Virtual Skills Lab | Post-traumatic growth: The rise of our new normal

Welcome to everybody. I see from the chat you were connecting from many different parts of the world. Well, those of you who started to share, if you keep on sharing from where you're calling, I would love to actually see which part of the geographical representation we have today so that I have a bit of an idea whether we're reaching across continents, which seems to be the case. So far I see North America, Latin America, Europe, Asia, Middle East, Africa. Great. Okay, well, this is great. Afghanistan, this is something. Canada. Great. Well, guys, thank you very much for joining. This is always a highlight when I can have webinars where I can meet people from all over the world like this. Sometimes it happens in the real world, so I've been doing a number of different events for the marketing teams, mainly in Asia and in Europe. And hopefully I'll be able to also do either North America or Latin America in the future, but meeting more and more people directly in person. But so far, the online platform has been a great way for us to really close the gaps and keep on being connected. So as Anna has already shared with you, I've been at Hult for now a number of years. I joined in 2012, so this is my 8th year. And whenever— before the conversation with you, I was sharing with the marketing team that I taught in every single campus. So I— London, Dubai, Shanghai was my first, my first, like, round, and then I did Boston and San Francisco and Last year I also taught in New York, so I've been able to see the full-fledged of the global campuses. And if you're interested, I teach economics, so I mainly work with economics, but also a class called Business and Global Society that is done for MBAs and EMBA. So conversation today will work as this: I will share a bit of a story with you using a presentation, and then at the end of this I will stop it, and you notice there is a Q&A box, and that's when I'm going to ask you to please share some question with me, and then Anna will help me moderate the questions. And from there, we'll try to provide you with some takeaways from this conversation. So why did I choose to talk about post-traumatic growth is because no matter whether you are calling from wherever you are right now, We are experiencing a quite unique period of history. And so what I want to share with you is why this period of history is so unique in the first place, but also want to share with you why this was somehow inevitable. We have to go through something like that. And what will be the possible post-pandemic response, and also the opportunity for us to grow afterwards, because we now feel doomed and gloomy sometimes that, you know, what we had before is gone. It's also true that something else is going to be shaped up, and that specific something else is— could be also a much better place if we understand what's— where we're coming from and what we're required for us to move on. So let me start sharing my screen so that I can take you a little bit into the story that I have prepared for you today. Okay, so you should be able to see this now. So how did I get myself into this topic? So first of all, and I haven't started now with the pandemic, I have been working in a number of different fields related to trends for quite some time. So besides, of course, my economics class, I've been working on trends and megatrends for quite some time. And I'm going to talk to you about a book that I have written in 2017 which will be the foundation of the conversation today. And I also been working in technology and anything related to artificial intelligence. So my latest book in 2019 is about AI, and it's also because I have co-founded an AI company that I started to have more interest in technology. So these are some of the, let's say, support function beside my teaching research in economics. It's really more about trends and technology, specifically artificial intelligence. But in 2017, together with another colleague of mine who is also Professor Halt, primarily in London, we wrote this book. We had an ambitious title. It was called "Understanding How the Future Unfolds," and we really wanted to understand what's going to happen in the next few years ahead of us. Now, to be clear, nobody can predict or forecast the future because the future does not exist yet. But we can clearly see predictors that tend to be safe to look at because unlikely they will actually change. Let me give an example. If you have a period of history where you're having many babies coming to life, you have a baby boom, it's likely that a specific segmentation of young people when they are, for example, 5, 10, 15, 20, the first 20 years of their life, The specific segmentation would be higher than others because simply we had a baby boom. And so we can imagine that the trajectory will continue for a few more years. If I have natural resources and I am using them more and more every day, unless I find a different reservoir, unlikely I will be able to actually preserve it. So it's likely to imagine that in the future, this specific reserve will actually dry out. And so on and so forth. So we came up with a question that we wanted to ask to a number of CEOs around the world. And the question we asked was, what keeps you worried? What is currently preoccupying you? What area of concern do you have? And so we collected all the interviews and then we look in it for frequency. So where we could find more and more answers, and we created somehow out of it, we extracted a framework that we called DRIVE. Now, DRIVE is a framework that stands for 5 different, mainly, drivers of the future. The first one is demographics and social changes. The example of population is one of the questions that was coming more recurrent. In many parts of the world, population is aging. How do I change my consumer basis, my marketing, my retailing, my packaging? These are the kind of problems that that specific group of CEOs were sharing with us. Some other CEOs were talking about the fact that food prices are increasing, water is becoming scarcer than before. Maybe we have a problem with crops, maybe we have an impact from increasing temperature and climate change. So some of those working in some form of connection with water or food, they