Pandemic Reader #5
Curated articles; observed patterns ¯\_(ツ)_/¯
Week 7 of UK lockdown
World: 3,442,234 confirmed cases, 239,740 deaths (WHO)
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My weekly take: Bounceback vs Friction — the long climb
Last week ‘exit strategies’ were put under greater scrutiny. They were demoted and rebranded as the more down to earth ‘reopening’. This week sees a bit of a wishful comeback, or shall we say ‘bounceback’, as the new small business UK loan scheme has been named.
The gradual loosening of lockdown rules is either happening or around the corner. Freedoms aside.
So the government and headlines have some positive spins to report, and those are pushed hard. However, just like with ‘exit strategies’, when you dig deeper, it seems endlessly more complicated.
‘The new normal’ is vague: what/when does it point to? If the ‘new normal’ is lockdown existence, then we have a better view of what it is right now. But if the ‘new normal’ is the long crawl-climb out of the economic crisis — we are still just learning about it.
It comes down to the massive amount of friction being added into local and global economies. Reduction of friction is what created much of the accelerated growth of the last decades in many sectors. Especially globally. Even the financial crisis didn’t slow that trend down over the long-term. Now, friction is back, with a vengeance.
The economist calls it ‘The 90% economy’ a term referring to the fact that post-lockdown restrictions and changes can cost 10% of GDP. The Financial Times calls it ‘The empty chair economy’ referring to both sectors and people not going back to the way things were so quickly, perhaps never. One economist is calling it ‘zombie economy’ — not dead, not quite alive. As I flagged in previous weeks — these are all ‘wicked problems’ and predicting the systemic chain reactions is nigh impossible.
Trying to bounce back against increased friction. This will hurt. Almost no one is talking about a V-shaped recovery anymore. Maybe for a few sectors. For most, it’s going to be a very flat, long, U.
Imagine a slow, clawing, climb, against a sandstorm.
Not very bouncy, isn’t it?
The one potential wildcard? A breakthrough with a vaccine. And even that isn’t likely to remove all the friction. We now know there’s always next time. So keep an eye on proper research which is currently pointing towards the above slow scenario and try to be smart (but remember opinion volatility (see Reader #3)).
On to this week’s annotated collection…
The virus plot still thickens
Every week, we’re discovering new things about the behaviour of the virus. Mostly scary things. Even as lockdown is successful at slowing things down (track your country with this nifty FT tool).
Days 5–10 are critical. You might want to consider buying an Oximeter.
Some scientists are warning about the cost of moving too quickly with research. In other fronts, regulation can’t be loosened up fast enough.
And we still don’t know for sure if reinfection is or isn’t a thing.
It also seems that heat may help but not enough. And Autumn will be here before we know it.
Are we ready to reopen?
The UK doesn’t seem to be, at least according to those simple tests. The Guardian’s analysis of what happened during the early days is disconcerting. And Bojo’s optimisms narrative won’t be enough against the challenges ahead.
There’s no easy way out. Again — see under ‘friction’.
Trying to reopen quickly pushes too much responsibility into private hands. Business won’t like it.
We can look at New Zealand and see what a swift and decisive early action would have been like. But it’s purely theoretical at this point.
Inequality
We already know that ‘we’re in this together’ isn’t true.
Big tech is still thriving. Whatever price they pay is dwarfed by the opportunities and the reduced competition. Good for billionaires.
It’ll have to get much worse before they start worrying about a systemic collapse.
On the other side, emerging economies are in peril. If the scale of this macro-view is too big, here’s a bus ride through the poor neighbourhoods of Washington, with photos, videos and interviews.
Will this be a wake-up call? If you’ve been on this journey with me since the beginning, you know I doubt it. But here’s a fascinating ‘compromise’ analysis — it’ll be a mixture of areas of equality and inequality. It’s too soon to call.
The new abnormal
A more tangible feel for the friction described in the weekly take. Here’s a close up on some of the countries which have been reopening for a few weeks. This new normal is anything but normal.
