Salesforce’s chief futures officer on how to win in the ‘Pandemic Era’
COVID-19 cases and deaths have been plunging around the world, but the pandemic’s after-effects are far from over. The ability of vaccinations to outpace variants is an open question. The geopolitical fallout is uncharted. The economic ripple effects remain unknown. What is clear is that we are entering a distinct historical period: the Pandemic Era, shaped by the impact of COVID. Like other defining events such as wars and economic crises, it will create new leaders and laggards in the marketplace.
In this time of uncertainty, my team and I, working with our partners at Accenture Research, have identified three possible scenarios for the Pandemic Era business environment. Each presents different strategic options for organizations that want to emerge as winners in the years ahead.
Plan for the ‘Uplift’
We believe most businesses should be preparing to invest for the Uplift scenario. Over the past 18 months, we have learned to survive and in some cases do remarkably well in the midst of a crisis. In the Uplift Scenario, sustained economic growth supported by decisive government action will continue to unfold. Countries will get better at containing outbreaks, and immunity from vaccinations and infections will scale quickly. Delta could well be the most troublesome variant we see. Geopolitical relations could hold steady and move toward higher levels of collaboration.
In this scenario, the most successful companies will be those that build financial resilience and organizational flexibility, as well as prioritize sustainability and equitable growth. We believe companies should bet on this outcome while preparing for inflationary pressure in the short term and taking steps to mitigate risk.
Recognize areas for a ‘Shakeout’
Although the chances of Uplift are high, three obstacles could get in the way: a more dangerous COVID-19 variant that outpaces vaccines; runaway inflation; or heightened geopolitical tensions. Any of these factors, or a combination, could erode confidence in government and produce a challenging economic environment. Inflation has already hit a 13-year high in the U.S., and September’s consumer-price index climbed 5.4% from a year ago. A prolonged inflationary period could lead to higher interest rates and a recession.
In the Shakeout scenario, we foresee a period of economic disruption that opens the way for the need and opportunity for a wave of creative destruction: It is a time that resembles the early 1980s. Vulnerable companies will be threatened, while those that can take big risks and innovate will come out on top. Eventually, global recovery will follow, perhaps in a world that is more tolerant of COVID risks.
Remain attentive to ‘Fault Lines’
A third possible future, Fault Lines, is that a more dangerous variant spurs countries to barricade themselves, solidifying borders and disrupting the flow of goods and data. As nations turn inward and frustration with the continuing pandemic grows, geopolitical tensions could arise, and the global economy could divide into multiple blocs. Political gridlock within countries could also intensify.
If this scenario unfolds, companies would need to adapt to a model of regional autonomy, focusing investments on scale and access to energy and electricity while utilizing a cautious mindset around spending.
‘No Regret’ strategies
While these scenarios spell markedly different futures, certain business strategies are likely to succeed in all cases.
For one, all companies should make it a priority to help end the pandemic by reducing the spread of COVID-19 and keeping employees and customers healthy.
Second, companies should promote growth strategies that incorporate green practices and embrace inclusion, equity, and diversity. This focus on sustainability is not only key to earning consumer trust and employee loyalty and commitment, but also an existential imperative in all three scenarios.
Companies can also feel confident about investing in digital transformation and innovation. The pandemic has heightened expectations among customers, who want personalized digital engagement across channels, and employees, who want the flexibility to work from anywhere.
Meanwhile, drawing on data insights to understand changes in customer behavior and employee behavior, predict supply chain disruptions, and identify market opportunities will be key to navigating the Pandemic Era. All businesses should take this opportunity to augment their digital capabilities.
Finally, companies should plan for flexibility. Organizations should restructure themselves into more fluid and modular teams, continually train employees in digital skills, and revise incentives to encourage taking risks. Financial resilience will be key to betting on the upside, surviving volatility and pivoting quickly.
Planning for continuous change
The only certainty in the Pandemic Era is change. The pandemic has set in motion forces that will continue to play out for years to come. While we can’t predict which scenario will prevail, maintaining the status quo is not an option. All companies can take steps today that will prepare them to seize opportunities and navigate obstacles that arise. Prioritizing safety, sustainability, agility, and innovation is a winning strategy no matter what happens.
Peter Schwartz is SVP, strategic planning and chief futures officer for Salesforce.
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