I’m an optimist at heart. It seems like we’re turning the corner in our response to the pandemic. We’re not out of the woods, but the business world is re-engaging some practices that have been on hold for months.
But even if the economy is showing some signs of recovery, many aspects of it are still in a weakened state. There’s an eerie parallel between the state of the economy and the health of the population. Many of us are more vulnerable than we were six months ago. You might be a little stir crazy. Maybe you’ve put on a few pounds, or are feeling the effects of missing the gym or yoga classes. Maybe you’re still recovering from a bout with the virus, or are exhausted from being a caregiver to an afflicted family member. And, of course, geopolitical tensions and civil unrest have many of us on edge.
The economy as a whole is in a similar state. If your business is still getting by, your revenues might be way down due to the impact that sheltering in place has had on your customers. Expenses may be higher due to ongoing safety precautions. Maybe your business model has been completely shaken up and your whole industry is fraught with uncertainty.
For example, as restaurants gradually reopen, many will find consumers are leery about dining in close quarters with strangers – even if they crave that experience. And the restaurant experience may be dramatically different. One upscale restaurant plans to fill every other table with mannequins, to bolster the illusion of enjoying a big night out in a packed restaurant. Others may opt to install germ barriers that wind up looking like something only Mr. Monk or Maxwell Smart could love.
Even so, as these experiments in reinventing and reopening different businesses play out, it’s tempting to breathe a big sigh of relief. Everything’s back to normal, you’re happy to tell yourself — and your employees.
Until the next unexpected thing.
The Double Whammy
I don’t mean another virus. Sure, that’s always possible. And it’s possible that there will be new strains of COVID-19, or that those who have had the disease won’t have lifelong immunity. Or that we’ll see another, even worse, outbreak of the same virus, the same way the 1918 H1N1 flu came back stronger than ever after it first seemed to be on the decline.
But what I’m talking about is the regular, predictable type of crises — the kinds that happen with unfortunate regularity, year in and year out. Hurricane and monsoon seasons. Earthquakes. Massive wildfires.
Our economies generally are able to absorb the impacts of these types of “regular” crises. But are we prepared for them in our collective weakened, vulnerable, and uncertain states?
Nobody wants to actually say it out loud, but these “regular” crises are coming. Catastrophic events like the pandemic are horrific — but what happens when we’re also hit by a “double-whammy” with, say, a major hurricane shutting down power in major cities, closing transportation routes, or knocking out oil-production facilities?
The critical field service operations that keep our lights on and water flowing were hit hard by the pandemic. With reductions in available manpower, many field service crews have been operating as a “crew of one,” leaving zero flexibility in the event somebody has to call in sick due to even a minor sickness or injury. If a dispatcher is unable to get to work because the roads are flooded or if critical parts aren’t available because a link in the supply chain on the other side of the planet is disrupted, the effects can ripple out of control.
You know the butterfly effect — the idea that some minor event, like a butterfly flapping its wings in one part of the world, can have enormous consequences in a distant location or at some point years in the future? When everybody’s defenses are already down, that flap of butterfly wings can knock things around like a heavyweight prizefighter.
Dodging the Double Whammy
The good news is that, yes, we can mitigate the effects of this kind of double whammy. Actuaries and insurance professionals have known for centuries how to deal with a matrix of risk factors. And you have a choice: You can wait for crises to stack up and then act surprised — or you can approach the world with open eyes, knowing the value of planning for the unexpected.
For example, smart companies have learned to make workplace safety a habit. They may never know the details about the accidents that didn’t happen, but they still recognize the value of training employees to operate safely.
Likewise, we now have powerful technologies that can help mitigate unexpected events so that you won’t ever know that you dodged a bullet. AI-driven systems can use machine-learning models to flag parts that are about to break — so you can replace them before you experience any downtime. Similar types of analyses can automatically adjust technicians schedules to intelligently adjust for upcoming severe-weather disruptions. Field service automation that adjusts an HVAC unit whenever a control room is outside operating thresholds can make sure you’ve covered your assets.
There’s another reason to deploy solutions that help to mitigate the next crisis before it happens. Suppose your doctor recommended that you lose weight to lower the risk of the onset of diabetes. Not only do you avoid the disease, but you may also find you also have more energy, better sleep, and a stronger immune system.
Likewise, technologies and process improvements that can help stave off a bludgeoning from some unknown double whammy can have the added benefit of cutting costs, improving productivity, and boosting morale. You’ll see the savings to your bottom line that comes from being more aware of — and responsive to — your operations, even if you never know exactly what bullet you dodged.