Organisations of every size and orientation are fighting to stay alive in the face of the COVID19 pandemic and its all-pervading repercussions. Amid this struggle, one reality is becoming ever more apparent: in the shadow of crisis, staying the same isn’t an option. There are no miracle cures, less still any guarantees. But we can at least reflect on what’s not likely to work, what might help navigate the immediate future and what could await further down the line for those businesses that ride out the storm.
The short term: core competencies and dynamic capabilities
For years now there have been signs that many established business philosophies are no longer fit for purpose. Even those that have underpinned enormous and enduring success stories have grown increasingly removed from modern-day exigencies.
A classic example is SWOT – strengths, weaknesses, opportunities and threats. This mainstay of strategic thinking has held sway in countless boardrooms for decades, but the fact is that it’s best employed in a world in which developments tend to unfold gently and predictably.
In the shadow of crisis, this isn’t such a world anymore. COVID19 offers the latest and most dramatic evidence of how unforeseen, unfamiliar events can bring swift and spectacular disruption – and the expert consensus is that events of comparable scale and potency undoubtedly lie ahead.
Planning for the future by meticulously analysing pros, cons, rewards and risks, therefore, seems more outmoded than ever. Survival is instead likely to stem from an ability to adapt at speed, sometimes in light of massive and even unprecedented shocks and in the shadow of crisis.
A business’s core competencies and dynamic capabilities are vital here. By way of illustration, consider the varied ways in which companies are reacting to the current crisis: some are doing very little, leaving themselves in severe peril of collapse; some are relying on bailouts to steer them through the tumult, perhaps ignoring the critical problem of what will happen when the support suddenly ends; and some are giving serious and urgent thought to what they already do well and, crucially, what they might do better or even differently.
Those in the last group are most likely to get through this turmoil with their prospects relatively undamaged, essentially unaffected or even notably enhanced. This is because they recognise that crisis compels us not just to adapt but to innovate – often radically so – and that agility and open-mindedness can lead to positive, long-lasting change.
The long term: renewed collaboration and interconnectedness
So what about the bigger picture? Will the landscape of trade be negatively impacted by the lingering effects of the pandemic and the measures taken to combat it?
Nobody doubts that the economic consequences, on balance, will be dire. In the final reckoning, although we can expect them to vary significantly from sector to sector and from nation to nation, they’re likely to be extremely challenging.
Yet history may suggest that something much better could ultimately emerge. Take, for instance, the aftermath of another devastating global episode, the Second World War, with which the COVID19 crisis is now habitually compared.
The conclusion of the conflict saw a long-awaited return to internationalism. Supranational institutions were created, and the building blocks of free trade were painstakingly pieced back together. For the vast majority of countries – and, by extension, for many of their businesses – an era of substantial economic expansion and wealth creation ensued.
Critics have claimed that globalisation has done much to unintentionally encourage the spread of COVID-19 and precious little to contain it. Maybe so. But this needn’t signal a return to isolationism, protectionism and self-interest: it could just as easily prompt an epochal redefinition of the globalisation phenomenon and the advent of a more resilient, risk-resistant model of cross-border collaboration.
It may seem fanciful to gaze so far into the future when the here and now are home to numerous difficulties and decisions. Yet it’s better to contemplate a long road to somewhere than a short road to nowhere, which is what might confront many organisations if globalisation conspicuously goes into reverse.
Solutions versus muddling through
Whether we contemplate the responses of individual companies or the trajectory of the economic system as a whole, we can see two reasonably distinct paths. The first is characterised by effective, potentially sustainable solutions. The second is characterised by short-term fixes and the hope of merely muddling through.
To put it another way: one aims to learn lessons and thereby guard against future crises, while the other relies on simply reeling from one crisis to another. It does not require remarkable levels of business acumen to discern which outlook is the more desirable – both in good times and bad.
David Falzani MBE is a Professor at Nottingham University Business School’s Haydn Green Institute for Innovation and Entrepreneurship (HGIIE) and president of the Sainsbury Management Fellowship.
Nottingham University Business School specialises in developing leadership potential, encouraging innovation and enterprise, and developing a global outlook in its students, partners, and faculty. It is recognised as one of the world’s top business schools for integrating responsible and sustainable business issues into its undergraduate, MBA, MSc, PhD, and executive programmes and has unrivalled global reach through Nottingham’s campuses in the UK, China, and Malaysia. The School holds a Small Business Charter Award in recognition of its important role in supporting small and medium enterprises. It is accredited by both the Association of MBAs (AMBA) and the European Quality Improvement System (EQUIS) and ranks among the UK’s top ten for research power.