“Post-Coronavirus”?? Yes, that’s right: maybe not today, but soon you’ll need to start thinking about how the world of travel and hospitality – your entire business landscape, in fact – might look when the current nightmare is over. We’re not simply going to return to the familiar, comfortable pre-Coronavirus world as if none of this ever happened. When we all finally emerge from quarantine, the world will be different. But how will it be different? That’s always the key question.
The COVID-19 crisis may be the best argument for scenario planning we will ever experience. That’s because there are still enormous uncertainties about how this situation will play out – how severe it could yet become, when it will end, and what the new business environment will be like that emerges when it does end.
Scenario planning is a structured technique for trying to figure this all out, i.e. for visualizing how different business landscapes could unfold. Although scenario planning can’t actually predict the future, it can definitely help you see the big picture better – giving you a good chance to anticipate the potential outcomes for your company, your stakeholders, your industry, your country.
It can’t be stressed enough: There is not just one future post-Coronavirus scenario that we’re all bound to find ourselves operating in, but several possible scenarios. Each one will present a different set of problems, challenges and opportunities – which you can foresee now, with a small investment of time and imagination. When you’ve visualized these alternatives, you’ll understand that each one would require a somewhat different response, depending on lots of factors that are specific to your company’s position, capabilities, strengths and weaknesses. What segment of the industry are you in? What geographic markets matter most to you? What financial and human resources do you have? These and other factors will determine what kind of strategic stance you’ll take to maximize your chances of success in each potential scenario.
Two uncertainties we are facing are how long this crisis will last, and how severe it might still be in a few months’ time. One possible outcome – the one we all hope for – is that the virus will quickly be brought under control, and its impact on the world will be limited to this short, sharp shock we’re experiencing now.
But in the binary world of scenario planning, where (for simplicity’s sake) we assume future change in contrasting “Either… Or” terms, the opposite outcome is also one you have to take into consideration: namely that COVID-19 will be even more severe and will not be mastered soon, with drastic effects on the world economy that will go on for a long time. The recovery from this alternative will not be like the recovery from a short period of temporary shut-downs and travel bans.
The methodology I use to generate future scenarios doesn’t depend on just one variable, however. There are plenty of other uncertainties that will also affect how the future unfolds – they’re just being overshadowed right now by the COVID-19 horrors. What about the fact that the price of oil has plummeted to $20 a barrel? (Lest we forget, just 6 years ago it was over $100.) Is this a momentary blip or could it last, meaning cheap energy for the foreseeable future – which in turn could have a positive impact on travel, for example?
Other uncertainties abound, too:
- Interest rates – in a year or two, will they still be hovering around zero, or will monetary authorities have raised them again? What could that mean for investment and development in a post-COVID-19 world?
- The US will hold a presidential election in a few months – what could its outcome mean for the travel and hospitality businesses, not just in or to the US, but worldwide? Surely the answer isn’t “nothing”: rescues and bailouts, tax breaks and financial incentives, deregulation, stock market performance, and many more issues are all at stake.
- And how could we be affected by the fact that millions of people will have learned that physically being in the office is not really a must when it comes to work? How might that change the future landscape?
These are just a couple of the areas of uncertainty that a scenario planning exercise would try to integrate into coherent alternative views of the future. Many more – some company-specific, ought to be looked at, too, so you can produce plausible scenarios that allow you to anticipate change – rather than merely react to it.
As a decision maker and strategist, are you thinking about the brave new world your company will face when the current phase of this crisis is finally behind us? You should be!
Woody Wade, author of “Scenario Planning: A Field Guide to the Future”, explains more about producing post-Coronavirus scenarios here.