Damage Control

A few years ago, writing a grant application to support research into law and public health, York law professor Steven Hoffman included a World Bank forecast that the next pandemic could cause a trillion dollars in economic damage. “People laughed,” Hoffman recalls. Even health experts thought the figure wildly overblown.

Today, Hoffman marvels at how wrong he was. A research team at Boston University recently estimated that the COVID pandemic will cost the world between $8 trillion and $15.8 trillion – an order of magnitude beyond Hoffman’s warning. Taxpayers will be settling the costs of pandemic-related business loans, subsidies and income-support payments for decades.

Beyond the economic damage, the coronavirus’s impact on people’s lives has been monumental. Families locked in, schools and businesses shut, careers on hold, borders closed and neighbours arguing over masks and the right way to physically distance. And these were the lucky ones – not the more than 30 million who tested positive for COVID-19, or the roughly one million who succumbed to the virus. (By comparison, during the 2003 SARS epidemic, 8,096 people came down with Severe Acute Respiratory Syndrome globally, and only 774 died – 44 in Canada.)

Who knew society and the economy could be hit so hard, so fast? 

“We knew,” says Hoffman, speaking as a professor of global health, law and political science. “No country was ready for the pandemic, even though we knew it was coming.” The problem? “We have lots of competing priorities.” Politicians and policymakers “know there are costs to being prepared, so they leave it to the next government to worry about.”

Governments of all stripes created innovative packages to spread financial aid, even to those who didn’t qualify

Amid the chaos, however, Canadians caught glimpses of a world worth fighting for. Front-line workers, from health-care professionals to grocery clerks, overcame their own fear to serve those in need. Businesses pivoted to produce hand sanitizer and protective equipment. Performers, speakers and teachers put their work on the Web. And governments of all stripes created innovative packages to spread financial aid, even to those who didn’t qualify for conventional programs such as employment insurance.

And then a Minneapolis police officer set his knee on George Floyd’s neck. Millions of people around the world left the safety of their homes to demonstrate that, even in hard times, Black Lives Matter – and that inequality has no place in the world we’re rebuilding.

We asked five prominent York faculty and alumni – experts in pandemics, disruption and adaptation – for their thoughts on where we’re headed and how individuals can move beyond doubt and confusion to renewed hope, resilience and purpose. 

Amin Mawani (LLM ’05) shares Hoffman’s interest in pandemics. “I’ve always been interested in the connection between health and money,” says the economist and associate professor of taxation at the Schulich School of Business, who also heads up the school’s Health Industry Management Program. On Jan. 31 – when Canada had only three cases of COVID-19 – he published an article in the Globe and Mail with the title “How businesses can plan for a coronavirus disruption.” 

Based on Canada’s experience with SARS, Mawani urged business leaders to prepare for a significant outbreak. By securing their supply chains, cross-training employees to reduce the impact of absenteeism, updating sick-leave policies and stockpiling masks and gowns, he said, business managers could ensure business continuity – and potentially gain market share. But he hedged about the virus’s impact, noting that well-prepared businesses might enjoy a comparative advantage “even if an outbreak never occurs.”

Mawani admits he was taken aback by the pandemic’s intensity – and its abruptness. Most economists foresaw a short V-shaped plunge reflecting a sudden downturn and equally rapid rebound. Instead, Canadian economic activity collapsed by 25 per cent – and later clawed its way back to only 90 per cent of pre-COVID levels. (While that may seem healthy, a standard recession is defined as at least two successive quarters of economic decline – which could mean a less-than-one-per-cent hit.)

“The recovery may be gradual,” says Mawani. “We could remain at 90 per cent for a year or so until a vaccine is developed. When 60 per cent of us get vaccinated, that’s what it will take me to be confident about the economy. Until then, I don’t want to travel or go inside a store.”

Mawani’s other big surprise was the downturn’s two-sided nature. In its first few months, “the pandemic was both a supply and a demand problem,” Mawani notes. “No one wanted to go shopping, and the stores weren’t even open.” That hasn’t happened since the Spanish flu pandemic of 1918-19.

