Corporate Governance

COVID-19, the RNA string that changed earthly life irrevocably and permanently

COVID-19, the RNA string that changed earthly life irrevocably and permanently

Humanity has come together as never before and has changed as it could not otherwise have – irrevocably and permanently. We have COVID-19 to thank. This is a true Black Swan event, arguably the largest in human history – unexpected, with massive global impact. Even if the doomsday predictors are wrong, COVID-19 has changed how human beings interact with each other, for good, pun intended. Of course, we are trying hard to find out why and then ‘fix the problem’. Everyone knows, however, that there is no going back to ‘life as usual’. Our way of life will no longer be as it was before.

What does this really mean for humanity?

The good that could come out this –

The environment may get the respectful treatment it deserves, from man’s reduced and / or better utilization of natural resources. For example, we could move away from fossil fuels to use of renewables – as we move away from cheap public transport to cheap personal transport. Already, reduction in human movement over the last 2 weeks have brought ducks and dolphins to the canals of Venice, as they have brought hummingbirds and parrots to the trees in Pune.

Maybe we will become humble about our ability to predict our future. Till 4 months back, markets all over the world had not factored in COVID-19 into their calculations of price movements of any paper or commodity. My friend Padma once spoke of hubris with a more evocative phrase – ‘creative conceit’. The whole prediction industry – including for example, our Rating Agencies – has been ‘creatively conceited’ for quite a long while. They act as if their ability to parse past data gives them a lock on how individual entities or markets will behave in future. We’ve seen ratings being wrong, especially in India in the recent past. One key learning from this event – if indeed we do learn it – could be that we need to examine our concepts of risk and uncertainty more than we have in the past, and with that additional learning, we could maybe create more reliable and competent models to predict our future – from 3 weeks to 3 months to 3 years to 3 decades out.

The challenges we will need to address –

The present way of life will change radically and rapidly for all of humanity – regardless of where separate pockets of people are at today, in terms of technology sophistication. In humanity’s own interest, technology and information arbitrage must be brought down swiftly across the globe – to begin with, in certain critical areas.
Large assemblies of humans will become rarer – or so I feel from what I am seeing today around me, and what I am hearing about as events unfold globally. We will, therefore, see dramatic change in things we’ve taken for granted for our entire lives, from urbanization, housing, transport (public/private), manufacturing, entertainment, organized religion, food, hospitality, medicine, health creation, sport, culture, finance (economics, currency, banking), business (international trade, retail, logistics),education, defence, to elections, government and governance. Everything is set to change.

Nations must show willingness and speed in change.
China could change – as it has shown signs of willingness to do – from its past of obfuscation and plain lies to open-ness and verifiable disclosure, if it is to win back the trust of the rest of the world.
Other nations too will need to keep in mind the lessons from the events in China, Italy, Germany, France – and over the coming weeks from India and the UK.
Nations must work together to make things happen in concert, because borders (even large physically separated ones) appear to have lost meaning.

Global business entities are already (in several instances) larger than nations. If they wish to grow, they too will need to speedily change from opaque to open entities. Interconnectedness and governance will become matters of serious concern and action. More importantly, from a survival point of view, business management must now seriously look at defining Risk (starting with uncertainty), predictability of the near /distant future, methods of dealing with situations of under-information. These are now critical areas of research and study, to enable businesses (and thus mankind) to survive and stride ahead.

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