The Black Swan of COVID-19 Outbreak creating a New Normal

We continue to flounder with the COVID 19 pandemic, flounder because we do not have a plausible complete solution for it. The scale of this pandemic has been  ‘never before’. The rate at which it has been propagating has been exponential. And let’s face it there are going to be some permanent changes in our lives.

Without a doubt, it is a Black Swan! A lot of people are waiting to get back to normal life! But I dare say there will be no old normal but a new normal, a different type of! Typically with every Black Swan event, there Is a huge shift in people and their behavior.

With this shift in behavior, many people are wondering whether the crisis offers the world an opportunity for a more sustainable and equal(ity) path. This pandemic will result in a loss of approx. $1 trillion worldwide which means it will have a terrible effect on developed countries and a devastating effect on poorer countries even if they are not affected directly by the virus ( which is unlikely though)

Black Swan events also create a huge moment or time of change and in such an event like this which is disaster driven, this change, whilst it looks hugely detrimental, should not be seen just as a trip of systems but rather as processes of change creating new structures, frameworks, etc.  These can be in the area of social interaction, development, representation (and perhaps even regulations)

The immediate recovery plans are largely economic in nature, but what is required is relook at all aspects especially societal values and provide for a more solid foundation for the future ahead.

Presently there has been a deepening of social inequalities, questionable practices in the name of democracy leading to nationalism, xenophobia and religious dogma dividing countries

From a social & business intersection, there are a few areas which will need to change

• Environmental & Climate Exigencies

We have tested our planet and with each day we are stretching it beyond limits. There is deep stress in the system. It is important to understand that we are bound by planetary boundaries and we only have that much going around. People and businesses have to live within these boundaries.

This stress in the system is symbolized by the rise of COVID -19 which has been attributed to the bats and pangolins. The selfish nature of man combined with survival and pushed man to devour anything. And if it is easy … overexploitation happens.

It is all connected. Animals. Nature. Climate. Environment.  Climate change and disease are linked. There exist links, overlaps, and dependencies between the biggest issues. As the planet warms, the seasons will lengthen and things go awry,  geographies will expand for many dangerous diseases. Seas rise and areas are washed away. People suffer both economically and with health and typically any serious economic suffering results in strife (of varying degrees though). People run away and thereby spread a disease. Whilst this is simplistic but this is reality.

On the flip side and perhaps even perversely, slowdowns usually result in usually positive climatic indicators because there is less trade, less travel, and fewer transactions. But the cost for mankind is high due to high financial strain. It would be nicer to build an economy for that pandemic risk and slashed the ongoing death and disease from pollution and climate change.

• Increased Inequality

The recovery from such a pandemic will only drive to deepen existing insecurities financially and socially.  For example, it has been noticed that with every economic slowdown or wars – the rich stay rich but the poor become poorer creating a bigger chasm. It is commonsensical that when there is general economic satisfaction, people generally do not resort to anything untoward but when there are such huge insecurities, the chances of lawlessness increase.

Largesse from the government and profitable businesses will be needed to satiate some of the problems. Increased investments, economic stimulus, reduced or no taxes, minimum wages,  free healthcare, loan moratorium are some of the measures which will be needed. I dare say, profits may not be the core objective for corporates but employee welfare and objectives like that may be also.

• Human Rights Violations

Any disasters such as the COVID pandemic challenges the government to control the spread. Extraordinary measures are taken such as lockdown, curfews, shutting of borders, tracking of people to enforce discipline and quarantine. Some countries may even resort to an emergency which can lead to a severe compromise of human rights. I agree that this may be required at this point in time but this can be a prelude to more autocratic rule.  The challenge actually is to where the draw the line as far as imposing rules go.

The easiest thing is to say that people need to be heard but actually, it is true, all people created Black Swan events as the Egypt uprising happened because of the people speaking up.

• Governmental Autocracy

There is a worry in many parts of the world where bills are being passed without much evaluation or scrutiny and in the garb of an emergency requirement. History has shown that some of these questionable bills stay even after the pandemic has passed, and the economy back on track. There is a fear of authoritarianism, dictatorship, etc.  Human rights advocates have questioned the speed with which emergency bills were passed by certain governments without parliamentary scrutiny, and fear that some of these measures will become normalized over time. In countries like Hungary, there is an inkling of a dictatorship!

Even before some of these measures were introduced, fundamental human rights were already reported to be under strain in almost two-thirds of the 113 countries surveyed for the 2018 Rule of Law Index, with concerns over a universal surge in authoritarian nationalism and a retreat from international legal obligations. “The WJP’s findings provide worrying confirmation that we live in very dangerous times for the rule of law and human rights,” said Murray Hunt, director of the Bingham Centre for the Rule of Law. “The worldwide resurgence of populism, authoritarian nationalism and the general retreat from international legal obligations are trends which, if not checked, pose an existential threat to the rule of law. Preventing violations of the rule of law and human rights is always better than curing them after the event,” Hunt said.

• Businesses using Political Influence

Simplistically put, if governments have to survive then the economy has to be in good shape, as money talks. As organizations drive business and hence the economy it is obvious that they will have tremendous latitude with the government.  And as we move forward it is obvious that Businesses need to use economic leverage to affect change in governments.  Good economics and finance make politicians look good. They have a chance to influence decision making rather than staying in the political sidelines and crying wolf! It is very important that businesses do what is important for their employees and society at large more so in a dismal scenario like this. There may be some negative fallout. See what Commander Robert Crozier did at USS Theodore Roosevelt

• Spread Risks

Majority businesses drive home efficiency to squeeze every penny out at the compromise of time. The pandemic has proven that ruthless efficiency has shown a huge weakness. Most of the manufacturers for masks & PPEs were based in China and when the pandemic hit us there was a mad scramble for N 95 masks. There was/ is a huge shortage that the manufacturers outside of China are finding it difficult to satisfy. Hence risks have to spread, build duplication of suppliers and cost cannot be the only factor.

• Connections are Essentials

Humans are social animals and hence adore connection or a sense of belonging. This connection brings people together and when this is disrupted, individuals feel loneliness and isolation. They have lost their sense of belonging! Recognizing this sense of belonging is important and look at ways for social interaction and collaboration. For example – In an organization where employees interact with each other to drive business, organizations need to look at technology/ tools/ devices to increase interaction. They need to understand the importance of connection and help employees get some sort of control.

The period before COVID-19 and the new normal that will emerge in the post-viral era: the “next normal.” In this unprecedented new reality, we will witness a dramatic restructuring of the economic and social order in which business and society have traditionally operated. Welcome to the New Normal!