were talking about resources. Some other were talking about increasing gap between those who have, those who don't really have, so the inequalities part. And they were sharing with us ideas about how do I close it, how do I use financial instruments like fintech to generate access to opportunity for people that don't have it, how do we make sure that we can use banking tools in a better way. So this were clearly a question for people working within the either social or financial sector. And then we started to go into the volatility side. I will suspend it for a moment. I will go back to this in a second. And for volatility, we went to enterprise and dynamics. Enterprise and dynamics was mainly business models coming from parts of the world that were not renowned to be innovators. So for example, if we were looking at China as an example, many Chinese companies were at first taking maybe an example from existing business models that were then contextualizing them in the, in China, and then they were exporting them globally. So we started to see a reverse flow of innovation that was coming from the emerging economy to the emerged ones. So these were the 5 major trends that we really discovered that ahead of us, these predictors would have happened at a much faster pace. But as you notice today, I have put in a highlight box volatility at scale and complexity. So why do I talk about this? Well, we equally noticed that for many, many business owners, CEOs, managers, there was increasing volatility in the market. Either the switching costs for consumers were becoming very easy to actually go from one product to the other, either performance was going from highs to lows very rapidly, so you had spikes but you equally had drops. Either the market was becoming crazy and suddenly it was maybe the price of oil, maybe it was the price of a commodity, maybe it was a traded item into the market. So we started to have a lot of volatility in trading. Maybe it was about the social dynamics and more and more people no longer working as employees but working as consultants or gig or freelancers, creating a different form of impact in the social infrastructure for taxes and pension and all of that. Regardless of who we were interviewing, whoever was talking to us was describing this anxiety about volatility. Other people were talking about the fact that anybody can compete these days with anything. And so suddenly scaling into the market will become much easier for some companies. Example, that company maybe start as a grassroots and then little by little is able to rapidly accelerate to scale around the world by putting maybe businesses that have been around for quite some time under a lot of pressure. And all of this was accompanied by a significant amount of complexity because now it's hard to know where the innovation is coming from, who is really involved, what is the political environment, how is the trade agreement working, do we have investors coming in, do they want to invest to create jobs, do they want to invest to actually determine just a return for themselves and the shareholders. You have a number of different situations that truly make it so difficult for us to understand that things were linear. No longer, right? They were moving from linear to complex. So we wanted to understand why. And as we were going deeper into the research, we're looking at some of the factors that help us understand why volatility, scale, and complexity was becoming such a major driver. The reason why I have chosen today to talk about this is because I also want to tell you why the COVID-19, it was to some extent, an expected problem because it's somehow a direct consequence of the kind of society we have become. And I'm gonna show you primarily through two main lenses what I'm trying to say, and from there, we'll talk about global risk and moving into a bit more of a hopeful message for all of you. So, first picture I wanna show you is extracted from our work. This was 2008, so it's a really old picture, but if we looking at a picture a little bit more recent, let's say 2018, the global GDP would be about $75 trillion, right? Now, I think what you notice in this picture is that before today, there was really very little happening from a perspective of economic wealth. So here, what it means is that any kind of problems that we face today are problems that we face most likely for the first time. Even if they look similar. Example: with the pandemic, people were talking about the Spanish flu. Problem with the Spanish flu is that it was 100 years ago and the world was very different. So you can't compare what happened then with what happened now. If I'm telling about financial crisis, it is true we have many different financial crisis, but every single financial crisis was different. It was triggered by different factors, it had different implication, it also had a different recovery time. If I'm looking at, for example, anything that we have done with previous pandemics, let's say, for example, Ebola, yes, it was effective to be contained, but it's also true that we were containing a disease that is not airborne. So, one thing is to contain an infectious disease which is through mainly the fluids. The other one is to mainly try to contain it when it's airborne, which means it's in the air, right? Through what they call the droplets. So this was also for us a first time. The reason why every major experience that we're having is a first time, or it's first time, is because we have never had that amount of growth before. So the economic growth that we have experienced has on one side lifted us up, millions of people were lifted out of poverty and became part of working and middle class. But it's also true that that growth happened because we have integrated more and more organizations around the world in both the supply chain and the, the value chains. And when we did that, we became what you hear several times, an interdependent society, which is much more interconnected than before. But in the same way as we are more interdependent and interconnected in the good things, if something go bad, we're equally interdependent, interconnected. So take mobility We have, before the pandemics, so many people that were traveling and crossing borders every single day because we have the