The last thing the world needs is another “hot-take” on COVID-19, but the biggest fallacy I see as people think/talk/write about the post-COVID-19 economic scenario is to compare it to previous economic recessions.
Why is this different?
The 2008-09 crisis couldn’t be more different than what we are seeing today, and the post-COVID-19 world is going to be wildly different across dimensions. The genesis of the 2008-09 crisis was badly crafted financial instruments, which impacted developed markets more than others and necessitated select bailouts to resuscitate consumer demand.
COVID-19 is much more broad-based in impact. Not only will it reshape business, but it will reshape intrinsic human behavior and consumer preferences. At this point, I would disregard any economic projections of this pandemic’s impact. We don’t know enough at this stage, nor how long it will take to play out (is the current stimulus enough? when do we recover, if at all? – you get the drift).
What do we know?
So, what we can say with a degree of certainty at this point? This pandemic will have wide-ranging implications:
- Asset ownership will need a rethink – nobody wants to “own” risks on their balance sheets
- CX will be paramount and essential for productivity – consumer expectations will never be the same
- We will see a fundamental transformation of how and where work gets done – there’s a new recognition that a remote and distributed model works, if done right
- Enterprises will try to conserve cash and look for self-funded transformation – no, it is not an oxymoron
- Piecemeal digital transformation doesn’t work – go big or go home
- Sourcing will not be linear and needs a rethink – organizations will truly need to rethink how and where they derive value
We are continually monitoring the situation to help our clients understand how this situation plays out. Our COVID-19 resource center has our latest and evolving thinking. Short-sighted and clickbaity takes do us no favors in this effort to understand the post-COVID-19 world. Please stay safe and curious.