Coronavirus Is the Black Swan CEOs Have Been Dreading
As pandemics become the new normal, companies need to expect the unexpected
In a scenario-playing exercise last October, geopolitical risk expert Sam Brannen gamed out what would happen if a massively contagious coronavirus erupted and went around the world. Central banks responded with interest rate cuts and governments with fiscal stimulus. Yet, global recession ensued as countries shut down their borders against the pandemic, entrenching a spiral of distrust, self-dealing and one-upmanship that forestalled any recovery.
In May 2018, the Johns Hopkins Center for Health Security held a similar exercise. In this one, a bipartisan cast of current and former U.S. officials confronted public panic and riots as a flulike pandemic called Clade X broke out. Eventually, the dead around the world totaled 150 million, including 15 million Americans, and the U.S. health system had been nationalized.
CEOs need to adjust to a new reality that pandemics are now a known unknown when scenario-planning their businesses.
For decades, U.S. businesses have pushed increasing parts of their operations abroad, building far-reaching enterprises and supply chains that, while…
