“The remedy is worse than the disease.”
— Francis Bacon
“The question is not how to get cured, but how to live.”
― Joseph Conrad
“You can die of the cure before you die of the illness.”
— Michael Landon
“Show me a sane man and I will cure him for you.”
— Carl Jung
Something big – VERY BIG – is happening now. Out there. Out everywhere. COVID is part of the picture but it is becoming increasingly evident that it is only a part, and maybe just a minor part, of what is actually going on. Fundamental restructuring of nearly every aspect of life globally is underway.
The magnitude of what is being planned is outlined by theconversation.com:
“The WEF’s vision of a “great reset” recognises that what is needed to tackle these crises goes far beyond economic reforms, or climate measures, or tackling a pandemic – it is all of these combined, and more. It is the idea that global action needs to be underpinned by a mission to change society, to make it more inclusive and cohesive; to match environmental sustainability with social sustainability. It follows their call to “build back better” – one echoed by many around the world.”
“The WEF seeks action across seven key themes: environmental sustainability; fairer economies; “tech for good”; the future of work and the need for reskilling; better business; healthy futures with fair access for all; and “beyond geopolitics” – national governments collaborating globally.”
What is the “Great Reset”?
“The Great Reset is the name of the 50th annual meeting of the World Economic Forum (WEF), held in June 2020. It brought together high-profile business and political leaders, convened by the Prince of Wales and the WEF, with the theme of rebuilding society and the economy in what is claimed to be a more sustainable way following the COVID-19 pandemic.”
“Klaus Schwab, who founded in WEF in 1971 and is currently its CEO, described three core components of the Great Reset. The first involves creating conditions for a “stakeholder economy”; the second component includes building in a more “resilient, equitable, and sustainable” way—based on environmental, social, and governance (ESG) metrics which would incorporate more green public infrastructure projects. The third component of a Great Reset agenda is to “harness the innovations of the Fourth Industrial Revolution” for public good”.
“The Great Reset will also be the main theme of the WEF’s 2021 summit in Lucerne.”
Global action
To describe the Great Reset as an ambitious undertaking is a colossal understatement. Even if restricted to just a few major countries, it is still almost beyond comprehension. In history, only war has achieved global action but always in a competitive context. The Great Reset envisions a global cooperative effort.
As they say somewhere, good luck with that.
Despite this grandiose vision, the reality is that it seems likely to impact virtually every business – globally. Only the giant corporations have some say in how this plays out but, for the rest of us that includes nearly everybody, we are effectively powerless. We can only respond to whatever is happening.
For businesses, “whatever is happening” is not a productive planning scenario. Our “whatever” is certainly going to be huge but not in the black swan sense (at least we hope so). Its nature can only be seen in vague, short-term outlines.
Business survival is at stake for many or most
The stakes here could not be higher. Given the track record to date of such great change visionaries as Napoleon and Mao (among many others), we probably need to expect and plan for the worst outcomes. Whoever is running the show today does not seem to have any higher likelihood of “success”.
The complexity of Great Reset ambitions virtually assures that the near future will be littered with catastrophes and similar, probably even worse, failures.
So, what can we do? We can plan and manage for survival, which is very different from planning and managing for growth in a stable and positive future.
Way too pessimistic, you may say. I can’t run a business based on such a grim view of the future. Leadership requires an optimistic vision.
Perhaps the leadership “optimism” that applies today is one of successfully surviving and even growing if possible in what seems to be happening, whatever that may turn out to be. Optimistic realism, maybe?
Whatever you decide to do – including business-as-usual, you will be placing a huge bet on your game plan. A bet-your-business plan.
Reality is nasty but very likely to happen
What exactly might “reality” be in our unfolding Great Reset world? Reality unfortunately is most clearly seen after the fact. Planning for an after-the-fact scenario probably won’t work too well for most of us.
Many businesses today appear to be planning more or less as they have always planned. Develop a several-year view of what the relevant business environment might look like and then work out a set of plans to take advantage of that potential future view. What could go wrong?
