Stakeholder Capitalism

The Omicron variant is here - what comes next? Here are 5 possibilities

How do business leaders manage decision-making in the face of Omicron uncertainty?

How do business leaders manage decision-making in the face of Omicron uncertainty? Image: Photo by Christian Lue on Unsplash

Michael Costigan
Vice-President, Salesforce Futures, Salesforce
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  • Clarity on the implications of Omicron will not arrive for a few weeks, and until then uncertainty risks paralyzing leaders and their organizations.
  • Drawing on earlier scenario work, here are five possible outcomes to consider to help leaders proactively structure their decision-making and prepare for a range of future situations.
  • Leaders can build on the emergence of the Omicron variant to redouble collaborative efforts to defeat COVID globally.

The Omicron variant has dominated headlines, prompted dramatic government reactions, and sparked a renewed interest in pandemic forecasts. Early opinions have veered from knee-jerk, worst-case scenarios to assertions that - as nothing can be said with certainty now - it is best to avoid any future thinking whatsoever.

Caught in the middle, epidemiologists and scientists offer tentative hypotheses based on sparse but rapidly accumulating data. These messages can also sometimes carry confusion as the language is not easily accessible to the average reader.

This presents the challenge for leaders' decision-making under conditions of uncertainty, and in a context where we cannot afford to be paralyzed by fast-moving events. Together with Accenture Research, the Salesforce Futures team recently completed 5-year scenarios, drawing on a framework for how the pandemic might evolve and interact with a wider range of global challenges and opportunities, and developed implications for business leaders.

The Omicron variant storylines in our scenarios centered on three questions: the nature of the virus; our capacity to prevent and contain its spread; and the susceptibility of populations, given vaccination levels and waning immunity. We considered the emergence of variants that are both more transmissible and evade existing vaccines.

Lessons for Omicron: Possible virus storylines to help with decisions.
A framework for possible virus storylines during Omicron uncertainty

As the WHO reiterated on Monday, early analyses of Omicron’s mutations suggest the potential for higher transmission than the Delta variant, more risk of reinfection, and a reduction in the ability of vaccines to prevent infection, serious illness and even death.

Conclusions may be discernible through genomic analysis and modeling in the coming days and weeks. More likely, it is only through accumulating clinical data over the next month on the speed of spread of cases, and their subsequent evolution into hospitalizations and deaths, that we will get definitive answers.

Given this predictable lag before clarity emerges, how should decision-makers react and prepare? The emergence of Omicron variant does not exactly mirror our scenarios, but several lessons are common. What follows are five ways for leaders to structure their decision-making and planning around Omicron today and in the coming weeks.

1. An upside scenario remains possible, for now

Even if Omicron outcompetes Delta on transmissibility and becomes dominant globally, anecdotal evidence of mild clinical outcomes offers hope that it may have no worse effects than earlier variants. If this proves true, Omicron’s lasting impact on the pandemic could be unexpectedly positive. In this scenario, the temporary Omicron crisis will:

  • Jolt more-vaccinated countries out of complacency regarding the need to push through to higher vaccination levels, with new incentives and mandates to reduce hesitancy, and inspire greater public support for containment measures like masking and distancing, that are needed until vaccination reaches the required critical mass.
  • Remind the global community of the shared risk that persists as long as developing countries remain largely unvaccinated, and therefore mobilize a faster roll-out of vaccines globally (as the IMF has called for), through donations, IP licensing and more coordination.
  • Justify continued government support for economies, building the case for a new era of activist government, applied science and technology, and stakeholder capitalism, as outlined in our Uplift Scenario.

This possible future is important not only because it may happen, but also because the mindset shift towards proactive, global collaboration on vaccines it requires stands across other, more negative scenarios.

2. All Omicron downsides are not the same

In our scenarios, we considered both a variant that is ‘just’ intrinsically more transmissible (i.e. a higher R0) and another that significantly evades current vaccines, and foresaw markedly different outcomes between the downside scenarios these two variant profiles create. A more transmissible but low vaccine-evading variant requires a Delta-plus strategy, i.e. we need to fully execute on what experts have been saying we need to do to combat Delta.

