Nobody expected it (1). We all felt the consequences.
The Covid-19 pandemic is still taking its toll across the globe, even though it seems that in a way we have gotten used to it. Albeit at a different pace and at varied intensity, there is hardly a place on Earth which has not been touched by coronavirus. People’s lives are at stake. And not only in the very literal sense. The long-term sustenance of those who do not fall sick or die can also often be put at risk. Because the pandemic caused major lockdowns of the economy in many countries, businesses had to either significantly or completely stop trading. Income stopped, overhead costs and payroll did not. We’ve all heard dramatic stories. And those stories, surprisingly, also came from the technology sector.
Nobody expected it.
So how does one cope with such ‘unexpectedness’ of reality? After the fall of the Berlin Wall, many asked that very same question. Up until then, the world was simple: two superpowers in a Cold War to dominate the world order. It was actually quite predictable (unless someone pushed the big red atomic bomb button, that is). But 1989 changed everything.
As human beings, we need to constantly describe the reality around us. It helps us understand it. So, the term VUCA was born. Volatility, Uncertainty, Complexity, Ambiguity. Sounds familiar? Those four words describe our world quite accurately. It is a world in which the only certain thing is change. It is a world where predictions need to be updated the moment they are stated. It is a world where the planet can be turned upside down by a small microbe in a matter of a few months.
Are we then helpless children running around in darkness, praying not to fall or hit something we do not see?
Some of us probably are. And they can consider themselves very lucky they missed all the Lego blocks laying around on the floor. For the rest of us, who try to get our heads around the VUCA reality, there are a few helpful concepts.
When you think about your company there generally are two sides of it: business model and organisation.
Your business model is all about how you make money, who your customers are and what value you provide them. The questions every founder or C-level manager should start asking themselves right now are: Is my business model ready for a sudden and potentially catastrophic event (called “a black swan” in literature)? What will happen with my company if income stops for three, six or more months? What will happen if my customers start disappearing from the face of the earth? Can my customers survive without my services or products? When was the last time my company had to go through a tough period? How did we do then?
All those and many other similar questions can be summarised into the following one: Is my company anti-fragile?
Anti-fragility can be built into the DNA of a company and I’d strongly recommend becoming close friends with Nassim Nicholas Taleb and his books for those interested.
Technology seems to be one of the most common and effective ways of building anti-fragility into a company.
However, does it mean that a “digitally transformed” (as idealistic as it is) business will be resistant to any crisis? Is digital transformation and technological innovation an answer to all challenges? Or is there something else; a secret ingredient, which some companies have and others do not (or to a lesser extent) that can decide the fate of the entire business?
Now, you’ve figured out how to make your company more prepared to cope with black swans, but what about your people (the organisational side of your company)? Can they cope with stress well? Do they know what to do in a crisis situation? Are they a real team and do they trust each other? When was the last time they had to deal with an organisation-wide challenge and work together to achieve it? Are your staff resilient?
Resilience can also be trained, and it is a role of top managers to introduce such training, sometimes seamlessly, sometimes by making unpopular decisions and choices.
Many start-ups had to make tough decisions in the first weeks of the pandemic and lockdown. And not necessarily to practice resilience, but rather to survive. Others, on the other hand, flourished with VC investors realising (again), that revenue and positive cashflow is much more precious than unjustified and speculative valuation growth.
Navigating uncertainty is possible. The current pandemic will certainly not be the last drastic and unexpected shock to hit us. Nobody knows what’s coming and when, but we can be sure it is coming. The lessons we learn the hard way this time can become an insurance policy for the next black swan. So take notes, observe, learn from others and change what can be changed.
(1) Well, in fact, some people did. Most notably the World Health Organisation warned about an upcoming ‘Disease X’ a few years ago. The biggest surprise though is Dean Koontz, who in the 1981 novel The Eyes of Darkness wrote about Wuhan-400, a deathly lab-originated virus causing a global pandemic.
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