A Thought Experiment on the Short and Long Term
Impacts of the Present Crisis
Prelude
On March 22, 2020, the International Olympic Committee announced that it was going to take a month to study the scenarios regarding the Tokyo 2020 Summer Olympic and Paralympic Games to determine if the Games would go on as planned, or be postponed or cancelled. Only two days later, long before that month had passed, they leaked the announcement of the postponement until the summer of 2021.
The broad outlines of what happened during those 48 hours are easy to guess – having weighed their options, the Committee was unable to see how the Games could continue as planned. There was, they must have seen, no credible scenario in which the athletes would be ready to compete, and the world’s travel industry could be ready to transport millions of fans.
They also must have realized that the huge uncertainties about the course of the pandemic meant that there was no way to know if by July, when the games had been scheduled to begin, the pandemic would have eased enough that travel on a mass scale would even be possible.
And so they shared their decision, 28 days ahead of their self-appointed deadline.
Covid-19 is having that kind of effect all over the world – one day’s plans and accepted truths are overturned and displaced already the following day. And as we go through the daily ups and downs of the crisis, still business and government leaders need to have insight into what the future holds, even as the fast pace of events day by day seems to make prediction impossible.
But while we cannot predict, we can still learn much about the future to help inform our decision making through modeling the pattern of the pandemic. A set of models that has been critically important to the global Covid-19 response was developed at Imperial College, London, to consider how the epidemic-turned-pandemic might develop, and what actions would be most effective in mitigating the threat.
The College has issued a series of reports, the most recent dated March 26, 2020, in which they model the impacts of the virus under various scenarios and offer valuable guidance for leaders. Here is an excerpt:
We estimate that in the absence of interventions, COVID-19 would have resulted in 7.0 billion infections and 40 million deaths globally this year. Mitigation strategies focusing on shielding the elderly (60% reduction in social contacts) and slowing but not interrupting transmission (40% reduction in social contacts for wider population) could reduce this burden by half, saving 20 million lives, but we predict that even in this scenario, health systems in all countries will be quickly overwhelmed. This effect is likely to be most severe in lower income settings where capacity is lowest: our mitigated scenarios lead to peak demand for critical care beds in a typical low-income setting outstripping supply by a factor of 25, in contrast to a typical high-income setting where this factor is 7. As a result, we anticipate that the true burden in low income settings pursuing mitigation strategies could be substantially higher than reflected in these estimates.
Our analysis therefore suggests that healthcare demand can only be kept within manageable levels through the rapid adoption of public health measures (including testing and isolation of cases and wider social distancing measures) to suppress transmission, similar to those being adopted in many countries at the current time. If a suppression strategy is implemented early (at 0.2 deaths per 100,000 population per week) and sustained, then 38.7 million lives could be saved whilst if it is initiated when death numbers are higher (1.6 deaths per 100,000 population per week) then 30.7 million lives could be saved. Delays in implementing strategies to suppress transmission will lead to worse outcomes and fewer lives saved.
We do not consider the wider social and economic costs of suppression, which will be high and may be disproportionately so in lower income settings. Moreover, suppression strategies will need to be maintained in some manner until vaccines or effective treatments become available to avoid the risk of later epidemics. Our analysis highlights the challenging decisions faced by all governments in the coming weeks and months, but demonstrates the extent to which rapid, decisive and collective action now could save millions of lives.
The 19 page report makes fascinating and frightening reading, but essential reading for leaders and those who must make decisions for themselves, their organizations, and their countries.
In addition to epidemiological models, another tool we use to understand the future in periods of change and uncertainty is “scenario planning.” To help our friends and clients to get a clearer picture of what lies ahead as the Covid pandemic unfolds, InnovationLabs conducted a scenario planning thought experiment on the unfolding of the Covid-19 crisis and the Post-Covid World. Our focus was not on the medical dynamics of the pandemic itself, but on the broader economic and social consequences.
We then wrote a white paper to share our findings, and hopefully to help leader to identify the short, medium, and even possibly long range impacts that they must consider.
Please click here to go to the page,
where you may download the full white paper in PDF format.
Scenario Planning
Scenario planning is a compelling technique that looks at the future not in order to make predictions about what will happen, as in any case our predictions would most likely be wrong, but to consider possibilities, and thereby to inform our thinking about what may happen and develop options in advance of the need.
Good scenarios open our eyes to unseen possibilities, they help us to see connections, and they help us to foresee chains of events that might otherwise be hidden. All of this enables us to become better decision makers, strategists, and leaders
During the last 20 years, InnovationLabs has delivered successful consulting projects in the energy, health care, and aviation industries among others by applying scenario planning, and these experiences led us to write extensively about scenario planning in some of our recent books, including Foresight and Extreme Creativity: Strategy for the 21st Century (2016), which includes an extensive, 100-page section just on scenario planning, and The Big Shift (2018), which examines 83 of the key forces that are currently driving change in our world, and which are key topics for scenario planners to consider.