global economy that was running. Of course, if we have an issue like that, as much as we're integrated to travel around the world, we're equally seeing issues in preventing things like infectious diseases because the same carriers are people in this case. So we have to start thinking that things like COVID-19 is nothing more than a direct unintended consequence of the kind of society we have become. So that's the first part of— for you to understand why do we have more volatility in the system. Secondly, what has really accelerated this graph is not just the fact that we had growth, but that after 1980, when we started to use actually financial instrument to generate money out of money, mainly through debt, We have inflated significantly the economic growth. So a lot of the growth that we have had in the last few years are growth that happened because you are merely creating money out of debt. So it's not the same as if I tell you is an organic growth. It's mainly growth that happened through debt. Quick example, if I go into a bank and I'm asking the bank, can I have a loan of $10,000? The bank will say, sure. The bank will give me $10,000. The moment I walk out of the bank, I owe to the bank $10,000 plus, let's say, $2,000 of interest. Those $12,000 were created out of nothing. It was just the moment in which I receive a loan that I owe 10 plus. That is the way we created growth in many circumstances. So yes, it works great if everything goes well, but what happened when something doesn't go well? Well, the same mechanism that we have used to create wealth is a mechanism that's going to show us insolvency. Reason why many businesses through COVID-19, they suffered, they had to eventually lay off people, some of them downsized, because a lot of the growth was to some extent created through debt, or it was on very weak foundations. So the first takeaway from the conversation we had so far is that that level of growth happened through mainly economic activity propelled by that. And the second driver has been technology. And I'm going to show you how, and then you will be able to see why this became an issue with scale and complexity. In this specific chart extracted from a McKinsey report, you see the number of years it would have taken specific technology to reach a certain number of people. You see how long it took the telephone to reach half of the houses in the US. You see how long it took the radio to reach about 50 million listeners. And look how long it took Facebook to go from 600— sorry, to 600 million. Only 5 years. By the time this was captured by McKinsey in 2015, we were talking about 600 million. Today Facebook has 1.3 billion users on Facebook and about 1.4, 1.5 on Instagram. So it shows you that growth through technology, because you are bypassing the physical world and you're going into the digital one, can move into exponential terms. So combination between economic growth propelled primarily through debt and growth at the— in the digital world, in which is mainly scaling at the faster pace, changed profoundly the way we are. So we have on the upside way more possibility to find solutions, we have more possibility to find information, we have more access to a global economy where everybody can participate. On the downside, a lot of that growth was driven by debt. So if you have a problem, suddenly the real value of that economy is not as much as we think it was. And suddenly we start having an economic freeze that is equally creating a financial crisis. So we have two crises that usually never happen together. But this is for you to understand that what this crisis have taught to us is that even if we are very sophisticated in our technologies, we can't forecast anymore things easily because we have increased so much the variability of the system to the point in which any form of forecast becomes quite difficult to be, to be actually accurate. So what is the possible problem with that? Well, you see, what we have truly lost, guys, is the ability for me to tell you with some form of accuracy, this is what will happen in the next few months. That part is gone. What we have discovered though is that we do not necessarily— are far from understanding what could happen. We are far from understanding when it could happen and how. So if this is what we have, because in the case of volatility, scale, and complexity, we lost the ability for us to see things then we have to change our response mechanism in dealing with crisis. And that's exactly what this pandemic has really taught to us, that those organizations that were able to think differently, they have been able to eventually survive, sometimes prosper. Those organizations that haven't been able to think differently, they of course will succumb. Now there are a couple of slides I want to share with you just to keep on building on this before we're moving into the, the construction side of the possible scenario in the future. This is a slide that shows you that we start having with increased speed, increased systemic ripple effect, which means that we'll keep on having multiple accelerations in the system. And it's difficult for us to really stop something when it starts because we tend to work in terms of network diffusions So it works at a faster pace. It's the same mechanism that an idea is becoming viral on social media and now millions of people watch this. The same happened with any major events. We now have almost extreme high level of acceleration for any form of events happening to us. And many of these events, because they happen maybe only once, they're not easy to be captured by statistical measures because In statistics, what you tend to measure is the frequency for something to happen. So if I have to plan my risk, I will tell you I will try to reduce my risk on what I can see. But when you can't see a risk, it's very difficult for you to prepare for this. So not specifically in this pandemic, and I will explain you why, but generally speaking, in the 21st century, we have seen the rise of what we call black swans. Which are statistical events that tends to be not too frequent, very rare to happen, but they also have a very high impact when they happen. So because we cannot see them, that's why they're called black swans, we can't prepare for them specifically. And one example