The importance of eating kale and thinking things through

I have been thinking about writing this blog, off and on, over the past year. But a friend tells me it’s like eating kale and who wants to eat kale? It’s a fair point. This topic is a bit like that, but I want to see if I can find a group who can eat kale/really weigh this topic and work through what it means for their circumstance. You need to really challenge my thinking. If you agree with it, then you will need to think this through for your circumstance, discuss it productively and then plan appropriately. There is nothing to say my thinking is valid, of course, so please do go for it.

I’ll cut to the chase with the key points first and then provide the background to my thinking. The key points:

-?????????How business needs to adjust their planning, ensuring it’s both thorough and responsive to the circumstances.

-?????????That we can’t get distracted by the virus, there are still other significant changes that will come with this time.

Changes to business planning

Given that this is a giant ‘maths problem’ (explained in the background below), it makes sense for businesses to adjust its planning:

·??????Impact on staffing and structuring: For example, with specialist or hard to replace staff, do they sit together when in the office if the virus is at a certain level? What if a new strain becomes even easier to catch, at some point do you institute a changed seating pattern just in case?

·??????Culture: How do you manage and monitor your culture, particularly over time and as new people come onboard if we're not permanently back in the office fulltime? It's evident that, even without the virus, there is support for working from home (WFH) at least part time.

·??????Flexible operations: The settings for and the ability to quickly stand-up different capabilities, and with that assure staff as to what’s expected, as restrictions/openings may change. For example, what if this continues, off and on, for years? How should that impact your planning?

·??????Innovation: There’s much research that says ‘water cooler conversations’ afford new insights and innovation. It’s ironic that the chance meeting at a photocopier nearly 25 years ago led to the breakthrough that gave us the basis for the Pfizer and Moderna vaccines. Research into remote work, by contrast, has found the creation of new insights takes longer. How can businesses best prepare for any times/mixes of remote/in-person work to foster innovation? How do you train your people for this?

·??????Occupational health and safety: What if staff don’t feel safe to return to the office? If some are resistant to work alongside non-vaccinated staff? Does the employer have the right to know a staff members vaccination status and that of their household members (as that may increase their risk of carrying a virus)? How do you assure yourself of your staffs’ health if they’re under extended lockdowns, have a difficult home environment, etc?

·??????Long term changes in what’s socially expected of business: Expectations that staff will travel for business and conferences? Expectations of an employer to help staff known to be in a difficult home environment during lockdown?

·??????Business Development: Impacts on retaining and soliciting clients, and keeping abreast of industry changes?

·??????Unintended consequences for business and staff: Does WFH give rise to extra taxes or imposts? (eg FBT if staff have private use of business assets?) Is there an insurance exposure, say if there’s damage to the home and the staff member is working from a private residence with personal (not commercial) insurance cover or none at all?

·??????Points to bear in mind: Not all questions can be answered as yet, but it may be timely to start discussing some of them. For example, with long-tail health concerns, what might be the obligation to staff? Your right to ask potential new staff as to their long-tail status?

No doubt a thorough reflection will reveal more issues that all businesses should be considering and then factoring them into their planning. Particularly in a time of great change it’s reasonable to expect that fortune will favour the prepared mind/business.

Other significant issues in this time

I’ve written on most of these issues before, so I will simply flag them here as part of ‘the whole’ to be considered and not be distracted by the virus:

·??????The Fourth Industrial Revolution (4IR) and the key role I expect the second phase we’re now entering will come to play. For example, quantum computing, sub-5nm chips, and blockchain.

·??????The rise of new empires and the (relative) demise of another. Though note that I don’t believe the USA empire will meet its demise, it’s a relative issue and there is still the counterbalance of the global reserve currency and, most particularly, the next point.

·??????The growing separation of the worlds between USA + Friends and China + Friends (and Russia) and how that plays out in other trends such as tech, trade, and cyber wars.

·??????The run-off in the relative trade between Australia and China given the changed relationship.

·??????In my view there has not been the resurgence of the economy that our headline numbers suggest. Yes, the economy differs greatly across sectors and regions. But it also reflects a growing divide between the ‘haves’ and the ‘average’ Australian. The 1930s taught us that social unrest, feeling left behind, should be treated seriously.

·??????Impacts of climate change and our response.

·??????Change in the nature of globalisation, regional competition and the advent of hyper-competition with new tech.

·??????Massive debt overhang for many countries and individuals, leaving them exposed and less able to respond to opportunities, positive and negative. Is there an expectation of a ‘return to normal’ debt level? Has the stimulus money been productive? Is the debt funding productive? Add inflation into that mix and it becomes more difficult still. Consider also the history of sovereign debt defaults.

These are all issues which will greatly impact businesses, how much are they playing a part in your planning? If I think back through history, I haven’t yet recognised a time which reflects this confluence of events. That, by itself, should spurn us to pay better attention and have more probing discussions.

