Blog post

What is next, and what we do about it.

By Mark P. McDonald | May 18, 2020 | 0 Comments

Who knows, but every executive is looking for an angle to get
in the right position for the recovery.  It
is too soon to speculate on when and how the economy will come back. There is
just too much uncertainty right now – May 2020. 
As evidence, business leaders unwilling to provide forward guidance.  Governments are unsure of how bad things will
be in the second quarter.

I respect the desire do to something to get more control
over the future.  But if your organization
is bandying about the word RESLIANCE, then you have to recognize that there are
sometimes when you have to float rather than swimming against the tide.  More on resilience in a latter post.

Ok, but what are the scenarios for the future.  Good question and without going into gory academic
detail, here are some suggestions.

  • Recovery is the dominant scenario among executive circles.  This makes sense as it’s the scenario that represents the least disruption from the past.  Recovery describes a return to prior levels of economic activity within a company’s strategic planning cycle, say 2020 to 2023.   When people talk about a “V”, “Nike-swoop” or “W” shape, they are talking about recovery.

A recovery scenario presumes a return to
economic growth under more or less previous assumptions.  While some trends will be accelerated, such
as cloud services, work from home, etc., the economy will return to similar
rules and work in similar ways.  This scenario
is the most desirable and the easiest to understand.  It’s the one that points to the virus being an
external force upsetting an otherwise strong economy.  It is also the scenario easiest to plan for
as few rules change.

  • Stabilization represents the primary alternative
    to recovery.  In this scenario,
    executives establish a new baseline from the bottom of the global recession. The
    world starts over when we hit bottom.  The
    question related to stabilization is where do we go from there?  A stabilization scenario is “L” or “U” shaped
    one.  The future after stabilization is
    less about returning to the past but moving toward a different future.

Once the economy stabilizes, the question
is where to do go from there?  

The world can return to the old rules at the
lower benchmark.  Think of it as the
world recovering from a global chapter 11 bankruptcy and reorganization.  2020 and 2021 basically go into the books to
be forgotten, no lessons learned.  This
is not working our way off the bottom – that is the recovery scenario.  No this is working our way forward as if the
past did not happen. A possibility that is likely but not desirable.  Redirection is a third alternative.  It involves stabilization but then it makes new rules reflecting the dynamics of a stabilized world. Those rules involve the society, economy and political systems organize themselves around different goals.  Environmental sustainability, social/government ownership, neo-nationalism are potential goals around redirecting human and economic activity.   Technology plays a supporting role from tracing people with the virus to acceleration of other forms of technology based social controls.

This is the utopian alternative with
everyone working from home, the environment recovering, greater social and
economic equity, etc.  All are laudable
goals, that people presume cannot be achieved in the other scenarios.  That is the risk of redirection, it presumes
that if only we can get the ‘right’ people making the right decisions then everything
will be all better.  Here is an example
from Simon Mair’s articles:

“… we must be careful to avoid authoritarianism. But done well, this (strong
state control) may be our best home against an extreme Covid-19 outbreak.  A strong state able to marshal the resources
to product the core functions of economy and society.”

Personally, I find this scenario the most
dangerous as it requires everything done well by the right people, particularly
in terms of handing over control to the state.

Three scenarios and a common theme

of these scenarios represents a different view on a central idea.  Each involves putting all of our problems
into the hands of authorities in a new roles and making new rules.  This is an innately human idea.  Whether that higher authority is the ‘state’
or the captains of industry, or the markets, the idea that someone else will
guide us forward seems to be our default. 

of the scenario or blend of different aspects of these scenarios, we cannot
leave our future up to others.  We are
all leaders, at least of our personal lives. 
We are all connected. We are all responsible.  We all have value and a role to play in that
future.  We lose resilience, agility and
agency when we forget that.

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