By Lauren Lubetsky and Jewel Hou

Leaders have moved toward the extremes

As the COVID-19 pandemic took hold around the globe, one of the only things that seemed certain was that the landscape of business and society would change dramatically. In April, Deloitte published a set of scenarios for the World Remade, imagining what the mid-2020s might look like in the wake of the pandemic. These scenarios included:

• The passing storm: The pandemic is managed due to effective responses from governments, but has lasting repercussions which disproportionately affect SMBs and lower-income individuals.

• Good company: Governments around the world struggle to handle the crisis alone, with large companies stepping up as a key part of the solution.

• Sunrise in the east: China and other East Asian nations are more effective in managing the virus and take the reins as primary powers on the world stage.

• Lone wolves: A prolonged pandemic spurs governments to adopt isolationist policies, shorten supply chains, and increase surveillance. Social cohesion unravels.

Back in May, leaders debated which scenarios might become our future. In a May Deloitte Dbriefs webinar with nearly 9,000 cross-industry leaders, the audience was asked “As you reflect on the headlines from the last few days, which scenario do you believe we’re heading towards?” At the time, the respondents were roughly evenly split across the four scenarios.

In surveying a subset of the same audience in August, one finding stood out.¹ Participants of the resurvey tended more toward the extreme scenarios of “The passing storm” (33%) or “Lone wolves” (32%). “Sunrise in the east” (10%) was the least frequently cited scenario, regardless of industry sector.

Leaders gravitating toward both most pessimistic and optimistic scenarios
Percentages of leaders selecting one of the four scenarios as the most likely in May and August 2020

Sector differences in outlook

Unsurprisingly, responses vary significantly by sector, with technology sector leaders citing “Good company” (in which large companies—particularly those in the tech sector—lead the way through the crisis) as the most likely future scenario. Banking and capital markets sector leaders were among the most pessimistic, with 43% of respondents believing we are heading for a “Lone wolves” scenario.

Leaders’ outlooks largely depend on the primary sectors in which they operate.
Percentages of leaders in technology and banking and capital markets sectors indicating the most likely scenario for their businesses

Uneven positions on the recovery journey

When asked which phase their organizations were in as it pertains to their recovery journey (Respond: Managing continuity; Recover: Learning and emerging stronger from the crisis; or Thrive: Preparing for the next normal), the majority (56%) indicated that they were in Recover mode, with the rest split between Respond and Thrive.

Organizations varied on their positions on the pandemic recovery journey, with the majority indicating “recovery” as the current focus
Percentages of organizations in each phase of the recovery journey

Again, responses varied notably by sector, with telecom, media, and entertainment sector leaders standing out as faring well in dealing with the pandemic—half (50%) indicated they are in the Thrive phase. On the other hand, relatively more power and utilities businesses (40%) and government leaders (36%) appear to be still in the Respond phase, with only 10% and 7% respectively reporting they have moved on to Thrive.

A shift in business priorities

While leaders may hold different perspectives on recovery phases and future outlooks, there have been common shifts in business priorities. Across industry sectors, a vast majority of leaders agree their digital transformation has been accelerated as a result of the crisis (85%) and has brought about a need for new methods of customer engagement (82%). For 60% of leaders, the crisis will bring about a significant change in their business strategies. While leaders don’t agree on what the next normal will look like, many are doubling down on certain no-regret moves that will allow them to better react to the changing situation regardless of which future scenario comes to pass.