Audio Interview

The impact of Covid-19 on organizations

Published on April 23, 2020   13 min

Other Talks in the Playlist: Interviews with business leaders and scholars

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Interviewer: Today I'm interviewing Paul Schoemaker, who is research director of the Mack Institute for Innovation Management at the Wharton School. Professor Schoemaker, thank you for joining us today. How is the coronavirus likely to affect big companies? Prof. Schoemaker: This is unprecedented for many organizations, they've been around for centuries so things do happen that come out of the blue, but we distinguish between cases where you can do risk analysis and get probabilities estimated from cases where it's really uncertain. Maybe you can speculate about outcomes, but you can't easily put probabilities into the picture, and I think we're not even in that situation, it's worse. I think we're in more ambiguous territory, we don't even know what the issues are, the business challenges caused by the virus. You might even argue that we are in an era of great ignorance and chaos, which means you need to navigate the unknown, and that is a test for most organizations because they want to be in control. The notion of being humble and developing very general strategies that can be adapted to the unexpected is the example of a black swan. Not many people saw this coming, and that's quite different from people who are just good at peripheral vision or scanning the horizon. This is really having to respond to an out-of-the-blue development. And very few do it well, but the companies that do it well we would term 'vigilant companies'. They would also have exhibited this capacity in other ways, to anticipate, to look around corners and be agile in their responses. What most companies are struggling with is they are fire-fighting,