3 Scenarios for the Pandemic Era | Salesforce

I've been doing scenario Planning for almost 50 years, Geeta, and in all that time, I have never seen a moment of greater uncertainty than when the pandemic hit. I've been through wars, financial crises, political crises, but the magnitude of the uncertainty when the pandemic began was enormous. We didn't know whether there'd be vaccines. We didn't know whether there'd be mutations. We didn't know how governments would respond. We didn't know how people would respond. So the uncertainty was enormous.

I would say strategy is Back before the pandemic, organizations were planning linearly and the unknowns were known. Today, we have a lot more variables, many of them Peter described in the external environment, also in the way our companies, our employees respond. And the only way to imagine what might happen is using scenarios.

What scenarios do you see and how do they differ? So there are three possible scenarios that we see, and they're a function of really the interaction of the virus and our response to it and how society and economies respond to that. The first scenario is what we call the uplift scenario. And frankly, it's the best case scenario. It's aware what we see going on today works very, very well in terms of the pandemic itself. People are getting vaccinated. More people around the world are getting access to vaccines. We're managing it very effectively. So that by call it middle of next year, 2022, the things begin to get a whole lot better and we begin to move out of the pandemic phase itself. And at the same time, the government policies in the economy, in politics and so on work remarkably effectively. We get a return to growth and sustained growth. So this is the uplift scenario. It's a world where essentially we have sustained growth and strong leadership by governments in the United States, Europe, Japan, elsewhere around the world. That's very, very effective. So that's the first scenario. The second scenario. I like that one. I like that one. Yeah, that's the best case. Yeah, we like that scenario. Now, the second scenario is a function of two things. That is, first of all, that it takes a bit longer to deal with the pandemic itself. That is that the virus persists, we get another wave, but we're still fairly effective in managing it. And we bring most of the world with us, but it means that we'll still be in the world of the pandemic through most of 2022, and we won't really see recovery from the pandemic itself till toward the end of that year, beginning of the following year with respect to the economy. This is where the big difference also lies. One of the great worries of the enormous amount of money that governments are spending to sustain the growth of the economy is that it will produce a return to hyperinflation. And so this is the scenario where inflation does return. It's not transitory. And as a result, the central banks of the world, United States, Europe, Japan, UK all begin to pull back, raise interest rates and a recession results. The result of that is a major shakeout, right? The big governments pull back. You see a huge return of, say, Silicon Valley, like companies rising from the bottom. This is a bottoms up scenario where a lot of energy comes from startups, from social movements and so on. So this is a shakeout scenario. And the third scenario is where first of all, the virus persists for a long time, you get a new variant, worse than Delta, and it forces us to pull back rather dramatically and we retreat from globalization. We put up the boundaries again, border controls are strengthened. This is the world where in fact, international tensions between us, China become much more problematic. And so this is a world where there's a high degree of political tension and a relatively ineffective response to the virus. This is the scenario we call fault lines. A world that is deeply divided into political blocks.