of this that you will all understand is of course the financial crisis of, sorry, not the 9/11 in 2001, in 2001, where suddenly we changed the way we see the world because it became clear that something had changed for good. The same mechanism can be applied to a number of different events like the tsunami in Southeast Asia in 2004. The reason why the pandemic is not the black swan is that black swans are events that we can't see. But this pandemic, we knew that we could actually have an infectious disease problem because it was captured by any form of global risk report that we actually produce. So if you want to use the same concept of the black swan, it was still a swan, but it wasn't black, it was a white swan, because it was a big problem that we could see. We simply didn't know when this would actually have accelerated. And to prove you that, This is a picture of the Global Risk Report that was published in January by the World Economic Forum. And although you see that infectious diseases is on the top left and not necessarily in the center, we see that it was already mentioned and mapped as one of the possible risks. And that's exactly what I told you before. In today's society, we have lost the ability to know for a fact when it will happen. What we know is that certain things are going to become critical, and therefore we can imagine that something around those areas will eventually occur. So example: climate action, migration that is involuntary, social instability, national governance failure. These are all events that are somehow in front of us, so they're all white swans. What we don't really know is how they will eventually shape up and in which way they will eventually trigger. Now, I just want you to see a connection between climate action, so climate change, water crisis, food crisis, and infectious diseases. So one of the things that we have to consider is that, and it's not very well represented by the media, is that COVID-19 is the first event that is directly related to climate change. Climate change doesn't only happen with the temperature of the water becoming warmer. It's just the entire ecosystem goes through a transformation. And in the ecosystem, we are also crossing boundaries with wildlife in a way that we have never seen before. So just for you to have a point of perspective. Now, does it mean that we are doomed? Well, of course not. It just means that we have to reorganize ourselves in a different way. Here is how. This is an example coming from Boston Consulting Group that was published in April, so it's still quite relevant. You see closest in the red, those industries that really got hit a lot, and closest to the green, those industries that really grew a lot. So what we have to understand is that every major crisis is bringing opportunity for us to reshuffle and reorganize yourself in a different way. The way in which we organize ourselves is mainly by trying to understand where the specific demand that is still there, but it has simply changed its way of expressing itself, has moved and shifted. So if I'm able to reorganize my operations to meet the demand, then clearly I am still running my business because I am clearly understanding that market is still there it simply changed the normal delivery of the market. So let's take an example. So at Hult, we've been doing some online learning already for quite some time, but we have beautiful campuses. So the reason why we tend to be on campus is because we like the experience with the students. And that's clear. But the moment that we all had to force ourselves to migrate over to online, it didn't take us much to do that. So most of my classes went online, all of them eventually when we had to. To shut down the campuses. My courses and my students were mainly happening through Zoom like now. The breaker rooms were happening through the digital. So one of the things that happened is that the business model quickly adapted to meet the new demand. This is why we've been, you know, somehow capable of running our business regardless of the disruption. There are many others that have done the same. They started to understand, for example, that maybe instead of having sit-down restaurant, They had to refresh the menu for delivery and making sure that— or curbside— making sure that now we had enough container and disposable to mainly bring food. Maybe we needed to hire people to transport food. So they have rapidly tried to change their business model to meet the new demand. There will be, and you will see as soon as we are easing the lockdown, there will be a new form of consuming that will become very visible. Because we see the organization trying to rapidly adjust in to what is mainly the new behavior. All I'm trying to say is that we tend to feel sometimes that we lost something. All that happened is that the major shock created by the condition in which we were already interconnected society has radically changed what we used to call our normal. Now we have to reorganize yourself in a way that we can understand where the new normal really is. Once we understand it, we will have to try to deliver to that in a way that will make sense. Because this is exactly the nature of post-traumatic growth, is that you're growing out of a shock to become better than before. So if we have this as a mindset, we'll understand that after a period of adjustment, some company, of course, that did not manage the transition will have to go. Other companies that became financially weak will be acquired. New companies will have emerged because now we have new business formation that we didn't have before. So rather than thinking about a shock and a loss, we have to think about a shock and a reorganization of our economic activity in the, in the months to come. And I understand that when you guys read the news, you have this impression that people losing the job. And of course there's a lot of pain going through because the pandemic come with people who die, which is a sad event on its own, and people losing a job, which is another sad event on the other side. And we understand this is a price that some of us are paying, but there's also a price that will hopefully try to build foundation for a new model that will hopefully be more resilient than right now. Because ask yourself this question: