The Financial Times has a piece by columnist Tim Harford about something called "hysteresis," in which the systems that existed pre-pandemic do not automatically return to their previous condition once the current crisis has passed - especially if we slide right into any sort of extended recession.
The metaphor that Harford uses is this: "Stretch a rubber band, and you can expect it to snap back when released. Stretch a sheet of plastic wrapping and it will stay stretched." The economy and the culture, he argues, will be more like the plastic wrap.
"The effects can be grim," he writes. "A recession can leave scars that last, even once growth resumes. Good businesses disappear; people who lose jobs can then lose skills, contacts and confidence."
What will change permanently? Harford writes:
"Start with the most obvious impact: the people who have died will not be coming back. Most were elderly but not necessarily at death's door, and some were young. More than one study has estimated that, on average, victims of Covid-19 could have expected to live for more than a decade. But some of the economic damage will also be irreversible. The safest prediction is that activities which were already marginal will struggle to return … Ask, If we were starting from scratch, would we do it like this again?
"If the answer is No, do not expect a post-coronavirus rebound."
- KC's View:
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I think that is a really smart observation. Businesses that ask themselves when things will go back to the way they were, when things will get back to normal, are missing both the likely reality and the potential opportunity that the pandemic can provide.
I've been arguing here pretty much from the beginning of the news about the pandemic - before it even was called a pandemic - that every company ought to have a small, two-pizza team charged with figuring out how that business would and should be different coming out of this.
The opportunities are many, and not just in business. Education and politics and entertainment are just a few of the institutions that can and should undergo self-led disruptions. Not to say that all that came before needs to be tossed out; rather, this is a moment to figure out what is … yup, here comes that word again … essential, and what is not.
"Never let a good crisis go to waste." That's a phrase commonly attributed to Winston Churchill, but the provenance almost doesn't matter. This is a time for innovation, though it probably is important that even as hysteresis occurs, hysteria is avoided. Embrace the moment.
