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Two Years Ago, I Warned You About The Coming Pandemic; Today I Am Warning You About The Fallout From Ukraine

Mar 25, 2022

In February 2020 – two years ago last month – I wrote a column for Forbes entitled “Stop Lying To Yourself About The Coronavirus.” The United States had just reported its 35th known case of Covid-19 the day before, and there were still no known deaths from the coronavirus in this country. That wouldn’t come for another week. There had been one death in Europe a week before, but the victim had been a traveler returning from Wuhan. Few people I knew expressed more than mild concern about what was still perceived as a Chinese problem.

However, in my piece, I warned that global supply chains would be disrupted, that economies would be put under enormous stress, and that every business would have to deal with the impact of what was not yet even recognized as a pandemic:

… too many companies are still taking a wait-and-see attitude to the coronavirus.

Maybe this will all blow over by March, a lot of CEOs are telling themselves right now. Let’s not overreact. Let’s not get everybody worried for nothing.

That’s to be expected, of course, because it’s human nature. It is easier to take refuge in comforting lies than it is to embrace hard truths. But leadership – real leadership, effective leadership – is about doing just that, because confronting challenges is the only way to overcome them.

Today, the same thing is happening. This time, the reality that leaders are struggling to face up to is the war in Ukraine.

This is only the beginning

Russia’s invasion of Ukraine is an unmitigated disaster – one that is only just beginning to unfold, and one which will have serious and far-reaching consequences for every country and for every company in the world.

Beyond the obvious and horrific human costs, this war is going shake the very foundations of the global economy. As I write this piece, the U.S. and U.K. have just announced a ban on Russian oil and gas imports. That will raise the price of fuel worldwide to levels we have never seen before, disrupting whole industries in the process – starting with the major oil companies, which have seen their business plans ripped apart in the past week. This will increase already high shipping costs and create additional supply chain disruption.

Ukraine is also one of the world’s leading producers of wheat, and the loss of its harvest is going to pour gasoline on an already serious situation. Food supplies were already under pressure from pandemic related disruptions, and we will now see skyrocketing food prices around the globe. This will make it extremely challenging for some countries to feed their people, leading to civil unrest in parts of the developing world. Even in rich countries, middle- and lower-income consumers will find themselves increasingly stressed financially. That will impact their ability to buy other goods and services while also turning up the volume on already shrill domestic political debates.

Then there are the refugees. Two million people have already fled the fighting in Ukraine, and while European nations have generously taken them in, their presence will put further strain on economies, social services, and health care systems already strained to the breaking point by the pandemic.

Moreover, while the war is currently confined to the borders of Ukraine, it is unlikely to remain so for long. Western intelligence analysts say Russia is already preparing massive cyberattacks in retaliation for the sanctions imposed on it as a result of its aggression against the Ukrainian people. Corporations will likely face crippling attacks, and the internet itself could be targeted.

Finally, there is the very real prospect of World War III.

Leaders need to think the unthinkable

The first draft of my piece on Covid-19 called the coronavirus an existential threat to every business. However, a couple of readers told me they thought that was needlessly hyperbolic, and so I took that out. It is a decision I still regret, and I kept a copy of that draft to remind me not to do it again.

That is why I am being less restrained in my assessment of the current situation. And I am not alone: many experts with better insights than I have into the mind of Vladimir Putin and the situation on the ground have offered similarly bleak warnings.

“... if anybody thinks that Putin wouldn’t use something that he’s got that is unusual and cruel, think again. Every time you think, “No, he wouldn’t, would he?” Well, yes, he would,” one of America’s top Russia experts, Fiona Hill, cautioned last week in an interview with Politico. “We have to prepare for those contingencies and figure out what is it that we’re going to do to head them off.”

Others have warned that even a Russian defeat in Ukraine will create serious and long-lasting consequences for the world.

“Even if Putin loses his grip on Russia, the country is unlikely to emerge as a pro-Western democracy. It could split apart, especially in the North Caucasus. Or it could become a nuclear-armed military dictatorship,” Liana Fix and Michael Kimmage wrote in Foreign Affairs. “Policymakers would not be wrong to hope for a better Russia and for the time when a post-Putin Russia could be genuinely integrated into Europe; they should do what they can to enable this eventuality, even as they resist Putin’s war. They would be foolish, however, not to prepare for darker possibilities.”

So, just as I urged leaders two years ago to start thinking about the many ways in which the coronavirus might impact their businesses, I am urging you today to take a hard look at your strategies and plans in light of these new events.

The questions you need to ask today

When you do, ask yourself – and your team – these questions:

1. How will rising fuel and food prices impact our business?

2. How will inflation impact our sales?

3. How vulnerable are we, and our business partners, to Russian cyberattacks?

4. What would we do if the internet went down?

5. How might the movement of people in Europe impact our operations?

6. How can we modify our plans and strategies to make them more resilient to these threats and ensure they still succeed?

7. What contingency plans should begin preparing right now in case they fail?

And let’s not forget about the pandemic. It isn’t over yet either.

 

Originally posted on Forbes

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