if for the last 70 years after World War II, in 70 years of increased prosperity, If 2 months of lockdown truly kill an economy, don't you think that the economy maybe was not as healthy as we think? Because something that is mainly solid eventually undergoes shocks. Let's take an example of a house. If you have good foundation and you have a shock, maybe yes, some part of the house will break, maybe some windows will break, maybe a part of the roof get damaged, but the foundation are strong enough to the point in which they can undergo the shock. So what you have to do afterwards, you repair it, you improve it, but you pretty much have it. But if you have a global economy that's been built on 70 years of prosperity, that suddenly is being in shambles because of what happened, it shows you that the foundation of the economy before was not as strong as we think. So we're hoping that whatever is happening afterwards will be really coming from much healthier foundations than the one we had before. And together with my colleagues, we came up with mainly a framework. This is together with Olaf Groth, who is a professor in the San Francisco campus, and Terence, as I mentioned before, on the London campuses, uh, campus. We designed something called a flip it. So this is mainly something that I want you to have a look at. First is mainly the forces, so mainly what is that really happened. The second is the logic What is the new story emerging from this? The third is the phenomenon. What is now the new behavior that we can see identified? The fourth is the impact. How do this behavior impact my own organization? And the fifth and most important is the triage, which means now that we understand it, how do we constantly experiment? And to prove you that this has worked well, these are some of the businesses that across 6 different dimension they have really prospered through this last 2 months. These are businesses that were maybe not existing before, businesses that were still experimental, businesses that were still very pivotal, businesses that simply were still in the R&D. But because of this tremendous amount of experimentation that we had in the last 2 months, many of this new business model have really emerged. Some of this are here to stay, Some of them will have expanded the existing portfolio. Some of them eventually will become smaller and they will become hybrid. It doesn't matter. What matters for you to understand, guys, that in any given shock, our behavior to the shock is the most important part of it. And it cannot be on denial, frustration, or hoping that the past will come back. 'Cause I can tell you now, unlikely the same past will come back. But it has to be on how do we experiment something different in a way that we can keep on creating value by understanding that that value tomorrow will have to be flexible, interoperable, adaptable, adjustable. Because then you can easily constantly respond. Let me give you one example and then I will run my very final slide before the Q&A. Let's say that you are an event organizer and you organize conferences. You have venues, people coming, speakers, tickets sold, stages, marketing, all that stuff. Now an event like this happens, so what do you do with an event management company? Well, you shift it over to the online. It's the only thing you can do. So you start creating virtual events, virtual events like the one we're having right now, for example. Now you have reorganized yourself to virtual. You have to rethink about your strategy for pricing, payments, and all of that. But you're still running your business. Once we start resuming normal activities, normal in the sense physical activities, I will believe that you have built the capacity to go virtual if you need to, but you still have the capacity to go physical if you have to. So for example, if you're operating in Australia and New Zealand, because Australia and New Zealand are creating this safe bubble between these two countries, since they have been able to crush the curve, That will happen physically. But if you want to bring on a speaker from Thailand, they will need to maybe undergo to quarantine because Thailand still may be planning the easing of the lockdown. That is the case where you're using the digital to bring the speaker to the conference, connecting through Zoom, for example. So you haven't forgone the speaker, you simply adjust it to the methodology that is required given the context. Imagine this applied to every side of your business. What you have learned is that depending on the content in which you are, you're becoming resilient. And that's really where we have to see growth coming out of it, is in the ability for us to build resilience that we'll be able to actually build a scenario for our life after the pandemic that will still be worth for us exploring. Last slide for you today. This is what I was mentioning before. This is a very famous change curve. I'm hoping and wishing that all of you, no matter what you're currently doing, are thinking of your life as part of the experimentation where you can try to move away from the curve. We try things that are different, try to understand that by trying new things you are creating that future. Make a decision that has to be somehow making you feel actionable and active about it, and integrating those changes into your behavior so that you have created something that did not exist before. A very good friend of mine that I admire a lot shared with me, but also in his writing, two days ago, "If you stay in the present long enough, the future will emerge." And that's exactly what I wish for all of you, to be able to think that if you're able to keep on experimenting right now in the present, we're gonna build that future that we really going to deserve. And it will be naturally because we're coming from so much pain a much better model than the one before, hopefully capable of resisting even larger impacts coming in the future, which tends to be inevitable since we are, as I told you, this integrated global civilization that has so much upsides, but we also have to account for some downside. So this is where I finish my presentation, and we are on time for some Q&A. So Anna, I want to bring it back to you if you want to maybe see what happens in the chat, in the actual Q&A.

