COVID-19: PreparationCoronavirus: Could the World Have Prepared Better for a Pandemic?
As we deal with COVID-19 epidemic, obvious questions are being asked about how governments and companies can prepare themselves for these sorts of extreme events. One technique that has gained prominence in helping business people and officials deal with events that have a low probability but high impact is called scenario analysis or scenario planning. There are a number of different methods that can be used to model scenarios, but in essence these all involve developing stories about a number of possible ways that the future could unfold.
As much of the world gets used to social distancing, school closures and restrictions in movement in response to the coronavirus pandemic, obvious questions are being asked about how governments and companies can prepare themselves for these sorts of extreme events.
One technique that has gained prominence in helping business people and officials deal with events that have a low probability but high impact is called scenario analysis or scenario planning. There are a number of different methods that can be used to model scenarios, but in essence these all involve developing stories about a number of possible ways that the future could unfold.
Probably the best known and most widely used approach, which was developed within Shell during the 1970s, involves groups of stakeholders discussing what happens when two unrelated but highly uncertain drivers of change interact in extreme ways. The eminent scenario analyst Kees van der Heijden, a former head of scenario planning at Shell, has described how one of the company’s early scenario-planning exercises examined the government approach to the energy sector and the potential discovery of significant natural gas reserves.
This approach does not aim to predict the future, and in fact recognizes that this is a fundamentally impossible and futile thing to do. Instead, it encourages what van der Heijden has called “strategic conversations”, which allow those involved to have their world views challenged. The hope is that this makes business people and officials more aware of when things are not going according to plan – and so better able to respond.
Not a Black Swan Event
There is little doubt that this sort of agile thinking has helped some officials and companies respond earlier and more decisively to the changing events of recent weeks. In some ways, the COVID-19 pandemic is a prime example of a black swan event – a term coined by the writer Nassim Nicholas Taleb to describe very high impact events that are unimaginable before they happen.
But the COVID-19 pandemic should not really be a black swan event. Epidemiologists have been warning for decades that a pandemic of a novel flu strain was inevitable. There have been a number of scares over the past two decades, such as the SARS outbreak in 2002-04, which was concentrated in southern China and Hong Kong, the swine flu pandemic that originated in Mexico in 2009, and H5N1 avian flu in the 2000s.
