Who’d have thought it?
In December and January, I was writing about what we might face this year. The world looked very different than it does this morning.
As I write the London market is off 8%, the Oil Price has dived to $35/BBl and Energy stocks are off 20-30%.
The world seemed a rosy place in 2013. Since 2014 we’ve experienced a series of shocks – 2014 Oil Price crash, Brexit, Trump, refugee crisis, Syrian wars, trade wars, climate strikes, energy transition, Covid-19 and now Saudi & Russia are playing poker. None of this was predicted widely.
As we head deeper into the 4th Industrial revolution we will see more “externalities” that will further disrupt our best laid plans.
What about Covid-19?
Maybe Covid-19 isn’t “THE ONE” maybe it is. But it has certainly exposed how susceptible our current end-of-3rd Industrial Age, free-trade, globalised and business-case-obsessed economy is.
We have not priced risk correctly and we have not built in contingency. Workers on zero hours contracts can’t self-isolate, just-in-time imports from China are not working. To address this will require changes in policy and macro-rules to make a response possible in the face of short-run economic competitive pressure.
For more information on Covid-19 McKinsey has an excellent primer here [link]
Will business need to change
It seems clear that changed business practices will be needed if we are to become more resilient in an era where travel can be minimised, whole communities quarantined and trade in physical products localised.
Perhaps we will quickly switch to business that makes more use of information-rich scenarios (video conferencing, designs for 3D printers, remote controlled operations)?
We also now have another example of what can happen when information travels wider and quicker than knowledge. In this case panic buying of toilet roll. As we become more information-reactive in our business processes we need to bear this in mind.
Innovation is the answer, now what’s the question?
The only strategy I can see that will help is to learn to innovate quickly and be ready to react with purpose and knowledge as the future reveals itself to us.
It will never be this slow again!