This pandemic is the first wave of the crisis. When the painkiller loses its effect, we will enter the second wave, economic crisis, which is already looming around us. Let us pray it does not elevate into a third wave, political crisis.
The health-care systems are bravely standing as humanity’s first line of defense: the true heroes (doctors, nurses, etc.) are shouldering the heaviness of this pandemic (physically, emotionally, mentally, and spiritually). Shame on anyone who is betraying their priceless sacrifices. Stay at home.
The economic systems (businesses in particular) are paralyzed. For example, in the Islamic world, Islamic Banks, missed a priceless opportunity to stand by their underlying Islamic principles (their sole competitive advantage over conventional counterparts). Islamic Banks were unable to differentiate themselves by surfacing the true spirit of their principles, in an impactful way.
Their principles were supposed to be felt (by their customers) in actions, rather than be appraised in promotion; merely commoditizing the principles into their products as a legitimized selling point, is an unmitigable risk.
The political systems handled the crisis like a puzzle:
The Chinese applied an aggressive, hands-on approach;
The Americans viewed it from an electoral (presidential election) perspective;
The Russians activated the stealth mode;
The European used their old manual: and
The Middle Eastern nations’ response ranged from pro-active measures to complete denial.
An example of a pro-active Middle Eastern country is the Kingdom of Bahrain, which used its political system proactively and responsibly stood for all of its people, putting the interests of the citizens and residents above all other considerations.
Eventually, we will escape the first wave. However, if economic systems remain paralyzed, then the political system will move from its supportive role towards taking full responsibility, which means the wrong system will try to fix the wrong problem.
With these disoriented political reactions, the notion will be “going back to normal.” In other words, economic recovery — also known as spending trillions of dollars in bailouts and stimulus packages — will not prevent the realization that COVID-19 has redefined our normal.
COVID-19 tested, challenged, and changed the behavioral fabric of the demand side and the supply side of the economy; as such, the economy cannot go back to normal. It must change; it must transform.
Failing during the second wave will make the third wave inevitable: we cannot afford to let this happen, not while some of the nuke buttons are on the desks of today’s leaders.
The economic systems have no choice but to declare victory over the second wave. Victory cannot be achieved via recovery; it may be achieved only by remaking a new economic reality.
A significant economic transition was already in motion, and this crisis hastened up. Leveraging technological advancements, working and studying from home (e.g., using Zoom and Google Classroom) are at the surface of this change. It is time to rethink the fundamentals beneath this change. Rethinking is everyone’s responsibility, so bring your best — your knowledge, experiences and expertise, imagination, and craziness — to the battleground.
The questions below (excavated from John Hagel’s works), as well as the accompanying examples (my humble thinking), may help in navigating your imagination.
How might the new economic landscape look?
Here and here, I envisioned a new economic reality with a new:
- Vision (liberating the economic graph from the centralized value chains)
- Strategy (removing irrelevant unit of economics)
- Tactic (freedom of ads)
Ambitious or even foolish ideas are the true seeds for any change.
What might be the new engines of economic growth?
During the first quarter of this year, the pandemic taught us an important lesson about the supply chain.
What do you think — centralization or decentralization? The answer is harder than what we might think; the future will challenge us with more such unanticipated events. We need to rethink the supply chain from its grassroots. Here and here, I suggest a new engine for economic growth, the “Network Chain.”
How does the economic value get created?
In retail banks, the value gets created by selling loans. What happens in the back office (KYC, CDD, credit assessment, risk analysis, etc.) is always viewed as nothing but pure costs. Here, I tried to reconstruct a hardcore cost center (KYC & CDD) into a value creation process (imagine banks being able to stream clients’ KYCs “the way you stream movies on Netflix”).
How might economic value get captured and distributed?
Here and here, I attempted to propose a new monetization framework “Margin Re-Monetization.”
How might economic growth get measured?
Here and here, I mixed Clayton Christensen’s and John Hagel’s theories to look beyond the short-term market ratios, “Measurminator”.
How might the new economic landscape be governed?
Here, I tried to shift the attention a bit from administrative governance and financial governance to behavioral governance.
Get creative with your rethinking. Don’t be shy — no one is watching, at least not yet! We need to make some noise to awaken the business giants.