A genuinely vaccine-evasive variant on the other hand, requires a more radical rethink of the path forward. Some doomsayers suggest this sends us back to March 2020, and a near future of lockdowns and pervasive uncertainty, but we’re more optimistic. We can benefit from lessons learned on what not to do and pragmatic advances in best practice. We can use genuinely novel scientific and technological advances about how to contain and treat illness. And the rapid modifiability of mRNA vaccines to new variants sets a timeline for a return to the normalization made possible by vaccination, reducing overall uncertainty.

In either downside scenario, the onus on effective containment measures is high. Also, the greater focus on vaccines everywhere and for all - crucial in establishing the lowest risk scenario as most likely - is even more important here.

3. More severe Omicron scenarios may illuminate what’s really happening with inflation

Policy debates are raging regarding the true causes and thus the structural impacts of rising inflation in the rich world. ‘Team Transitory’ posits a set of global supply-chain focused factors as the root cause - zero-COVID measures reducing Chinese port activity, misplaced containers and ships, and bullwhip effects from rapid shifts in demand. Inflation bears, on the other hand, blame more national factors - the combined effects of monetary and fiscal stimulus, exacerbating a natural recovery in demand and tight labour markets - for producing more enduring price rises, and the dreaded ‘unmoored’ inflation expectations.

If a vaccine-evasive Omicron, were to force new lockdowns, we might see demand and supply constrained as they were in the early days of the pandemic in 2020. This may shed light on whether current inflation is truly demand- or supply-driven. If it is demand driven, inflation will decline, barring additional monetary and fiscal stimulus. If it’s supply-driven, new constraints on trade and supply chains that aim to protect public health, may drag it higher still. The specter of stagflation - the coincidence of recession and inflation - should be tracked and prepared for.

4. Omicron may pose heightened risk of unrest and conflict

A key risk to both our positive scenario and ‘better’ downside scenarios is that the collaboration and solidarity required is lacking. Recent renewed containment measures in Europe have been met in places with violent opposition. U.S. politics, already riven with conflict, is polarized by partisan takes on basic containment measures. Social media struggles to overcome its design bias towards extreme views. And the cost to bad actors of skewing public debates toward division and acrimony are minimal.

In this context, Australian virologist Ian McKay’s “mis-information mouse" is well-fed by a constant diet of bad COVID takes. Keen observers have noted that despite low vaccination levels, South Africa recently delayed additional deliveries of Pfizer vaccines, citing low demand. Even in the developing world, vaccine hesitancy is emerging as a more potent barrier to better outcomes than lack of vaccines.

Even in the developing world, vaccine hesitancy is emerging as a more potent barrier to better outcomes than lack of vaccines.

Mick Costigan, VP Salesforce Futures, Salesforce

In our scenario work, we also saw a vaccine-evasive variant as most likely to feed into ambient geopolitical tensions, heightening self-interested and non-cooperative behaviours, escalating blame and recrimination, and reigniting vaccine nationalism and favouritism.

For example, in countries experiencing a collapse of trust in government (exacerbated by pandemic-related measures), the sense of a secure and common future for all (a marker of civil stability) is eroded. The “fantastically broad” set of future scenarios that emerge could open yet wider, including the prospect of foreign-policy adventurism, to distract domestic audiences from their plight.

5. Robust strategies for right now

In our scenario work, we identified six robust strategies for business leaders. The new threat of Omicron underlines the first of these - helping to defeat COVID. This begins with ensuring protection for employees, customers and other stakeholders. Until we have clarity about Omicron’s exact risks, leaders must operate with an abundance of caution.

Travel restrictions of the sort introduced over the weekend are an attempt to apply this precautionary principle but largely fail because the virus moves faster than they can. Businesses can do better, by supporting proven public health measures like mask-wearing, regular testing and other distancing measures as appropriate.

Beyond direct stakeholders, we’ve seen that better short and longer-term outcomes begin with more collaboration and solidarity to vaccinate the entire global population and reduce opportunity for repeat waves of the virus.

Now is also the time for organizations to dust off contingency plans for downside scenarios discussed. With the possibility of a new period of exponential spread, they must heed the WHO’s guidance to react quickly - “speed trumps perfection”. To be able to operate at speed in the context of crisis, scenarios must be simulated and decisions rehearsed.

Omicron is undoubtedly a new crisis phase in the long pandemic. It is easy, and even forgivable for anyone to take a passive approach faced with yet another negative surprise. And yet, through proactivity, collaboration and decisiveness, courageous leaders can tilt the scale towards better outcomes.

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