If businesses could successfully predict the future then all their investment in effort and resources would be exactly where it was needed most all the time, all their merchandise and services would immediately satisfy customer demand the moment it was made and maximize sales with barely any loss.
Businesses, of course, try to do this all the time. It’s why we have pilot projects, trial periods, focus groups and (even) the largely failed and now discredited marketing personas. Our brain also works in a similar fashion. It collects information from the world around us through our senses, filters it through perception, memories, knowledge and expectations. And it then makes decisions using a calculus of perceived risk weighed against expected outcomes. All of this is, understandably, an approximation. However, most times it works well enough to allow us to use these tools with some degree of confidence.
The problem, when it comes to the post-pandemic future is how to predict something that is so unprecedented that it negates the filters of memory and knowledge and challenges the accuracy of our perception and expectations. The approximations of the past no longer work because the expected future has changed so much we can no longer accurately predict its development curve.
This is where the fundamentals are of help. Nothing is more fundamental when applied to the universe (and reality) than physics. So physics we shall use (no equations, I promise).
The pandemic, we understand, is propagated through human contact. We are its transmission vector. We also know (from the news if not from our own direct experience) that human behavior is glitzy. We find shortcuts, don’t always follow rules, underestimate risks, overestimate our own abilities and make exceptions whenever it suits us. This means that the pandemic is not going to go away until we have built sufficient transmission barriers through vaccination, altered environment and reduced social interactions.
We are unlikely then to get anywhere near normal until the end of 2021. Then, as we strive to return to normal we shall encounter the “new reality” that is governed by:
- Persistent change in human behavior
- Changes to our systems such as supply chains and institutions
- Changes in the culture experienced in different countries and environments
- Gaps created by the collapse of specific businesses that become apparent only later
- Change to our systems of governance and information sharing
All of this will be understandably disruptive. At the same time we shall have an expected upturn in the local and global economy powered by pent-up spending, stimulus packages and the emergence of new models of business that emerge in the vacuum created by failed ones.
Historically we only have one recent pandemic to guide us here and that is the Spanish Flu pandemic of 1918. As that pandemic ended the roaring 20s kicked in. It is a little different now because we are in a different technological era but the dynamic of human behavior is fundamentally the same and that guides the economy.
Explosive growth, new business models and extravagant spending behavior coupled to the inevitable change in the established status quo that will happen create opportunities. Opportunities are there for those who see them, to take advantage of them. For that to happen they need to be prepared.
I hope you’re one of those who are getting ready to do so.