This special COVID-19 issue of McKinsey on Risk is written by experts and practitioners across McKinsey and prepared by the firm’s Global Risk Practice.
This publication offers readers insights into value-creating strategies and the translation of those strategies into company performance.
The word “unprecedented” comes easily to mind when we think of the COVID-19 pandemic, but it is worth recognizing that the world has been through far worse shocks. The 20th century was filled with horrendous trials, including a more-deadly pandemic coming on the heels of the First World War. For almost all of us, however, the present crisis is unprecedented. Whether you are 20 or 70, the past several months has brought health fears and economic uncertainty as never before. For too many, the virus has brought tragedy.
The pandemic is, above all, a humanitarian crisis. The great majority will survive the physical trial, but the society to which we are returning—much of it having been shuttered for the duration of the fight—will be in need of repair. Our compa nies and institutions face deep financial and business uncertainties. Hundreds of millions around the world are unemployed, most having lost their jobs suddenly as a growing economy was abruptly closed.
Leaders have had to keep employees and staff safe while making crucial decisions on operations and budgets. On the near-term horizon, a recession looms. Signals of its duration and depth remain partly obscured by the ongoing public-health struggle. An emerging characteristic, however, is that the shock has altered customer behavior and will work transformative changes into business models. To thrive in the next normal, organizations will adapt or decline.
Through the crisis, McKinsey has been working with the world’s leading organizations to sustain lives and rebuild livelihoods. As the public-health dimension of the crisis is addressed, the transition to the next economy, some contours of which were visible before the pandemic, is set to accelerate. McKinsey’s Risk Practice has been in the center of the strategic thinking needed to address the challenges. In this compendium, we present some of our most important discussions on the COVID-19 pandemic and its many adjacent issues.
We have arranged the discussions in four chapters. Articles in the first two (“Understanding the crisis” and “Resilience through the crisis”) delve into the nature of the crisis in its several dimensions and dissect what leaders must do to prepare for and operate in a dramatically changing environment. The underlying theme of resilience through the crisis and its aftermath unites considerations for boards and top management. The array of crisis-driven topics include workforce security, customer continuity, approaches to reopening, new questions of globalization, the role of government support, the balance between profits and cash flow, banking resilience, M&A, and cyberrisk.