A Putin/COVID-19 “Double-Whammy” World: What do Strategic Planning Models Suggest we Might do?

In 2022, Project Management by llebrun

Image

By Mark Hollingworth

EMBA, Eng., B. Sc. and founder of 5i Strategic Affairs

Consultant for SETYM International, expert in team management, strategic planning and change management.

Image

In March 2020, I published two articles describing how strategic management models, particularly Scenario Planning & Strategic Assumptions, might help all organizations navigate what seemed like would be a very challenging, uncertain period of time that had been created with the emergence of the COVID-19 virus.

Two years later, while facing a different global challenge – but of potentially even greater scale and long-term consequences - it seemed appropriate to once again return to the models to see what they might contribute to our strategic decision-making in the next few months.

If you choose to use the technique, the creation of a Scenario Cross is probably the most important element of scenario planning. One of the key challenges of this exercise is to establish “Limits of Plausibility”.

Establishing realistic “limits of plausibility” on scenario cross axes is becoming more and more of a “stretch” challenge. The recent major events, that changed both our local and global worlds seemingly overnight, were all deemed implausible prior to them occurring. Perhaps it is just my own imagination, age, deeply-hidden fears or perhaps a fact, but such events seem to be happening more and more.

For example, prior to 9/11, it was implausible that two planes be hijacked by terrorists and that they would be deliberately flown into the two towers of New York’s World Trade Centre and would bring them both down. If I had proposed to a client that we do scenario planning around the “What would we do if….?” premise of a global pandemic bringing a good part of the world’s economic and social systems to a rapid halt, I am sure I would have been shown the door by many. Proposing a similar exercise around the plausibility of there being a major invasion initiated by President Putin and a subsequent war in Ukraine and refugee crisis in Europe, would I suspect have been met with a similar reaction - even as recently as December 2021.

In March 2022, what might be the axes that we might choose to create our cross?
(Shown in alphabetical order)
  • Availability of appropriate employees;
  • China’s next moves;
  • Future climate (fires, drought, flooding, insect plagues etc) emergencies (“natural” disasters);
  • Future growth or break-up of the FAANG companies;
  • Future of Putin in Russia;
  • Future (severe or not) COVID variants;
  • Global stock market performance;
  • Global supply chain issues;
  • Global migration;
  • Inflation growth;
  • Move towards either more democratic or authoritarian/populist leadership around the world;
  • NATO/EU/members states next moves;
  • Re-election (or not) of Donald Trump in the USA;
  • Rise (or fall of) oil prices, economic growth etc;
  • Severity and duration of the invasion of Ukraine;
  • Social media platforms growth/development;
  • Success (or not) of future major IT hacks/cyber-based state terrorism.

Upon review, many of these forces all converge in my personal mind (-set) around a thought of “How bad can they get”? Unfortunately, although there are signs of improvement or progress in the world (BLM, increasing attention to EDI; decreasing global poverty, organizational ESG considerations, grassroot local community decision-making etc) in my opinion these are less likely to drive change in the coming years than to be affected by the forces noted above.

Now, the main motivation behind creating scenario crosses is to help us identify the strategic assumptions that we hold about just what the world might plausibly look like in the coming years so that we can take the best possible strategic decisions for our organizations.

What are some of these strategic assumptions – or the questions that might uncover them – that we might need to identify?
  • How long will the war in Europe last? What will be its impact on the global economy, immigration, consumers/citizens, humanity, oil prices and energy mixes, government(s) and their actions/controls etc?
  • How will the move to “Green” everything be affected?
  • How will global trade/travel/supply chains be affected?
  • What is the future of the “brick vs click” retail dilemma?
  • How secure are our national governments’ or organizations’ IT systems and stakeholder data?
  • If Russian & Chinese interests are to be even more aligned, what will they do and how will “western” governments
    respond/re-align?
  • (How well) Will global and national (the press, justice systems, governance) institutions maintain their independence
    and authority?
  • How would the re-election of Donald Trump affect USA and global positions?
  • How will each of our geographic markets/footprint be affected by all of the above?
  • What will be the impact on our own ESG ambitions?
  • And “Others”…(for you to complete for your organization)

If I were thinking of creating a scenario cross with a longer-timeline – let’s say, 10-20 years – my choices of axes would be different than when doing so for a 3-5 years time line. For the former, I would choose “China’s moves” paired with “Climate emergencies”. These axes would create scenarios that all management teams should probably be giving some brief but serious reflection and time for discussion.