Background Reasoning:

My Basis

The basis of my thinking is probability and the lessons of history, influenced by medical/scientific references such as the Centers for Disease Control and Prevention and the World Health Organisation. To state the obvious for those who know me, the basis of my thinking is not medical.

Is this time sufficiently different?

We’ve all heard the calls for business, schools and our lives to ‘return to normal’. We all feel that need and would love it to be so. However, a virus isn’t driven by dates, nor will it react to our economic needs, nor our mental health.

The next argument is that not enough people die to warrant a lifestyle change. The severity of the virus has worsened during the pandemic, but perhaps the greater threat noted by medical experts is the possible long-term consequences.?For example, in the decades after the Spanish Flu there was a marked increase in Parkinson’s Disease for survivors. Hence this also puts any herd immunity argument at risk.

So far this century we’ve had at least eight epidemics/pandemics - the Nipah virus, Swine flu (H1N1), Avian flu, SARS, MERS, Ebola, Zika and COVID-19. Eight in 20 years. We also know that we don’t currently have a safe and effective vaccine for all of these viruses. We also know that there are pathogens which are resistant to medical intervention. Given this, there’s an arguable case that we live in an age of epidemics/ pandemics.

Hence, it makes sense to learn from history and plan for potential future instances.

It’s a process

So if we can’t rely on dates etc, how do we best navigate through this time? Our position is perhaps akin to that of Britain at the early stages of WW2. Britain hadn’t prepared. The signs had been there that a new threat, the Nazis, were forming but they didn’t heed the warnings. But once the war started they girded their loins, they fought and settled into a process, a mindset as to how they’d defeat this new threat to their way of life. It’s a process. For a time it demanded a change in their lifestyle, but they knew/believed if they followed the process, they’d prevail.

To give you a perspective, this is the bombing map just of London for the eight months of the blitz:

And can we return to our old life? Much like the British after the war, this ‘war’ that we face with a new enemy, will also change us. We will come through this changed, better equipped with new technology and other insights with which to face our future.

Looking after ourselves

I have been surprised that we haven’t seen more guidelines as to managing our mental health, particularly for the young, the elderly and generally those in lockdown. Hopefully that’s still to come from governments and perhaps from larger businesses such as the health funds. However, for myself, I find a focus on what I can control and ensuring I do something every day that I enjoy, works for me.

How do we prepare for an unknown future?

Let’s look at this from the perspective of a large maths problem:

·??????There is a risk of continued mutations.

·??????Some mutations may occur that are less of a threat to people, as happened with SARS.

·??????Some viruses become less of a threat because of vaccines, as with the annual flu vaccine. It’s not perfect, some of us still get the flu and fewer still die, but generally we feel comfortable in that world.

·??????Some mutations may become a greater threat. For example, the virus becomes easier to catch, it makes people sicker now or as a longer-term threat or it’s mutated such that a new vaccine is required.

·??????The antibody resistance threat is addressed through combining different drugs, as with the HIV epidemic. Work is underway for just such a solution, using monoclonals, to potentially put us on a path to ending this pandemic.

So, what does probability tell us? There are ‘pools’ of people around the world, some generally protected by effective vaccines, others not. It is simply a matter of probability that the lesser protected pools of people, particularly where large in number, will have a greater risk of spurning new mutations of that virus. Hence it’s not a surprise that many of the mutations appear to have come from populated, lesser protected areas, such as regions in the USA, Brazil, Africa and India. That’s not to say it’s exclusively going to come from these pools. It’s probability not exclusivity.

What does this mean for us? Using Australia as an example as it's an island, even it has not been able to prevent the spread of the virus. But here’s the rub. If our focus is purely on vaccinating the people in Australia then, ceteris paribus, there’s more opportunity for more threatening mutations to arise in lesser protected pools (it can still arise in Australia of course, but probability will have it more likely to arise in a lesser protected and larger pool). And, as we already know, viruses are good travellers, not just via people, the World Health Organization has found it travels and may be transmittable from frozen food.

Hence, a balancing strategy increases the safety for all of us, including those of us safely in Australia. We still need to vaccinate ourselves (and keep them up to date) but if we assist in ensuring that all parts of the world are getting vaccinated then that decreases the risk of mutations. As a practical measure it may be arguable that Australia should focus on helping our region first, and for other first world countries to follow a similar strategy for their regions, ensuring that we cover the globe adequately.

This also suggests, based on the maths, that this virus could go on, up and down, for an indeterminate period of time until we’ve effectively (not necessarily medically) ‘solved’ our global maths problem. The longer it goes on, the greater the threat of mutations. Hence, I believe we need to balance our response.

Like all of us, this isn’t the best time of my life. But history does promise us that if we think it through, if we tackle this with our best selves and work together, then we will emerge all the better. Perhaps a bit weary, yes, but we’ll come out in the end. Take care.