Last autumn, when we were interviewing directors of industrial companies about potential disruptions in business operations, global threat scenarios such as pandemics were not discussed. At the time, business disruptions were seen as technological advancements such as digitization and artificial intelligence.
It was not that the possibility of a highly contagious infection such as the present coronavirus was not known; it just seemed such a remote threat at the time. Enterprises typically focus on matters that have a direct impact on their business operations. Very few businesses engage in systematic planning for unlike futures, such as the exceptional circumstances in which society at large now finds itself because of the pandemic.
Exceptional threats only show up on the list of corporate management when they morph from potential to probable or actual. The coronavirus epidemic turned out to be an abrupt disruption for many businesses, complicating or completely preventing the continuing of business operations. Small and medium-sized enterprises, in particular, have minimal potential for preparing for changes or for influencing the progress of those changes.
Although it is difficult to estimate the full impacts of the pandemic on businesses and the national economy as a whole, we assume that the investments in corporate foresight will increase. Strategic foresight can help in outlining concrete scenarios and assess their impact on the operations of the enterprise. This is becoming increasingly important in what is known as the 'VUCA world' characterized by volatility, uncertainty, complexity, and ambiguity in addition to rapid change.
In a fast-moving environment, we need an understanding of future trends and their effect on business operations. Corporate foresight generates knowledge that helps steer the strategies, policies, and actions of the companies. It helps to prepare for disruptive forces such as emergent technologies, global health crises, and social media phenomena such as the #MeToo movement.
Companies also have to be able to analyse various weak signals as well as 'black swans,' unforeseen events, or situations that we are unable to anticipate. The coronavirus pandemic, we must note, is not a black swan. There never was a question of whether an epidemic like this was possible or probable; it was a question of when it will happen.
For example, if the Internet were to go down, it would be an unexpected sudden event for which businesses would have a hard time attempting to prepare. Given the extent to which enterprises have digitized their services and operations, and given that the combined value of data flows worldwide has surpassed the combined value of goods flows, even a brief outage in Internet availability would have massive consequences.
Despite all of the above, it is worth remembering that crises can also have positive impacts form the viewpoint of business renewal. Disasters and disruptions guide businesses in evaluating future markets and identifying novel business opportunities.
The pandemic will be followed by a period of economic growth. It is at that turning point that organizations will need futures literacy, practical strategic roadmaps as well as capabilities to innovate new solutions to future challenges.
This blog has been published in Finnish in Kauppalehti.