Yes, we actually have some questions already.

Sure.

Let's start with those. So one of the first ones would be, would speculation be part of the non-organic growth?

Yes, so Target, right? So of course, I mean, speculation is something that happens a lot in financial systems, right? Right? You have to bear in mind that every time that you have a financial crisis, you have some form of speculation, because investors don't make money when things go normal. Investors make money when things go on a roller coaster, right? So I agree, speculation will become more of a norm for us, much more than before. So we have to find mechanisms to make sure that the fluctuation is healthy, is not becoming detrimental to real businesses, small-medium enterprises, But I think it's part of the game these days that with higher volatility, more speculation comes in. Ana.

Thank you so much for that. They ask also, do you think the situation will be under control soon, or they're going to see a relapse?

So this is, uh, Leah, right? So Leah, I think it's likely that we'll see waves My problem is not the waves, it's whether we're gonna keep on doing exactly the same as the first time, then it's gonna be a disaster. But if we're learning to actually dance with the virus, I think we're gonna have a much better response than the first time. You know, let's give credit that if you are hit by this for the first time and you have, you know, our current national leaders, no matter where you guys come from, Not every leader has been proven to be at the level of the challenge. I mean, you know, it's difficult to navigate. I'm hoping that they're learning that if there is a second wave, we have to think in a different way than how we have been thinking so far, because we can't keep on having this switch-on and switch-off button for the economy. It doesn't work. You know, the economy is not like an airplane that takes off and lands. The economy is a much more complex process. So I think It's important that we learn how to cohabit with this by understanding the dynamics. If you're interested in this layer, if you, if you go online and you search the hammer and the dance, you'll be able to find more information. The hammer is the lockdown, the dance is cohabiting and co-living with the virus. So that would be a good way for you to look deeper into that. Ana.

Thank you, Professor. So, um, The next one would be, according to your opinion, which sectors do you think that have had more innovation in place during these times of pandemic, and what should be the outlook towards businesses in situations like COVID?

Right, so, Zuleyha, thanks for that question. So, you know, I would say every single sector that has been able to resort to a flexible model, the model mainly related to maybe some low-tech or open innovation where you could actually use technology as a way to replace what we couldn't do in the physical world, they are— business models have really improved. Those companies that haven't been able to really think of technology as a way to resort into the situation, they truly struggle. One quick example: if you are an employee of a company that has shifted everybody to telework, then you're working from home, but you're still working. But if you are a company that never set up a facility for telework, unfortunately, if the business is shut down the business shuts down. So you can say what happened if it's, for example, food and beverages? Well, I can tell you that many companies that could deliver but they haven't because they didn't have an application for delivery. Therefore, they didn't find themselves ready to do that. It's going back to the same conversation that is the preparedness you have to integrate technology at the right time and being able to know when to switch. So thanks for your questions, brother.

So, we also have some questions that are related to the graph that you show. I don't know if you would like to put it so they can refer to that. Because, for instance, some people, they are asking, Leah, for instance, with this graph, would we prevent for the crisis to happen or only prepare for them?

Yeah, so Leah, I know which one you're referring to, the one with the different colors. It basically means that they were mainly the acceleration they had in either succeeding or not succeeding given the impact of the coronavirus was mainly which were the industries that have quickly adapted and were able to actually reorganize themselves, and which were not able to organize themselves. And I know there are many questions now, but I can tell you that I'm sure that the marketing team will give you a recording of this session so you can go back and see the specific slide. But if you're interested, Lea, you go into Boston Consulting Group, and there was a paper in Harvard Business Review You just put Harvard Business Review, Boston Consulting Group, April. Actually, I can write down also the name of the author so you can easily search it. So you see the full article, which will be able to provide you with a sense of that. But thanks for your questions. Ana.

