HRH Prince Charles, International Monetary Fund chief Kristalina Georgieva, and BP chief executive Bernard Looney were among those participating in the online launch of “The Great Reset” …
The Great Reset … Why the Covid-19 pandemic is a unique opportunity to reimagine our future, to recode our business, to reinspire humanity for a better world
June 3, 2020
Thanks to a small bit of contagious RNA we are all now unwilling participants in a seismic experiment that is shaking the foundations of society, technology, economics, healthcare and more. Dan Pink wonders if it’s a message from the future. Klaus Schwab calls it the bonfire of blinkered capitalism. Satya Nadella describes it as a shift “from hierarchies to wirearchies”.
As we move from survival to adjustment, from chaos to catalyst, the next normal (or abnormal) is being shaped right now. The next generation of businesses are being forged. The leaders of the future are stepping up. Great leaders are made in a crisis, and innovation thrives in tough times. How will you seize this moment to do more, to be more, to create a better future?
The leaders of tomorrow are being created right now. 57% of organisations were born in a downturn.
It’s a watershed moment. As the virus followed the flows of money, goods and people around the world, the networks that facilitate our modern lifestyles facilitated the pandemic. 183 countries have reported Covid-19 cases, 3 billion people across the world have been under some form of lockdown, with a $2.7 trillion projected economic loss (according to Bloomberg).
Right now, we are seeing a huge unmasking of our current systems – the fragility of business and society, the consequences of urbanisation and globalisation, our dependence on technology and healthcare. Activities in which consumers are likely to change behaviour most are in travel, shopping, and socialising. And to some extent in work, education and health.
We are faced with a choice to re-build the world as it was, or to realise the possibilities before us. To build stronger economies and more inclusive societies, to harness the power of our resilience and ingenuity to shape a better world of our choosing. We each have a role and a stake in solving humanity’s most pressing challenges, and also seizing its opportunities.
I believe we will see a rising social conscience in business, more future-proofed portfolio- based strategies, an acceleration to digital, a humanising of technology, a shift to dematerialisation, more agile ecosystems of global and local supply and demand, a more flexible workstyle, fast projects replacing traditional jobs, a more liquid learning style … and better leaders who look forwards not back.
“The pandemic represents a rare but narrow window of opportunity to reflect, reimagine, and reset our world” – Professor Klaus Schwab, Founder and Executive Chairman, World Economic Forum.
Larry Fink, CEO of BlackRock, recently said that he expects “at least a 24 month downturn” before most businesses get back to their pre-Covid performance. “But that all depends on how quickly we can find a vaccine”. Pascal Soriot, the French CEO of Astra Zeneca (which has just become the UK’s most valuable company, after 11 years of HSBC and 8 years of BP) believes that Spring 2021 is likely to be the earliest that a vaccine is ready. His business is currently in the middle of clinical trials of a Covid-19 vaccine developed with Oxford University.
Latest IMF economic forecasts say that most economies are unlikely to recover significantly for at least 18 months (with a global -3% global contraction in 2020, broken down by -6.1% in advanced and -1.0 in emerging economies).
China is most advanced in its recovery, three months since lockdown, and returned to around 90% of its pre-Covid performance. 90% recovery might not sound too bad, but analysis by The Economist says that this “could be catastrophic” for many companies.
“Factories are busy and the streets are no longer empty. However the missing 10% includes large chunks of everyday life. Travel on public transport and domestic flights are down by a third. Discretionary consumer spending, on such things as restaurants, has fallen by 40% and hotel stays are a third of normal.”
Every business will need to adapt how it works, from fundamental shifts in business model to new ways to serve customers. On my website I have captured over 250 “pivots” as companies seek to survive and thrive. Here are just a few:
- Airbnb has closed all rental and travel activities, and refocused on “online experiences” sourcing and selling everything from online cookery courses to tango dancing.
- Chinese cosmetics brand Lin Qingxuan closed its stores, but redeployed its instore beauty advisors as online influencers, driving over 200% sales growth.
- Sydney-based Stagekings, an events business that usually builds stages, sets and expo stands, has transformed itself to make bespoke home office furniture.
- YourChoice, based in LA, realised that in niclomaside, a contraceptive drug, they had a potential Covid-19 treatment, and immediately created ANA Therapeutics
Crisis is the catalyst for change, it transforms markets, and accelerates innovation. It challenges leaders to reimagine, refocus and reinvent themselves and their organisations. Whilst some are paralysed by uncertainty and change, others see new possibilities to create a better future. Time to embrace the change, to move forwards to create a better future.
In economic cycles, every financial downturn is matched by an innovation upturn. In fact 57% of the current Fortune 500 were founded in a downturn. Right now, the next generation if businesses are being shaped. And below today’s business turmoil, a tremendous digital revolution is taking shape.
Megatrends are accelerating … the shift in power from west to east (Asia continues to grow), the dependent needs of ageing generations (care, infrastructure), the huge concentration of people in megacities (healthcare), the fragility of our environment and natural resources (less is more), and the rise of intelligent, connected technologies (AI).