Well, the Great Reset for one thing. Does your planning view include anything that might result from Great Reset efforts? The Great Reset is, like it or not, almost certain to be part of the reality of virtually all businesses.
Robotics for example appears to be a major facet of the Great Reset
Robotics is real and is here today. Its various forms are going to displace huge numbers of relatively simple, routine jobs. As in gone away, forever. Worse yet, Its impact will affect many more millions of jobs. Welfare-type social responses can help bridge the transition period to some degree but will not provide a long term solution. This means “repurposing” huge numbers of people.
Good job for the Great-Reseters, yes?
The consequences here are likely to include a lengthy period of major unrest and protest. How might your business fare under such adverse social conditions?
What might the Great Reseters need to do to help affected businesses deal with all of this? How would such an environment affect your business as it is presently structured and managed? Business-as-usual doesn’t seem to quite fit here.
Major businesses are probably going to do fairly well since they tend to have the necessary financial muscle and expertise to implement robotics deeply and rapidly. This means that smaller businesses will be less and less able to compete directly. And that may just be an opportunity in disguise.
Consulting giant McKinsey estimates that roughly a third of jobs will be eliminated globally by 2030:
“We previously found that about half the activities people are paid to do globally could theoretically be automated using currently demonstrated technologies. Very few occupations—less than 5 percent—consist of activities that can be fully automated.”
“However, in about 60 percent of occupations, at least one-third of the constituent activities could be automated, implying substantial workplace transformations and changes for all workers.”
A greatly changed business environment globally
Even though we mostly cannot see the coming changes in any detail, a number of broad trends are becoming distressingly visible – at least in outline:
- Regulation will increase greatly
This one is a no-brainer since it has been underway for years if not decades and is being ramped up “exponentially” (whatever that means). Businesses must be highly flexible in terms of activities that are strongly driven by unpredictable regulation vagaries. Think office design – distancing, occupancy, …
2. Government management of many or most economies
Globalization is steadily integrating world economies. Even the ever-stumbling EU seems to be winning despite of itself in this endeavor. This means that changes are likely to be rolled out supranationally in future, as they are even today. Think COVID immunization passports for travel, meetings, …
3. Living in harmony with nature
Terms like “sustainability,” “inclusiveness,” “green,” “nature,” and “harmony” are extremely common in Great Reset writings. Even “germ-avoidant behaviors, no less – like today. While these are hard to disagree with as desirable goals, the devil, as they say, is in the details. As in devilishly difficult and hugely costly to put into practice …
4. Permanent state of lockdowns in some form
Lockdowns are the perfect agent to usher in the changes the Great Reseters desire. This is having the immediate effect of killing a huge number of small businesses. The consequences of this step are almost beyond imagination. Sadly enough, this may be a major feature of our business reality for some time to come. Your business probably needs to be redesigned for some degree of lockdown and its strictures long-term …
5. The “stakeholder economy” is a major Great Reset goal
This rather vague edict apparently has something to do with having all of us collaborate to confront an array of “existential challenges”. Brookings gets a bit more specific here:
“Preoccupation with quarterly profits is blamed for making corporations shortsighted, leading to environmental pollution, income inequalities, weakening workers’ rights, and lower capital investments—all of which are believed to undermine social cohesion and long-term competitiveness”.
“Stakeholderism, also called stakeholder economy/capitalism by the World Economic Forum, is expected to encourage a long-term orientation by rebalancing the asymmetric power of shareholders vis-à-vis other stakeholders, and revitalize the legitimacy of business.”
“A sizable share of corporations already practice some form of stakeholderism in response to pressure from value-conscious investors, consumers, and others. More than 80 percent of large corporations, for example, claim to explicitly contribute to the Sustainable Development Goals. Environment, social, and governance (ESG) investing—a class of value-based investments that target corporations that meet minimum ESG criteria—has been growing rapidly, with an estimated total value of $45 trillion in assets under management.”
