SOLiD, South Korea and Sangram Surve, ThinkWhyNot, India.