So what can scenario planning tell us about Covid-19 and its impacts? A great deal, as it turns out.
White Paper Contents
- Coping with Uncertainty
- Sixteen Scenarios of the Future with Covid-19
Scenario 1: Deadliness & Government Response
Scenario 2: Duration & Economic Impact
Scenario 3: Recurrence & Political Impact
Scenario 4: Treatment & Social Impact
- Observations
Leadership
The Economy
Scenario 5: The Economy & Social Order
Health Care in the US
Science
Environment
Complexity and Systems Thinking
How Crises Unfold
Education
- Imperatives
- Conclusion
- Resources
1. Coping with Uncertainty
If our experience with Covid-19 tells us anything, it’s that our predictions about the future are likely to be wrong in nearly every aspect and circumstance. To make that point crystal clear, it’s evident that throughout this crisis things that we believed were true yesterday were reversed today, suddenly overturned by new findings or unexpected outcomes. So how then are we to plan for the future and compose our strategies amidst such uncertainties?
This is why scenario planning is so useful, because it enables us to consider what may occur across a wide range of forces and factors, and thereby stretches our thinking beyond what we already know to new discoveries and realizations.
The scenarios in “scenario planning” are stories that we concoct that illuminate our present and future. We create them by identifying “forces” that are driving change, recognizing that the outcomes these forces will attain cannot be predicted. Hence, we may know what is driving makes, but we don’t know how those changes will turn out.
For this experiment, we chose eight forces, and for each of the eight we then identified what might be the two most extreme outcomes, as shown below.
- Covid-19 Deadliness: How deadly is it?
- Covid-19 Duration: How long will the virus circulate in society, or until we have an effective defense strategy?
- Covid-19 Recurrence: Is it a one-time pandemic, or will it recur?
- Covid-19 Treatments: Will an effective vaccine or therapeutic drug be developed?
- Government Responses to Covid-19: Will governments shut down society for weeks or months to stop the pandemic?
- Global Economic Consequences of Covid-19: What will the impact be on globalization, and what are the costs in terms of GDP growth, bankruptcies, and lost jobs?
- Political Impact of Covid-19: How will the handling of the crisis impact on established national politics?
- Social Impact: How much will Covid-19 affect how we live and our attitudes?
The scenario planning technique pairs two driving forces to create a 2 x 2 matrix of possibilities, as shown here:
Each quadrant of the 2 x 2 matrix defines a scenario, a unique and specific situation that results from the labels on the two ends of the driving force axis. “Scenario 1” is thus the outcome of the world in which Alternative 1A and Alternative 2A are the realities.
Because the two ends of each axis are polar opposites, the four resulting scenarios are quite different from one another. And that is exactly the point. This thought experiment forces us to consider four very different sets of outcomes in any given situation, which by definition enables us to think beyond our first instinct and beyond our base assumptions and biases.
We’ve seen over and over how this opens minds, as we hear comments like, “Oh, now I see the bigger picture!” and “I thought I knew what would happen, but now I realize that all four options are actually possible.”
This is the case even though the 2 x 2 matrix is obviously a simplification, as each pairing thus omits 6 of the 8 factors we chosen (and who’s to say that those 8 are even the right 8 to begin with…). But experience has shown over and over that humans are quite good at modeling 2 x 2, and rather poor at trying to model more than 2 x 2. Experience has also shown that we can get a lot of insights from looking at the intersection of just two forces, and so while this does simplify things, it also illuminates them. Once our thinking process is used to extrapolating from constrained conditions, we tend to extend that faculty to address even more complexity, so we can readily think of scenario planning as training for real-life decision-making.
2. Sixteen Scenarios of the Future with Covid-19
With 8 driving forces to consider we can devise 28 different pairings, and of the 28 possibilities we have chosen 4 to focus on here. We chose these four because each one pairs a Covid-specific theme with a non-specific theme.
- Covid-19 Deadliness & Government Response
- Covid-19 Duration & Economic Impact
- Covid-19 Recurrence & Political Impact
- Covid-19 Treatment & Social Impact
There may certainly be other useful or interesting pairings to try, but we expected that thinking through these four would suffice to bring forth a lot of insights, as indeed it did. Four 2 x 2 matrices yield 16 scenarios in total, which gave us a lot of content to consider…
(and then the white paper continues for another 15 pages…)
•••
… Please click here to go to the page,
where you may download the full white paper in PDF format.
We hope you find this interesting and helpful.
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And as always, we welcome your comments and feedback.