We must, I’m told, plan for the future, as if some other period of time might seem more worth planning for.
Right now, the future most business managers are planning for is next week, or, for the more visionary, next month. This is as it should be. Many businesses are in the metaphorical emergency room, where stopping the arterial bleeding gets priority over curing a long-term illness like cancer.
And yet …
The decisions executives and managers make today should be informed by their view of what’s in store once the immediate crisis has passed. To that end, and because I really wanted to write science fiction, and because there’s still only one Subject worth writing about, here are some thoughts about the post-crisis future and how it should influence the decisions business leaders are making here in the self-isolated present.
In round numbers, when SARS-CoV-2 eventually recedes from view (in case you haven’t kept track, SARS-CoV-2 is the virus, COVID-19 is the disease it causes, and coronavirus is the family of viruses SARS-CoV-2 belongs to), I see three major competing What Happens Next scenarios. Call them Survivalism, Normalism, and Transformationism.
One at a time:
Survivalists are going to pivot from a dystopian future in which nuclear war has wiped out much of our societal infrastructure and norms to the same dystopian future only with a pandemic as the cause. Self-reliance (including a strong immune system) will matter more, social adroitness will matter less; the adjective of choice will be “grim”; and living off the grid will be less isolating than expected because those choosing the survivalist lifestyle will experience an influx of new, like-minded neighbors.
Business survivalism puts us in Great Depression territory, where dramatically reduced commerce leads to greatly reduced personal income, wealth, and spending, which leads to a vicious cycle of even more dramatically reduced commerce.
Survivalist business leaders expect a slow, protracted recovery. They should reduce their workforce to the numbers needed to supply a much smaller marketplace.
Their strategies will be pseudo-Maslowist, figuring most spending will be for needs, with wants and desires a distant second and third, too miniscule to be worth catering to. Probably they’re already adjusting their products and services catalog to fit.
For Normalists the current pandemic is a temporary disruption. They need strategies to get through the next few months, not to adapt to changes to societal fundamentals.
And while nobody has ever deliberately turned off the economics motor before, normalists are confident we’ll all figure out how to re-start it once we can stop dealing with the threat of contagion.
Business normalists should be thinking about the best ways to ride things out so they can ramp up quickly once the recovery starts. This means furloughing employees rather than laying them off, converting others from full-time to part-time status, renegotiating services contracts and licenses, optimizing raw-materials inventories based on a post-recovery demand forecast, and figuring out how to quiesce production facilities now so they can be re-started with as little delay as possible then.
Normalists should also include a chapter 11 contingency in their plans. (Expectation: massive use of the chapter 11 mechanism will help the economy recover by sharing out pandemic-induced economic damage, not that I have any serious expertise in such matters.)
Transformationists? They figure the pandemic will accelerate trends we were going to have to come to grips with anyway, the most important of which is the decreasing need to employ human beings to do all of the work that has to get done. The second most important is that consumers, and especially younger consumers, want more experiences and less stuff. That’s fine if you’re in the entertainment business or are a tourism destination, although the future of cruise lines is debatable.
But even if you’re Disney you rely on retail revenue along with the theme park entry fee.
Those who figure the past prefigures the future will explain that all previous waves of technology have created more jobs than they destroyed. Although the transitions were painful, the new jobs did appear.
But increasingly capable machine learning and robotics mean fewer and fewer humans will be needed to create the stuff retail outlets will be selling less of.
Transformationist business leaders should be doubling down right now on the investments they’ve already been making in artificial intelligence and robotics. They should also, right now, start to re-conceptualize their businesses in terms of how they fit into a less-stuff/more experiences consumer marketplace.
Meanwhile, transformationist savants will start thinking about how to configure an economy so that people don’t need to work to make their lives work.
And not only an economy, but a society and culture, too.