CEOs and other senior leaders are grappling with a strategy conundrum created by the coronavirus crisis: how to make high-stakes decisions with long-lasting impact when uncertainty is so extreme that accurately predicting the future is impossible. To help navigate this challenge, we defined four possible scenarios in this article and shared a scenario planning process that enables leaders to explore a broad range of potential futures quickly, identify no-regrets moves, and design robust future-proof strategies — all while aligning leadership teams on a shared context for decision making.

Clarity from Complexity

Scenario planning brings clarity to the unprecedented complexity we are currently experiencing. It aligns teams around a shared context and enables swift action. What follows are emerging insights from our scenario planning so far, as well as an update on how the likelihood and direction of each possible scenario is unfolding. Let’s begin with three core findings:

1) All four scenarios are plausible, relevant, and worthy of consideration. The scenarios pose conditions that businesses may be forced to contend with in the future. While we are currently living in the chaotic and unpredictable world of Fits and Starts, each of the other three scenarios could come true by the end of the year. Below, we explore the four scenarios and the evidence for each of their emergence in more depth.

2) Implicit “bets” on a single future are widespread. At the start of the process, many teams conclude that their strategies are best suited for a single scenario, despite recognizing that the likelihood of that future occurring is low. That is, they are preparing for a set of conditions that they know won’t come true. This has served as a great motivator to quickly identify which activities to start, stop, and continue based on the changing conditions.

3) Every company has no-regrets moves they can make immediately. After identifying winning strategies for each scenario, teams have quickly aligned around a set of robust choices across all of the scenarios. In most cases, these moves are closely aligned with purpose and can be made without significant up-front investment.

Teams have reported that using the toolkit has brought them a sense of agency, hope, and possibility because it’s allowed them to position their company for a post-coronavirus world proactively. We’ve been impressed with the quality of solutions being developed in a relatively short period.

The Evolving Scenarios

The scenarios initially drafted on March 20, 2020, center around two uncertainties: how well the public health crisis is managed and the economic impact of coronavirus. While these remain the most critical uncertainties, their second and third-order impacts – including public responses, business innovation, and political implications – are beginning to visibly shape our current reality.

1. Gradual Recovery

Gradual Recovery is no longer the “official” future. In other words, it is not the scenario most companies are expecting. That said, despite record stock market drops, unemployment spikes, and prolonged social distancing, we believe this scenario is still plausible. Recent rebounds in the stock market, state-by-state death-count model revisions from the Institute for Health Metrics and Evaluation at the University of Washington, and a set of best-case conditions coming to fruition, all suggest that a Gradual Recovery still has potential.

For the Gradual Recovery scenario to be plausible, you’d need to believe the economic free-fall will quickly spring back as soon as the pandemic fades. That could happen if social distancing works, hospitals are not over-run, ventilators are produced, drugs are created, and government financial stimulation is effective. This scenario would also require that society “re-opens” before a vaccine is ready. No company should bet exclusively on this scenario, but discounting it entirely could reduce the strategic option set available when the recovery occurs.

2. Fits and Starts

Fits and Starts represent the scenario we are in right now. It’s nicely described in this New York Times opinion piece, that talks about “Balkanized normality” and living life at half-capacity. The scenario envisions a geographic and temporal patchwork of spread, containment, and economic recovery. The uneven impact of this scenario also applies to class (white-collar workers suffer less than frontline workers), age (older people suffer less than youth), and industry (retail, travel, and restaurants suffer more than financial services, pharma, and tech). The second and third-order impact of this balkanization could have a lasting impact around the globe, which was divisive even before the pandemic.

The Fits and Starts scenario envisions a world in which the societal conversation continues to revolve around what data to trust, which curves are flattening, and what the best strategies are for containment. Bridgewater Associates founder and hedge fund manager Ray Dalio does an excellent job of describing this lack of trust in data, which makes short and long-term decision making, planning, and investment challenging.

3. The Perfect Storm

In the Perfect Storm scenario, the public health crisis persists, and we experience an unprecedented, prolonged, worldwide shutdown. The impact is more significant for developing nations, who are already under stress. This could raise substantial national security concerns, a topic rarely discussed right now in mainstream circles.

The dreaded Perfect Storm fills newspaper headlines and causes fear among many. Many wise commentators believe it’s coming. In his annual shareholder letter, which typically offers more optimism and hope, JP Morgan Chase CEO, Jamie Dimon warns of a “bad recession,” combined with “financial stress similar to the global financial crisis of 2008.”

Dalio suggests a similar doomsday, saying, “I believe that the health, economic, and market impact of the coronavirus will be much greater than most people are now conveying.” He goes on to say the impacts of a pandemic might be “so bad that conveying them accurately could provoke panic.”

In a recent Guardian article, the World Trade Organization warns that continued tensions between countries like the United States and China could shrink global trade by 32%, in line with drops seen during the Great Depression.

Imagine nationalism rather than a global collaboration driving policy. Beyond finger-pointing and name-calling, this scenario envisions walls stopping the flow of supplies, medicine, and solutions. A Perfect Storm scenario points to the reality that, even once the virus is contained, we’ll face unprecedented joblessness and bankruptcies, with recovery lasting years.

4. The Great Correction

The Great Correction imagines some big winners (and losers) from the crisis and the various ways we are responding. The pandemic will result in a rise of telemedicine, an increased appreciation for science, even more power yielded to technology companies, and widespread acceptance of telecommuting.

The Great Correction also sees a global awakening, giving way to more collaborative, responsible, and balanced societies. Explore some of the “inevitable” shifts in Politico’s essay, and Tim Lebrecht’s the Great Reset, where he describes a recent virtual gathering of 450 leaders where 80 percent responded “yes” to the question, “Will humankind seize the pandemic crisis to make the world a better place?”

To imagine the fullest instantiation of this scenario, read Charles Eisenstein’s essay, which begins with a provocative question that defines the Great Correction. “For years, normality has been stretched nearly to its breaking point, a rope pulled tighter and tighter, waiting for a nip of the black swan’s beak to snap it in two. Now that the rope has snapped, do we tie its ends back together, or shall we undo its dangling braids still further, to see what we might weave from them?”

In essence, could the coronavirus accelerate our path away from a set of broken work habits that are bad for individuals, the environment, and the sustainability of the world? While most businesses we’re working with aren’t putting all of their eggs in this scenario basket, they are considering the lasting effect of the compassion, collaboration, and agility we see today.

How could business models and priorities fundamentally shift? An entertainment company wonders whether the compelling narratives that sell movies will be different; a healthcare provider wonders whether disease prevention requiring widespread compliance will be easier. Workers wonder whether workaholism can be replaced with essentialism?

Thriving in the Pandemic

We don’t get to choose what the future will be, and we almost certainly can’t make accurate predictions at this point. But our experience guiding leaders through this process demonstrates that having a plan for each of these scenarios ensures a high level of preparedness.

If you’ve rehearsed the future, as real-world events unfold, you’ll be better prepared to understand and take advantage of them while effectively working together on opportunities no one else can see.