Thank you very much. The next one is from Carla Fernandez. She's asking, what is your opinion for the gas and oil industry?

So that's, Carlo, that's a good question. You know, I think that if there's one thing that this pandemic has done, it has accelerated us more and more towards the renewables, because suddenly very few countries today make money out of oil and gas. The big winners of what happened to the US oil and gas drop were mainly China and Russia, but the rest of the world truly suffered. So I would say, I guess oil and gas will shrink. It's inevitable. It will shrink also because in many parts of the world extracting oil and gas is more expensive than what people think. And the cost of production usually what determines how profitable you are. And I think that it has also accelerated more and more companies to explore renewable and different form of energy that will eventually become part of that expanded portfolio as was mentioned before. So of course oil and gas will still be there. I don't think it will disappear. I think what will happen is that it will simply shrink and part of that capacity will shift elsewhere. Thanks for the question, Carla.

The next one is from Sheriff Ahmed. So basically, you know, he would like to know when or how companies that are not able to operate during these times of the COVID-19 can determine the point of re-entry. To the business post-COVID for growth?

Yeah, so Sharif, this is a good question. And if you were in class, Sharif, that would be a question that your accountant or finance professor would be able to answer. I'll tell you a little bit about this. You know, a lot of it depends on your cash flow. If you are, let's say, a company, Sharif, that has no ability to integrate technology and no flexibility with your business model, the only thing that keeps you alive is your cash flow. So if you've been planning for cash flow throughout your operations in the good times, then in the rainy days, so to say, you are having— you have a way to mitigate the impact so that when the economy opens up again, you simply catch up. You might have lost that specific period of time, but you're still in business. If you don't have cash flow, then suddenly you find yourself unable to really restart. So I would say that question, Sharif, depends greatly on your corporate finance. And the fact that you might have been hearing this from different parts of the world, when you were hearing company that only had 2 weeks left of cash flow, well guys, that's because they have mismanaged their cash flow from the beginning on. You don't run any operation hoping that every day will be a sunny day. That would be naive. So I'm thinking also that while I'm sorry for company that suffering, some of them will disappear, it will also have taught us a different way of doing finance and accounting. So hope I answered the question, Sharif.

Thank you, Professor. The next one is more about the startup companies. So wait, I have it here. They wanted to see— they wanted to know, so like for starting, like somebody who wants to start a business and they are not able to get funds because of the financial crisis in emerging markets, what would you recommend for them since they don't have cash flow right now?

Yeah, so again, this is, this is a catch-22. The problem will be whether you can find zero-interest loans that will eventually be issued these days because the banks will have to eventually try to generate some liquidity in the market, whether you can start having some frugal approaches. When we say frugal, we talk about approaches that tend to be low cost but allows you to in any way try to run even limited operations So it depends business by business, but the main idea would be to try to see whether you can still run your business and operate, improving as it actually comes. There are multiple ways to do that. Some of these will be, as I said before, zero interest rate. Some will be revolving loans, which mainly means loans that you try to pay back once you have reached a certain level of profitability. One can be actually lending from other small investors, community investors, The answer to that is much more into the community rather than thinking about the large institutional players. Because one of the things that I guess COVID-19 will have redesigned is that localism will become a much more visible reality than before. And thanks for the question.

What do you tell yourself to understand the new normal with such a complex and multicausal current situation?

So this is from Yvonne, right? So Yvonne, you know, I, again, I've been studying trends for a long time, and so I am not surprised that this happened. I'm actually, I actually felt that an event of this nature could have happened. I didn't know it was a pandemic. It could have been a climate disaster, could have been migration from millions of people that suddenly are finding their habitat completely destroyed. It doesn't matter what it is, right? It could have been a major financial crisis. So I'm not surprised that this new normal has somehow— well, the old normal is gone. I am trying to say exactly what I told you in the conversation. I believe that the world we had before was quite ill-conceived. In other words, and again guys, I'm a free market economist, right? I grew up in North America and so I come from an environment which free markets and democracy were my everyday bread and butter, but I still think that we were really running our economy. It was like a terminal patient that was kept alive artificially. So it was somehow a matter of time before a major event would have happened. So for me, Yvonne, the new normal is redesigning society in a way that is much more human-centric Making sure that we understand that we haven't really been taking care of ourselves that much. That we need to have the ability to look at the big picture, but bring it down to the level in which we can really help people where we are. I would hope that more compassion comes in. I don't know you guys, if you're locked down. I've been locked down for— I mean, it's not a strict lockdown. I can go out, go to the supermarket, but you know what I'm trying to say. You know, I don't miss any of the fancy things. I miss the people. I miss a hug. I miss the people that I want to spend time with. And maybe before I was too busy for that. So what this new normal is creating is a repositioning of values that are going to be critical for us to create a new economy tomorrow. And I have no doubt that we'll actually— this will be behind us and we will actually have an even better world than before because I think we can build from scratch. I always say to all my students at the end of my classes, I say you have two chances in your life when you're looking at events. You can be a bystander looking at what happened and see, you know, whether hopefully it will be okay for you, or you can become the architect designing the way you want to. And I have seen phenomenal examples of experimentation, resilience, young people really driving the conversation. So I'm hoping that the kind of new normal we're going to have is a much more resilient world than the one that we have left behind. I hope I answered you well.

