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The Black Swan and a Strategy Class

The Black Swan and a Strategy Class | IE Building Resilience

The classroom of an international online MBA course provides a glimpse at how various industries have reacted to coronavirus around the world.

By Nicola Gatti, Adjunct Professor of Strategy at IE Business School.



I am an adjunct professor at IE Business School, where I have had the privilege of teaching strategy to a class of very talented young individuals during the coronavirus outbreak. My syllabus is based on existing published case studies, but I could not ignore the “black swan” event that has impacted the whole world, so I discussed it with my students as we were experiencing it.

The result was incredibly rich in snapshots of the most varied situations and trends. Since this was an international online MBA course, it was not impacted by social distancing or travel bans. My students are professionals from all industry sectors and from countries on all continents—the world condensed into a classroom.

A multilateral view

We shared the anguish of the most negatively impacted sectors, which are living their worst nightmare. Students shared the experiences of airlines, automakers, ride-sharing companies, professional football clubs, and restaurants that have seen business go from normal to zero in a matter of days. Still, even in this dire situation, they have found the spirit to turn some of their productive resources to social use, for example by giving free rides to medics or using airplanes to repatriate stranded people.

Other industries have showed flexibility and entrepreneurship by shifting their production to goods or services to battle the crisis. One chemical manufacturer—still operating as an “essential” industry—has shifted to the production of disinfectants and other medical materials that are badly needed in the emergency.

On the opposite side of the spectrum, students shared the “good nightmares” of sectors that have been impacted positively, so much so that they are struggling to cope with the additional workload: food delivery, home delivery in general, e-commerce, telecommunications, healthcare. Of course, these sectors that continue to work are facing additional health hazards linked to the pandemic.

Other students belong to the long list of sectors impacted by the general economic recession looming ahead of us: construction, consumer electronics, politics, oil and gas (doubly hit, after the Saudi-Russia price war), international trade, high-tech, investment, software development, education, etc.

Some sectors are experiencing both the good and the bad at the same time—for example, makers of alcoholic beverages, which have been forbidden in some countries as part of the emergency measures but are booming in others because of social isolation.

Many businesses will be squeezed for cash because of the decrease in sales. There is a tragic analogy between the COVID-19 patients fighting for oxygen and the temporarily closed businesses that are also fighting for their “oxygen.” I will not discuss here the cash-preserving measures that are necessary in order for businesses to survive.

A new Schumpeterian cycle

The world will surely wake up from the current nightmare in a different shape, as it does after each new Schumpeterian cycle (which, by coincidence, falls right around this year). The digital transformation that CEOs, CTOs, agile groups, and others were not able to bring about—to quote a humorous picture circulating on messaging platforms—is now here to stay.

The telecommuting and remote work brutally imposed on so many of us will revolutionize not just work-related sectors like people management, but also the architecture and engineering of future homes and offices. My students noted that developing countries where Internet access is not widespread will be at a disadvantage; in the new world, that gap will have to be addressed and filled.

Over these last few weeks, we all have learned, the hard way, the values of flexibility and adaptation. But we have also learned other values, such as solidarity and compassion: hopefully these values will guide many of us—most of us—in the post-pandemic world.

My warm thanks go out to the brilliant class of IE’s Global Online MBA, section O3. The material in this article and the inspiration to write it both came from you.