Business

3 scenarios for the next 18 to 36 months that you can plan in your company

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This story originally appeared in the World Economic Forum

3 scenarios for the next 18 to 36 months that you can plan in your company
3 scenarios for the next 18 to 36 months that you can plan in your company

By Peter Schwartz, Futurist and Senior Vice-President, Strategic Planning, Salesforce

Uncertainty is my resource. For nearly 50 years, and most recently as Head of Strategic Planning at Salesforce, I’ve studied how the future could develop and identified critical areas of uncertainty to help companies and government leaders overcome risks and make better decisions. In all this time, I have never seen such uncertainty resulting from the COVID 19 pandemic.

The unknowns are great for companies that want to stabilize their business activities and communities and restore growth and resilience. Safe reopening involves big questions that affect public health, the economy, and society: How long will our double health and economic crisis last? When can we go to work from a crisis? What will the next normal look like and how can we recognize the signs of change early enough to act quickly at the right time?

Salesforce works hard to use its products and know-how to overcome these uncertainties. For example, we recently created Work.com, which includes new technology solutions such as contact tracking and other resources to help businesses and leaders around the world safely reopen, retrain, and respond efficiently according to COVID-19.

In difficult times, futurists often use a powerful tool: scenario planning. With a team of experts from various industries and regions in Salesforce and beyond, we have created three general-purpose scenarios for the next 18 to 36 months that companies can use to plan their crisis response journey.

Planning the crisis in three phases

In a first step, we analyze the global dimensions of the crisis in terms of public, economic and sociopolitical health. The situation is different for different nations and regions. However, the moment and the way a region or country attains normality generally depends on how the virus and the economy behave in that place and how people react as a society.

Next we take these dimensions and follow their development through three different phases. For example, almost all countries first experienced a phase of loss of control in which the virus appeared and surprised everyone. Some places like Taiwan responded quickly, while others like North Korea and Tajikistan took much longer to recognize the need for anti-virus measures.

Almost all countries have switched to a more structured crisis response mode to control the growth of the virus through measures such as containment, social distance, border closure and contact tracking. In many places, this second “hammer” phase, to borrow a sentence from Thomas Pueyo’s influential article, was quite successful: Take New Zealand along with Vietnam and Hong Kong as an example. Elsewhere, like Yemen, there may be a long way to go.

Critical uncertainties that define the next normal

More recently, a third phase of “reopening” has taken shape as countries try to safely end the restriction, stabilize economies and accelerate growth. In our model, which in turn follows Pueyo, we refer to this phase as “dance” because this will likely force us to treat the disease quickly, open it again and then possibly close it to keep the infections under control. We already see big differences in some places that they want to reopen. In Great Britain, for example, together with some US states, the infection curves still have to shrink. In other places where the virus has been suppressed, there is still a risk that it will recur.

This third phase will form the next normal. To understand the scenario we could face, we are committed to identifying seven critical uncertainties that have occurred with the virus. For example:

● What level of topicality and effectiveness will the suppression have?

● Will healthcare capacity meet and exceed peak demand?

● How will we work again in each country and between countries?

● How quickly and comprehensively will the economy recover?

● What are the economic costs of childbirth and to what extent can we reduce them?

Three ways into the future

The interplay of these uncertainties fundamentally determines the moment and the way in which a country achieves the next normal. When analyzing this interaction, there are three different paths to the future, each representing a crisis of different depth and duration.

Image: Salesforce

1. The most optimistic scenario assumes that things usually work: people maintain social distance, the virus does not return after a few months, immunity remains, and economic policy is effective. The reopening begins in midsummer, so a path to the next normal can begin in spring 2021, and a vaccine will come with which the economy can grow again.

2. In the second scenario, the virus persists and the reappearance of a second wave in winter requires further narrowing, which leads to a much more severe economic recession. A vaccine will be available in mid-2021, showing the reopening and steps to normal.

3. In the most pessimistic scenario, the virus reappears in a second giant wave that is as large as that we have seen in the most affected areas so far. The longer detention required leads to a long and intense recession with profound social effects. Without an available vaccine there is no new normal. Instead, a “normality with COVID-19” arises with continuous waves of the virus, ongoing economic uncertainty and deep social unrest.

Business leaders can use the axes we have developed in our scenario planning materials to overlap the details of local dynamics and policies in response to each of our seven critical uncertainties and to help them think about how the next normal will be can unfold. in their special situations.

Design a better future

Leaning towards uncertainty is one way to prepare for the next normal. We have the unique opportunity to learn from this pandemic and consciously shape a better future.

During the crisis, we already started to reinvent the way we work, learn, buy, make contacts, manage our healthcare systems, and even govern through innovative technologies that enable us to work remotely. What else can we do from a distance so that we don’t have to travel to the other side of the world for a one-hour meeting? How can we rethink our supply chains to make them more resilient to disruptions like this pandemic? There are so many interesting questions to examine.

However, to make such changes, companies need a foundation that enables digital transformation. You will also need more openness to deal with ongoing uncertainty and change. Those who experience this transformation and who are ready to think creatively and adapt will be in a stronger position to succeed in the next normal.

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