By Konstantinos Yazitzoglou, IDP-C and IDN Greece Ambassador
“In the midst of every crisis, lies great opportunity” –
We are undoubtedly experiencing one of the greatest crises in modern history. A crisis unlike any other and therefore with unknown consequences. “Experts” try to assess its effects on our lives and predict the new reality to come. If, like me, you are sceptical about futurism, the current situation certainly helps reinforce this view.
Most of us agree that, at some point, there will be “a day after”. Whether it will be a day with a vaccine or efficient medications, with a lot of social distancing or none, with fear or not, it is difficult to say. We understand there will be a recession, but we hope that it will be controlled and reversible. We recognize that some companies, or even whole sectors will cease to exist, but we hope that ours will survive. Some of us even dare to foresee major changes in their personal and business life, but consider them manageable.
Economists often refer to the expression “ostrich effect”. In simple terms it means that when faced with an unmanageable crisis, people tend to close their eyes in an attempt to ignore the problem they’re faced with, hoping that at some point, when they open them again, the problems will be gone, and everything will go back to being the same. As the philosopher Ayn RAND characteristically states, “You can ignore reality. But you cannot ignore the consequences of ignoring reality.”
“You can ignore reality. But you cannot ignore the consequences of ignoring reality” – Ayn Rand
It is true that during a massive storm common sense dictates we should do our best to minimize our exposure to any potential damage. At this point in the COVID crisis, our organizations’ ability to react is limited to trying to “preserve the status quo”, which is surviving the storm with the least possible losses. Size adjustments, changes in production models, access to markets or products that until yesterday were not a priority are just some of the methods used. While there are various good practices and lessons we can use from past crises, there is clearly no “recipe for success”.
The upcoming economic recession is a given and all we are talking about is its magnitude – how much and for how long. Central Banks and Governments are already employing various financial measures to control the situation, but the degree of their success depends entirely on the duration and intensity of the pandemic.
The crucial question that business leaders need to answer now, is what the post-crisis era will look like. Even if we manage to overcome the health crisis, everyone agrees that some things will never be the same again. For instance, it is certain that for a period of time public spending in health will increase significantly. This, in turn, will deprive other sectors from funding. There are already discussions about “deglobalisation” so that, should we be faced with another pandemic in the future, we can have a “local” supply of markets. Such initiatives may change the rules of the game in the utilisation of raw materials and in logistics.
Business travel needs will be reassessed, with potential implications for fuel consumption, transportation, and infrastructure investment. The ability to do remotely things that until yesterday required our physical presence in a certain location, will reduce the need for such locations (offices, shops, etc.). On the other hand, working from home will require investment in both real estate and equipment. Even Wi-Fi and cellular networks will have to be significantly strengthened in residential areas, to accommodate the increase in demand generated by the new professional grade use made.
The term disruption was coined twenty years ago, to describe a state of rapid and unexpected change. The main characteristic of disruption is that no extrapolation of data from the past can give valid predictions of the future. COVID is a disruption of the disruption. Long before the current crisis, the academic community conducted dozens of case studies of large corporations (for example KODAK), which stubbornly refused to see the speed and intensity of forthcoming changes, leading to their disappearance. The current pandemic is simply accelerating this process, on the one hand because developments occur even faster and on the other hand because many of us, in complete denial of reality, will continue to “dream” of returning to a pre-pandemic state of things.
Having said that, we must not ignore that the same changes which led “dinosaurs” to their deaths have fuelled a series of greater or lesser successes for several agile organisations. The speed of adaptation to the new reality is nowadays the strongest competitive advantage for an organization. When the instinct of survival meets creativity, the result is always positive. Humanity will continue to exist even after COVID, the world GDP always finds a way to return to a growth trajectory after a crisis, developments in technology will be even faster and perhaps more focused.
“Do not think what you want from the future. Ask yourself what the future needs from you.” – Jeffrey Rogers
Clearly, for many of us, the loss of the “status quo” and the collapse of the “comfort zone” that we had painstakingly built on, are facts that we find difficult to manage. Wishing that it will all go away may be comforting in the short term, but it will not get us very far. Instead of being ostriches, let us follow the advice of Jeffrey ROGERS (Singularity University): “Do not think what you want from the future. Ask yourself what the future needs from you. ”