However, for a shorter 3-5 years timeline, my choice of two forces were, in fact, “China’s next moves” and the “Emergence (or not) of the next (severe?) COVID variant”. (You, of course, can choose to create your own cross). What does a scenario cross look like when these two axes are used?

To avoid any complications around trying to “quantify” the axis extreme-points, I chose the “Limits of Plausibility” as being “easily -manageable vs “Highly-contagious and severe symptoms” (for future COVID variants) and that China is either “Emboldened” or “Chastened” by witnessing Putin’s (lack of?) success by invading Ukraine. By doing so, 4 distinct, different yet plausible worlds were created (see Photo).

By having shared and hosted broad, generative conversations around the scenario cross with a few friends/family/colleagues, I
have captured (very briefly!) some of the ideas/topics that arose from its provocations.

Potential learnings from our reflections that might be of benefit to all include:
  1. With most of the world’s population unvaccinated and travel/social restrictions being eased or lifted, the emergence of a new (and severe) strain of COVID cannot be ignored. It was also deemed likely that many citizens would resist a return to mask
    wearing, confinement and social-distancing etc. if/when a new variant emerges.
  2. Closer links and coordinated actions between China & Russia are likely – along with a move to assemble some form of new global hybrid EU/NATO cooperative union comprised of countries neighbouring these “gorilla” nations.
  3. Global supply chain challenges will remain.
  4. State, activist or individual-led cyber-crime/hacking will continue to rise.
  5. Military spending (even among previous “neutrals” (e.g. Germany, Japan ) will rise.
  6. A world with Vladimir Putin, Xi Jinping & Donald Trump as the principal “great power” leaders (adversaries/ collaborators) is
    plausible and creates a “Game of Thrones” world-view. (During discussions we did try and imagine the scenario of Putin having
    invaded Ukraine while Trump was POTUS. Would they have gone head-to-head or would Trump have turned a blind-eye? (It felt
    to all as though a nightmare “scenario” had been avoided)
  7. With oil prices high and supply threatened, a move to “green” alternatives (including nuclear) is probable. Depending upon
    Putin’s future actions around nuclear plants in Ukraine, the nuclear option may be taken off this list of alternate energies in many countries.
  8. The shortage of skilled retainable employees will remain.
  9. Global migration will continue creating major border issues – but also producing a “brain-pool”
  10. Investing in major “brick” retail or office-space expansion would be a “Big Bet

Now, given that these scenarios are merely brief snapshots of potential worlds that are deemed plausible (by me, today), having in-depth, lengthy discussions among your senior leadership and making decisions based upon these (or your own) scenarios might seem pointless and a waste of time when there are so many short-emergencies and “fires to put out”. As a Strategist, interested in the long-term sustainable success of organizations, I disagree. I would say that performing successfully today - while planning for long-term success - is the challenge we all face in leadership positions. However, if you believe that to be the case, some “low-hanging” fruit - or “No Regrets” - that emerged from this exercise (that might be useful to all) included the recommendations to continue to invest in:

  • All round “ESG” improvements;
  • your cyber-security;
  • securing your supply chain;
  • reducing your energy footprint;
  • improving your employee value proposition (seek a #5);
  • holding cash (or short-term financial assets); and,
  • building your general organizational – and personal - “resilience” – because one thing is for sure, increased uncertainty is one assumption that all 4 scenarios in our scenario cross do predict!

I hope that this article succeeds in provoking some challenging, generative conversations among your own management teams and that some interesting possibilities for you are discovered as you try to learn and master these strategic management tools.