And while I still don’t expect a revolution, I do hope that some of the critical issues that need to change won’t be ignored. Some people we’ll call for regulation to be dammed in the name of fuelling growth, but we’ll still have the climate crisis, and the US will also have alien hornets from hell.
The weekly shitshow update
On planet Trump, the republican spin-doctors are composing the smash hit of the election season ‘blame China.’
Prepare for that to be a staple of his weird variety show lineup. A twilight zone where the economy is bouncy and numbers are bendy. What’s a “small” lie about the scale of testing? Nothing when it’s added to the steaming pile of over 16,000 fallacious claims. There’s a number for you. The more outlandish of those fallacies repeated dozens if not hundreds of times.
There are still enough checks and balances to show that the threat was repeatedly cited in January and February, but what are these against the emerging use of deep fakes? And when ignorance becomes so structural and cultivated that people adopt it as their new religion.
What sort of alternative narrative can fight it? Especially when there’s not much space left on the agenda or attention spans? Stephen King, of all people, has a sensible idea.
Rapid reconfiguration
Friction and pain don’t mean there won’t be some fascinating leaps. And all manner of weird genies let out of bottles.
Universal decided to release ‘Trolls: World Tour’ (don’t ask) as a digital rental to save some of the money already spent on a massive marketing campaign just before lockdown. I’m not sure they were expecting it to make, in three weeks, what the first film did in over five months at the box office. I blame parents grasping at straws. Cinemas didn’t like it. I’m not sure it’s ideal for studios either as they would have made most of that money anyway on top of box-office takings. But… it might save some productions from death and help with recovery. Movies were always a high-risk investment.
Another event, which I meant to mention and forgot, is Travis Scott’s Fortnite concert. Wait! We’re talking an audience of 12.3M players. And some marketing managers are still ignoring esports and virtual events. Maybe they shouldn’t. Is esports even prepared for all the new money?
Overall culture consumption has been on the rise, and hopefully, ways to monetise it will save that sector which is suffering greatly. Still, much of it will shift, often in unexpected ways like this story of Vogue and the early days of the pandemic.
I might be grasping at positive straws where other sectors are unlikely to recover. Many have been fighting an uphill battle against disruption and inequality. Urban retail is an example. Other small businesses are watching their bridges collapsing.
This detailed and personal monologue about the closedown of a neighbourhood restaurant in NYC was both heart-breaking and insightful.
And when even Buffett says ‘sell’ on all his airline investments. You know that sector is never going to be the same.
Advertising — the canary in the mine; the starfish in the ocean; the water-bear in the Antarctic
The marketing services industry is known to expand and contract with the market. In big media and advertising agencies, the loss or decline of a single client account can trigger a round of redundancies. So while current comments from both Publicis and WPP show typical grace under fire after a worrying end to the first quarter, expect the big bad during summer. Winter IS coming.
It’s worrying news to a new generation of creatives about to graduate (disclaimer: I occasionally teach some of the best of said creatives), especially in an industry still struggling with diversity.
The world described above will only require more and more creative solutions. The industry is continuously inventing new business models and vehicles for talent — good reasons to remain optimistic.
One way to do it is to stay strategic, which I believe is not just a sign of resilience but a way of practising it. (My talk about Strategy in crisis is coming soon on IsolaTED Talks, and I’ll share it here and with the mailing list).
Silver linings
Two encouraging voices. A graduation speech for the class of 2020 from BCG’s Rich Lesser. And a call for leaders to show their human side from Tim Ryan, US Chairman and Senior Partner, PwC. Let’s hope they stand by it when their clients ask them to help them make cuts.
Here’s is some good advice about how to stay optimistic.
“Optimism isn’t about ignoring negative feelings. It’s about being hopeful about the future, even when the present seems wholly negative.”
And that’s it, for this time — the first of the second month of writing these updates.
I try to read broadly and deeply, but I’m only one tired human. Send me anything good/important that I’ve missed or put it in the comments.
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