“Building a stakeholder economy requires breaking the artificial boundaries that isolate purpose from performance and creating incentive structures that make corporations drivers of sustainable prosperity. This will entail systematic effort to rewire market and regulatory institutions to ensure that they serve the long-term interests of society.”
Pretty clearly, the mission is to change society. Judging from history, from which we apparently still refuse to learn, such missions get very messy very quickly. They may well add another harsh chapter to history but meanwhile businesses have to manage through it somehow …
6. Major corporations are mostly onboard with the Great Reset
This is actually some quite good news for businesses other than these majors. To paraphrase Napoleon: “Never interrupt your (competitors) when they are making a mistake”. History, ignored or not, is replete with examples of the large and powerful making huge and often fatal mistakes. These may in fact be opportunities …
Guidelines for business survival
As the preceding notes indicate, the first step in survival is recognizing the extent and magnitude of the changes presently underway. This is truly a new world, not just an adjustment to some mostly annoying new rules. Assuming that you have already made this crucial first and foundation step, here are a few ideas about what to do next:
A. Disperse your key resources
Make sure that your key business resources are not geographically concentrated. The test here is to assess whether your business could survive if any of your key resource locations was taken out for any reason. If your business is heavily concentrated in one major city, for example, it is geographically vulnerable. A big hit there and your whole business may be gone.
B. Diversify your revenue sources
Reduce concentrations of customers, products, suppliers, and locations in your business. The goal is to be able to survive if any one of these is taken out for any reason. Major concentrations of any kind are potential sources of vulnerability to any events that take out one of these. See here.
C. Monitor and adapt quickly to changing customer behavior
Customers have changed a great deal as the result of a COVID year and the changes are almost certain to continue. Make sure that all of your key people and units are tracking customer needs and behavior very closely. This needs to be part of their daily routines, not set aside for planning sessions. You also need a way to move new information quickly up the chain so that action can be developed and executed immediately. See here for more on this.
D. Keep your products and services mix focused on basic human needs
When things get crazier than they already are, assuming that is possible, people including many of your customers will adapt by dropping luxuries and non-essentials in favor of the basics. Spending will shift toward needs that are in the lower two layers of Maslow’s hierarchy of needs.
E. Develop redundancy wherever possible
Sometimes it will be difficult or even impossible to eliminate a number of significant resource, market, supply chain, or production concentrations. The only way to reduce these vulnerabilities may be to replicate them where feasible. This may take the form of splitting up concentrations.
F. Deliver, communicate, and interact electronically wherever possible
The world, like it or not, is rapidly shifting to electronic media for almost everything. This trend is generating some highly valuable dispersion of resources, customer-facing processes, production locations, and similar points of potential vulnerability. While this is happening largely due to external forces, you can use the results to strengthen your vulnerabilities.
G. Identify and minimize or eliminate your vulnerabilities
Vulnerability assessment, normally done in the context of business systems and networks – the IT world – is a useful management concept for the business as a whole. Note that this is different from risk assessment in that risk sources and risk likelihoods generally cannot be identified upfront. Vulnerabilities are weak points in your business that are most likely to cause significant damage if something happens. And stuff does happen.
Think about doing a vulnerability assessment
Every business is different and each has its own particular points of greatest vulnerability to events and situations such as the Great Reset presents. The guidelines above are quite general and won’t apply to every business so action planning requires a much more specific and detailed understanding of your major vulnerabilities.
As noted above, risk analysis attempts to do this but it is based on probability estimates for identified events. What about events that cannot be foreseen in any detail, let alone assigned a probability of occurring? Today we need something very different.
- Probability of any particular nasty event or situation happening? 0%.
- Probability of some unforeseeable kind of nasty event or situation happening in the near future? 100%.
- Plan accordingly.
Note for readers: This is already a very long post so the guidelines sketched out above could not be expanded without getting into book-length territory. If you would like further information on the survival guidelines or anything else in this post, please contact me and briefly describe what you are looking for.