Thank you, Professor. We have time, I think, to answer 2 more questions. This one is from Rafael Toledo. He would like to know, what do you think will happen to airline companies? Do you think other companies will be going to the same destiny as Avianca, bankrupt?

Yeah. So Rafael, yes. You know, airplanes, are still gonna be around because you don't lose the airplane, you lose the shareholder who used to own the company. And what happened is that a new shareholder will eventually come up. So I read about Avianca and AMSA primarily for the people who lose their jobs. So these are the cost to pay for a mismanagement of this crisis, because for me, the crisis equal being mismanaged. As said, if a company is shutting down after 2 months, It shows you that they were running their operation on really tight markup and margins. So it's really about their financial management more than anything else. Again, guys, I think that this is a terrible time for many people, right? And I'm really sorry for the weakest member of our society who lose their job. But from a corporate perspective, if a company files for bankruptcy after 2 months of drop businesses, it really means that they were not planning financially for circumstances like this. And if, I mean, if you're running your business as a global airline company in the 21st century, you must understand that risks are always there. So we have significant experience with the fact that risk can happen. So I guess for me, to the question, Rafael, is an inevitable price to pay for whoever was running their businesses on a really thin line.

Thanks for your question. The last question. This is for the event industry. So, are virtual events the new normal? To what extent can you say that fear and stigma around large gatherings will prevent the event industry from going back to the old way?

That's a good question. You know, we will go back to the old way because humans need that form of interaction. No matter how much you try to push every single thing on virtual, it will still work, but there will be a moment in which we'll need to have our social, social relationship and dynamics. I'm going to give you guys a very final example. I mean, many of us have met important people in our life by just going out and meeting them in social events, from friends to people that we fall in love to people that become major partners. Life needs to be experienced as what life is all about. It's the ability for us to think about the fact that through sharing and the collective experience, we're becoming a better version of ourselves. So I guess eventually the events will come back. Maybe, as I said before, they'll be localized. Maybe we'll be all in safe part. Maybe we'll need to have more precautions and make sure that maybe we're asking people to provide, you know, health certificate. Maybe we'll have excess, you know, cleaning in area that have to become Whatever it is, I know that for a fact society and humanity will not stay on Zoom for the rest of our life, you know. I mean, there is nothing that will prevent people to eventually go back to this. I think we have to learn that this is a number of things. Number one, really fragile economy for that truly suffer. How do we make it stronger? Number two, we have to resort more to science, but we should never have a trade-off between public health and the economy. It's not the right choice because you cannot think that the economy is a turn on and turn off button. We have to start thinking differently. We have to use technology for what technology allows us to do, but we should never demonize it. We should always find solutions to the problem we have. So I'm sure that even that specific industry will go back to some form of social because it's stronger than anything that I have ever seen. Nothing can stop instinct. right? And that's the nature of being you. Thanks for your question.

Thank you so much, Professor Mark Esposito. Your class was really insightful, and thank you very much everyone for joining us. As we said before, now we're going to have program-specific info sessions. So I would like to introduce you to Giovanna Santana, who will be speaking about our MBA program, and Luana Saperoli, who will be speaking about our master's programs here at Holt.

So Anna, from my side, I say goodbye, right?

Yes, you can say goodbye.

As well, everybody, thank you guys. Thank you for the time, everything, the questions. And you find me on LinkedIn if you want to follow my personal updates, and I hope to meet some of you in the real world. And I'll leave you with the team, the marketing team. For more conversation. I will leave the space discreetly, and thank you guys for having me today.

Thank you so much, Professor. It was great having you.

Ciao.