Driving human and tech ingenuity … pandemic has seen rapid adoption of new technologies, and the “digital me” (belonging and connected) – in distributed working (remote and hybrid), intelligent healthcare (online and data-driven), digital retail (cashless and automated), personal mobility (electric and local) education (hybrid and collaborative).
Creating a better future business… now is the time for leaders to step up, to find a better future, not just recover the old world – more enlightened (purpose beyond profit, human before technology), more agile (networks not hierarchies, fast and liquid), more resilient (innovation not efficiency, future-proofed portfolio).
It’s hard to imagine that there will be a new normal and what it might look like. But since “a crisis is a terrible thing to waste,” as the Stanford economist Paul Romer once noted, it is worth discussing what we can already learn from the crisis at this point, in order to reshape our economies and societies, redesign our organizations, and improve the way we work, live, and love. The pandemic has exposed what Otto Scharmer calls the three big disconnects: disconnect from our planet, disconnect from the other, and disconnect from ourselves. We can use this crisis as an opportunity to overcome these divides.
Next year’s World Economic Forum 2021 in Davos will adopt the theme of “The Great Reset” as the global business elite elbows its way into the Covid-19 debate. WEF will hold an online youth conference alongside its annual meeting at the Swiss resort next January, which will go ahead as planned despite the coronavirus pandemic. The virtual event is a first for the forum and will draw on thousands of young people in more than 400 cities to interact with Davos regulars such as Saudi oil sheikhs, international bankers and messianic tech tycoons as they grapple with the world’s problems.
The WEF says the Great Reset agenda should have three main components.
The first would steer the market toward fairer outcomes. To this end, governments should improve coordination (for example, in tax, regulatory, and fiscal policy), upgrade trade arrangements, and create the conditions for a “stakeholder economy.” At a time of diminishing tax bases and soaring public debt, governments have a powerful incentive to pursue such action.
Moreover, governments should implement long-overdue reforms that promote more equitable outcomes. Depending on the country, these may include changes to wealth taxes, the withdrawal of fossil-fuel subsidies, and new rules governing intellectual property, trade, and competition.
The second component of a Great Reset agenda would ensure that investments advance shared goals, such as equality and sustainability. Here, the large-scale spending programs that many governments are implementing represent a major opportunity for progress. The European Commission, for one, has unveiled plans for a €750 billion ($826 billion) recovery fund. The US, China, and Japan also have ambitious economic-stimulus plans.
Rather than using these funds, as well as investments from private entities and pension funds, to fill cracks in the old system, we should use them to create a new one that is more resilient, equitable, and sustainable in the long run. This means, for example, building “green” urban infrastructure and creating incentives for industries to improve their track record on environmental, social, and governance (ESG) metrics.
The third and final priority of a Great Reset agenda is to harness the innovations of the Fourth Industrial Revolution to support the public good, especially by addressing health and social challenges. During the COVID-19 crisis, companies, universities, and others have joined forces to develop diagnostics, therapeutics, and possible vaccines; establish testing centers; create mechanisms for tracing infections; and deliver telemedicine. Imagine what could be possible if similar concerted efforts were made in every sector.
© Peter Fisk 2020
Peter Fisk is a leading business thinker, bestselling author and inspiring speaker, whose career was forged in a superconductivity lab, accelerated by managing supersonic brands, shaped in corporate development, evolved in a digital start-up, and formalised as CEO of the world’s largest marketing network.
He now leads GeniusWorks, a strategic innovation accelerator based in London. He is also Thinkers50 Global Director, founder of the European Business Forum, and a professor of leadership, strategy and innovation at IE Business School in Madrid, where he leads their flagship executive programs.
He has 30 years of practical business experience, working with business leaders in over 300 companies and 55 countries, from Adidas to Aeroflot, Cartier and Coca Cola, McKinsey to Microsoft, P&G and Pfizer. His distinctive approach is future back and outside in, fusing insights with inspiration, creativity and structure.
His 8 books in 35 languages fuse the brains of Einstein and Picasso, explore the creativity of da Vinci, reframe sustainability for innovation, and explore the world’s most innovative companies. His most recent book was “Gamechangers” which will be followed by “Business Recoded” to be published in October 2020.
Find out more at www.theGeniusWorks.com or email email@example.com
More from Peter Fisk:
- How do you see the future? Future Recoded … Reimagine markets. Reimagine work. Reimagine business. Reimagine success.
- Why innovate in a downturn? Whilst everyone else is losing their heads, the companies of tomorrow are being created right now
- What are the impacts of COVID-19? What business leaders should do now, to support people and society, and secure their business future.
- The Big Pivot … How are companies adapting to survive and thrive in crazy times of Covid-19 and downturn
- The latest edition of my “Fast Leader” magazine … Time to move forwards, to reimagine the future … Reimagination and Ripples of Reinvention