Difficult times require more thinking

My MBA students are justifiably concerned about the impact of the coronavirus will be on the job market and their careers. The fact is that many firms are delaying hiring decisions during the current uncertainty caused by the outbreak. Beyond that, the virus does illustrate the heightened connectivity in the world today and how susceptible the global economy and civil society are to events and situations that most of us do not expect to happen.

The first time I heard about the virus, which is now called Covid-19, my sister pointed out that it might not be a good time to travel to China. This was in early January and my trip was scheduled for the middle of February.

A few weeks later the course was rescheduled for New York City during the first week of March. I went to New York to teach on the course but found it had been postponed indefinitely as the company that we were training had imposed a global travel ban while I was on the plane.

By now the virus has extended far behind the Chinese city of Wuhan with over 1 million people tested postive and over 50,000 deaths world-wide. Most international events have been canceled following the lead of the Mobile World Congress in Barcelona, and now include the London Book Fair, the Geneva Auto Show and the summer olympics.

One of the lessons that we can draw from this virus is how interconnected the world has become. Another is the importance of China and a third is that we need to think about the future in a deeper way taking into account the unexpected.

Everything is connected

The World Health Organization issued its first situation report on Covid-19 on January 20th. At that time, they had data on 278 cases in China, 2 in Thailand, 1 in Japan, and 1 in South Korea. 48 days later, WHO reports almost 106,000 cases in 101 countries.

As China locked down the city of Wuhan and the surrounding Hubei province, the global supply chain of many companies was disrupted as finished products are often assembled from components and sub-assemblies which come from other parts of the world. The first to suffer were Korean carmakers who relied on parts from Wuhan.

What this means for thinking about your career is it is no longer possible to look at a specific job, company or even an industry in isolation. Twenty years ago, I was the Global Practice Leader for one of the large headhunting company’s automotive industry practice. My partners and I placed hundreds of executives at the world’s car companies and their suppliers. We considered ourselves experts in the global automotive industry and did our best to add value through our expertise.

In those days we could look at the evolution of the global automotive business and more or less predict what would happen based on the overall level of economic activity as well as the actions of the companies in the business and the governments that regulated them.

These days what happens in automotive is impacted by a wide variety of technological, political, environmental and even geopolitical issues that introduce an almost overwhelming degree of complexity.

China is back

For millennia, China considered itself the center of civilization. Between 1839 and 1949, however, China was left behind by the industrial revolution, invaded by first the English and later the Japanese, lived through the collapse of the imperial system and underwent a series of revolts and civil wars. The Chinese call this period the “Century of Humiliation” and to a large degree the legacy of Deng Xiaoping and his successors, including China’s current leader, Xi Jinping, has been to bring China back to its rightful place in the world.

One aspect of this is the almost unlimited connections between China and many countries around the world which are currently experiencing outbreaks of their own. By the time the authorities began to pay attention, many people had brought the virus from China to their homes around the world.

Besides the spread of the virus, the economic impact is already being felt due to China’s weight in the global economy. In constant dollars, China represents 15.8 %. of the global economy according to the World Bank.

This was simply not true just a few years ago. In 2,000, for example, just over 600,000 cars were built in China and the country was not really of interest to our clients in Europe, the U.S., and Japan. In contrast, last year China was the leading automotive manufactuer in the world and built 26 million cars – far more than the 17 million or so that were built in the United States

In terms of career planning, one approach is to study Chinese. An example of this is a school in Barcelona that offers a degree in Marketing and Mandarin just for that purpose. In any event, I think it is critical that each one of us has a view about the impact that China and Chinese companies will have on the businesses we are in.

Bad things happen

The last point is that the virus teaches us that the world is not as secure and stable as we normally think it is. 

Whether it is industry disruption, a viral outbreak, unexpected political issues or even geopolitical tensions and war, the fact is that things do happen in the world which affect the future of specific spaces and the women and men who work in them.

Since leaving the search business, I have spent the last 20 years trying to teach executives and MBA students to use scenarios to think about the future in a dynamic, rather than static way.

Published by Mike R

I am a professor at IESE Business School and lecture on strategy, sustainability and geo-politics.

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