Looking ahead, Mawani has two major concerns. Businesses adapted quickly to pandemic reality, learning to make the most of locked-down workforces and disrupted consumption patterns. But as the pandemic reshapes consumer and business behaviours, will Canadian companies be able to innovate quickly enough to meet changing customer preferences? Just as importantly, can businesses and governments meet the public’s demands for action to ensure greater diversity and social equality?

“We’ve always known there’s a social determinant to health,” says Mawani. “Low income leads to health-care issues, such as a diet of fatty foods or stress-related health problems. But COVID has exposed all our vulnerabilities” – like the fact that the virus hits the least affluent the hardest. Maps of COVID’s distribution in Toronto, for instance, show cases concentrated in the city’s poorer communities. 

In late July, we learned that people of colour make up 83 per cent of Toronto’s COVID cases. “Black Lives Matter” assumed even greater meaning when Toronto announced that Black people, who make up nine per cent of the city’s population, account for 21 per cent of its reported cases. Concludes Mawani: “Racism and poverty are the pre-existing conditions of COVID-19.”

“COVID is the ‘grand revealer’ of infrastructure problems in the world,” adds Hoffman. “It has exposed some very structural failures that we’ve never fully accounted for, and I think this highlights the costs of inequity in a society.” Among the key issues he wants to see addressed is the precariousness of employment in long-term care facilities, where staffers often work in several centres to earn one full-time paycheque. That makes them potential super-spreaders of infection. And since many health-care workers don’t have sick leave, when they fall ill, they face a terrible choice. “No one should be in a job where they have to decide between protecting their clients and co-workers, and putting food on the table.”

But Hoffman hopes COVID will have a silver lining. “Just as it’s the grand revealer, it could also be the catalyst for solving some of these problems. This could be an opportunity to build back more equitably and sustainably for the future.”

In fact, there are many reasons to be optimistic. The virus has exposed fault lines in both the economy and society. Without minimizing its miseries, the pandemic is also creating opportunities for individuals and organizations to change.

“Leadership matters, and this is an incredible time to prove it,” says Deborah Jann, a consultant who teaches leadership and resilience at Schulich’s Executive Education Centre (SEEC). “We’re all dealing with very profound concepts now. We’re questioning our identity and mortality, and we’re asking ourselves, ‘What is productive work?’” This is a time, she says, when true leaders will step up and help their people and organizations find more humanity and meaning in their work and more joy in their lives. “One could call it the age of reckoning.”

COVID could turn out to be a time of new starts and new opportunities. Wissam AlHussaini, who runs the Custom Mini-MBA program at the SEEC, notes that it often takes tragedies to move society forward. In the mid-14th century, for instance, the Black Death took such a toll on European agricultural workers that the survivors achieved higher social standing and something approaching a living wage. “It was the beginning of the middle class,” says AlHussaini. “Crises are usually the triggers for innovation. That’s when people go back to the drawing board and say, ‘How can we do something better?’”

COVID has already sparked an innovation wave. AlHussaini points to the companies, schools and governments that quickly embraced Zoom and other communications technologies to hold remote meetings. He cites the microbreweries that, as bars closed, began producing alcohol-based hand sanitizer. Bigger companies such as GM and Magna similarly pivoted to producing medical respirators. The difficulties of importing medical supplies during a pandemic also convinced Magna and other companies that there are limits to global supply chains – and encouraged them to look into ways to displace Asian imports and head off strategic shortages in the future.

“It all comes down to leaders – the people who see opportunities that others don’t,” says AlHussaini. He sees growth in industries that cater to people’s need for “contactless” services, from courier delivery to hospitals to teaching. He’s also intrigued by the growing needs of home-based workers (many knowledge-economy workers still sheltering in place will be happy never to return to the office, but they’ll need more professional tools) and by new ideas like apps that produce “office background sounds” to help home workers find their productive groove.

Resilience is embracing change and gaining energy from the changes. Resilience is a muscle. It’s something you can develop

Process innovation – finding better ways to achieve outcomes – should also be on every leader’s agenda. AlHussaini, who holds a PhD in strategic management, admires a recent pivot by drug companies such as Sanofi, Pfizer and BioNTech to share knowledge and resources as they develop and test COVID vaccines. The companies will own and market their own vaccines – but in the meantime, says Pfizer’s chief scientific officer, Mikael Dolsten, “battling the COVID-19 pandemic is far too great a challenge for any one company or institution to solve alone.” 