Bottom line:
The Great Reset is here, like it or not. It is enormously ambitious. Jury is still out on whether it will actually be “great” but it will certainly be big, no matter what. Impacts are almost impossible to foresee except in outline. You cannot manage a business as you did in past in this resetting world as it unforeseeably unfolds.
Related Reading
Stacey Rudin writing for the AIER (American Institute for Economic Research, Great Barrington, MA) has a useful and provocative (as always) take on the Great Reset: “What’s Up with the Great Reset?”:
“Scaring people into their homes, making them fear their own family and friends, preying on their vulnerabilities, shattering their social existences— especially when you knowingly do this in hopes of making it permanent — is just about as bad as human behavior gets. “
“Just as bad, Schwab et al. know the lockdowns are “taking out” certain industries while sparing others: in a nutshell, the powerful survive. Anyone who has both this knowledge and the ability to influence lockdown duration has an unthinkable level of power and an unlimited ability to amass more of it by manipulating pretty much the entire global financial system. All of this is eminently predictable by the people encouraging, supporting, and imposing the restrictive orders. “
“The [restaurant] sector of activity has been hit by the pandemic [lockdown] to such a dramatic extent that it . . . may never come back. In France and the U.K., several industry voices estimate that up to 75% of independent restaurants might not survive the lockdowns and subsequent social distancing measures. The large chains and fast-food giants will. This in turn suggests that big business will get bigger while the smallest shrink or disappear. A large restaurant chain, for example, has a better chance of staying operational as it benefits from more resources and, ultimately, less competition in the wake of bankruptcies among smaller outfits.”
“Knowingly taking out small businesses — one of the last bastions of free speech and independence, distinguishable from the tightly-controlled corporate world — is evil. It is hard to believe anyone would do it, if they could avoid it. However, it is equally hard to ignore the fact that Florida, Georgia, South Dakota, Texas and Sweden (among many others) have fully open economies and average mortality to show for it.”
The WEF (World Economic Forum) itself has a Great Reset definition of note:
“THE CONTEXT
The Covid-19 crisis, and the political, economic and social disruptions it has caused, is fundamentally changing the traditional context for decision-making. The inconsistencies, inadequacies and contradictions of multiple systems –from health and financial to energy and education – are more exposed than ever amidst a global context of concern for lives, livelihoods and the planet. Leaders find themselves at a historic crossroads, managing short-term pressures against medium- and long-term uncertainties.”
“THE OPPORTUNITY
As we enter a unique window of opportunity to shape the recovery, this initiative will offer insights to help inform all those determining the future state of global relations, the direction of national economies, the priorities of societies, the nature of business models and the management of a global commons. Drawing from the vision and vast expertise of the leaders engaged across the Forum’s communities, the Great Reset initiative has a set of dimensions to build a new social contract that honours the dignity of every human being.”
ZeroHedge.com offers its view on a very current and major happening that will affect every business to some extent but a few types of businesses hugely: ”Here Come The Global Vaccine Passports”:
“Vaccination passports are being called the new “golden ticket” needed for global travel – and the hospitality industries that benefit – now that the recovery is on its way.”
“Countries like Greece, who get a sizeable share of their country’s GDP from tourism, are looking forward to welcoming back visitors. Greece will re-open itself to visitors on May 14, Bloomberg noted last week, but will require either a vaccination, proof of recovery from the virus of a negative test before departing for the country.”
“Those who require tourism for their livelihoods are ready to move on. Rental boat operator Panagiotis Mastoras said: “It’s the safest way. We’ve reached a point where it can’t go on like this.””
“Greece is leading the way in pushing for vaccine passports – usually taking the form of certificates or digital cards – an idea that is also catching on in tourist nations like Thailand and the Caribbean. For businesses who rely on tourism, the “passport” is seen as a “route to salvation”, the report notes.”