Innovation comes in many forms, notes Hala Beisha (MBA ’13), a Schulich grad, strategist and futurist who helps organizations deal with disruption through her Toronto consulting firm, Resilience Factor. “When you have declining margins, and layoffs like we’ve been seeing, you have to try something new – possibly something that sounded crazy before. I’m seeing companies becoming more open to experimenting with new ideas: new products, new value propositions and new ways for teams to work together.”

She suggests starting from a position of introspection. “Companies are staying close to their customers and asking, ‘Is there something you want that we don’t offer?’ Or, ‘What’s the value of our products, and how can we make them more attractive?’”

Beisha offers a tip for would-be innovators: seize the trend toward “essentialism.” Today’s stressed consumers, who bought out all the bicycles last spring and the kayaks this summer, want to get back to the simple things. “People are asking, ‘What do we really want, what do we really need, how do we simplify? How can we have simpler meals, simpler clothes, natural fabrics and colours?’”

But Jann warns that innovation isn’t easy. Companies need robust processes for performing needs analyses, identifying customer problems, developing rapid prototypes, testing and commercialization. Successful innovators also make sure they have the full support of leadership at the top and reward programs that ensure employees are inspired to do great things.

Indeed, the very act of looking for new niches will strengthen any business. Successful innovation processes bring employees together, create stronger relationships with customers and suppliers, and improve companies’ analytical capacities and speed to market. Plus, mastering these disciplines will make companies sector leaders; AlHussaini estimates that just 20 per cent of companies in any market are adept at innovation. A full 80 per cent of companies, he says, are “imitators, not innovators.”

Above all, constant change requires firms to be aligned, agile and flexible. The best way to sum this up may be resilience: the ability to prepare for what’s coming next, and to stay calm and composed – as individuals or teams – when shift happens.

“Resilience is embracing change and gaining energy from the changes,” says Jann. “Resilience is a muscle. It’s something you can develop.” 

Like many things, it starts with company culture. To promote resilience, organizations have to create and maintain work environments committed to trust and respect. This starts with leaders who ask themselves tough questions every day. What can I do better? How can I make our next meeting more effective? How can I be more articulate? How can we get better results without putting more pressure on people?

Be aware of people’s emotions and needs, communicate and collaborate, and good things happen

Self-belief is a cornerstone of resilience, says Jann. When you obsess over past events and what you should have done, she says, you’re undermining your own confidence or that of your colleagues. “Don’t ‘should’ on yourself, and don’t ‘should’ on others,” Jann says. “Catch each other when you’re doing something right. Create a culture of forgiveness and respect.”

And this is where it all comes together. Optimism, service, inclusion, empathy and innovation are all related – essential tools for surviving the pandemic. Be aware of people’s emotions and needs, communicate and collaborate, and good things happen. Despite its trials, the pandemic is creating opportunities for good.

• With a $5 million gift from Toronto’s Krembil Foundation, the Schulich School of Business will establish a new Centre of Excellence in Health Management and Leadership. Beyond industry outreach and research, the centre will partner with two Schulich degree programs designed for business leaders who want to understand health-care economics – whether they’re working in health care or managing health risk elsewhere: an MBA offering a specialization in health industry management and a new master’s degree in health care management and leadership, currently in development. “It’s being created during the pandemic and will be informed by the pandemic,” says academic director Amin Mawani. Topics of study will include digital innovation, portable and remote technologies, social determinants of health, and Indigenous health care.

• In July, Steven Hoffman was appointed by the United Nations to lead a “research road map” project that will help guide its global post-COVID recovery efforts. He is co-ordinating researchers and funding organizations to identify areas where new data would help the UN develop better strategies to “Build Back Better” and end the victimization of at-risk communities. “We’ll be finding answers to the questions we haven’t been asking,” he says, “and highlighting questions we’ve never had the resources to investigate.” He is particularly hoping to find new ways to engage business. “A lot of it is about aligning systems,” he says. “Business has a critical role in responding to the pandemic and building a more resilient society so we don’t have to go through this again.”  ■