Leading Through Crisis
A conversation with Peter Schwartz, noted futurist and Senior Vice President of Strategic Planning at Salesforce.
May 6, 2020
We sat down with Peter Schwartz, an internationally renowned futurist, for a fascinating conversation covering leadership skills under crisis, possible scenarios for a post-COVID world, and more. Below is a transcription of our dialog, edited for length and clarity.
Peter, it’s great to have you here for a Signal conversation. I couldn’t imagine a better time to be talking to someone with your experience. Given your long career, how do you describe what you do to someone who just casually asks at a dinner party?
First, I just want to say hello to all my friends at Procter and Gamble. I wish everybody really well in this moment of crisis. I basically describe myself as a futurist. I help people make better decisions about the future by seeing the future first – being able to see what may be coming down the road so you make better choices today.
I work with our senior leadership on several things. I help them see the future: where our products are going, where the markets are going, where competition is going. What are our major acquisitions, what are our major big product leaps? I did the artificial intelligence strategy, the voice strategy. I was involved in some of the big acquisitions like MuleSoft and Tableau. I spend a lot of time sharing our view of the future with customers, and I get involved occasionally some outside projects for Salesforce. I do a lot of work on sustainability, I do a lot of work with the World Economic Forum.
One of the most flexible tools in your toolkit as a futurist is scenario planning. Can you explain what that is?
Scenario planning is a way of trying to anticipate where the future is going. Not try to predict it, but look at several different possibilities, understand the forces that are creating the future, and then make better choices today by understanding your risks, understanding what are the opportunities, and what are the consequences of the choices that you make. It’s a tool that for exploring the future and making better choices today.
We are in now a phase that you call “the crisis phase” – we’ll get to the other phases in a minute – but it’s this crisis phase where scenario planning shines, no?
Well, I’ve been doing this since 1972. I started my career at Stanford Research Institute in the early 70s, and this is the moment of greatest uncertainty that I have ever experienced in the last half century. Everyone is facing enormous uncertainty, and scenario planning gives us some tools to give us some structure and order to that uncertainty.
The goal is not prediction, but better decisions; so the psychology of the decision makers is what’s really important. Getting the future right – if you have multiple scenarios – is the easy part. The hard part is getting anybody to actually do anything – and that means understanding the psychology of the decision maker.
First, you have to give the decision maker a scenario they already believe, and once they’ve got that, they say, “Oh yeah I’ve got that, I think that’s very likely;” then they can think of other possibilities. When I was head of scenario planning for Shell, I spent 30-40% of my time understanding the mindset of the senior management. I spend a lot of time at Salesforce understanding how (CEO) Marc Benioff thinks, how the other leaders in our company think.
So leaders can start to see a scenario starting to play out, and feel ready to react?
I tell people that after you do scenarios, you are going to read the newspaper differently, and things will leap out at you. You say, “Oh we thought about that scenario a year ago or two years ago and now I see it in the headlines.” It happens to me all the time. In fact, we often ask people to try to imagine the newspaper headline that they might see in several years’ time as a scenario plays out.
I know you have been called upon lately by a lot of important people in critical leadership positions: governors, heads of state, CEOs. Are there consistencies in advice that you give them in terms of how they manage through these turbulent times?
Well, in this case yes, because we are all facing something very similar. Right now we are in a crisis mode, and everybody is basically focused on survival. How do we get through this, how do we get our employees, our customers, our shareholders all of this our communities through this time?
But I am also saying: Look, there’s going to come a time before too long when you are going to see the beginning of turning the corner. I said to (California governor) Gavin Newsom that the people of California are going to want to hear from you on what’s the new California, what is your vision, what do we take with us into this new future that came out of the crisis.
When the crisis started, we entered a new world. The future that was there before is gone. It’s very important for leaders to help define that (new) future, we have a lot of choices to make. We’ve learned a lot about how do we work, how do we shop, how do we learn, how do we provide help. I said to the governor, look, do you want to ask the people of California: Did you like working at home? Did you like having your family at home? Did you like not having traffic, having clean air? What do we want to take with us into that future? There’s a huge opportunity for leaders to actually articulate a vision coming out of the crisis, and provide people a sense of hope for a kind of new future. The old one is gone.
I love the examples you used with Governor Newsom: Do we want cleaner water, cleaner air, less traffic? I think the answer broadly is yes, but how? For leaders across industries, the question seems to be: what can we imagine can be different after this crisis, are there some consistent answers to that question across industries?
I think it varies a lot by industry. For say, tourism, business travel, we’ve all learned that maybe we don’t need to go to the office, maybe we don’t need to make that trip across country. Will we want to be in a metal tin can sitting next to other people whose health status we don’t know?
Yesterday I was talking about my good friend Esther Dyson, one of the mavens of the tech industry, and she says for the first time in her life she doesn’t have jet lag, and she doesn’t expect to get it again. Tourism isn’t going to come back very quickly. Lots of people now are going to be a little wary of mass transit, so will we see a spike in auto sales as a result? Maybe people who could only afford mass transit before now pay a bit more for a car; might that mean low-end cars will sell very well?
Retail, clearly we’re going to see massive change in how retail is done. We’re all now shopping from home. What will bring people back to the store? That will be about entertainment rather than about buying, right? The experience of it. There is going to be an enormous wave of innovation in retail that will get people experiencing products and services in a new way.
I want to get back to the three phases of this period. There’s the crisis, where we are presently, and you discussed what might be called a transition phase, and then a new world. Can you tell us a little bit about those three phases?
Well the important question is how long and how deep is the crisis, and that’s very much a function of two variables.
First, what happens with the disease itself? Are there second waves; does immunity actually hold; do we get a vaccine? There’s uncertainty about how long the impact of the virus will be felt.
And then secondly there’s uncertainty with respect to economic response. Does policy actually turn out to be effective in avoiding the worst economic consequences? I’d say the (shortest) possible timeframe is the next three months, and a fairly deep recession; the worst is 18 months and a fairly deep depression. So there’s a range in terms of how long crisis will persist. And the truth is, things are going to be different in different places. California moved early so California may come out of the crisis early. Florida is just getting started, they’re going to be late.
Governor Newsom has announced a “western states alliance” with Oregon and Washington, and I find it interesting – the role of governors in a federalist country like ours. Might we imagine a scenario where you have passports from regions, as opposed to countries, so that you can travel from Florida to California, but only if your passport says that you are COVID negative?
Well it won’t be your passport; it will be your smartphone. And like in China it will show you are a legitimate traveler, because you’ve got immunity, and you can go freely. You already can’t fly to Hawaii without going into quarantine period.
Once we’re past crisis, there’s what you call transition…
So the transition could begin as soon as three months from now and as late as 18 months from now, so that’s an important uncertainty. And basically there are several important signals. Do we have the disease really under control? The best way is with a vaccine and treatment, so that’s the clearest signal. Data that supports transition include drastic falling death rates, drastic falling infection rates, etc.
Then, do we have kind of the right economic stimulus, that actually puts things in motion. What we’ve done so far is basically filling in the hole of lost economic activity. Now we need to get it cranked back up. Big infrastructure programs are ideal for that purpose. There’s lots of opportunity to do that sort of thing and I think that is what will happen.
Then the interesting question is what is that new reality that we’re living in, how much of what has happened here shapes the world to come both at a local level and at a global level.
What kind of mistakes have you seen leaders make in situations like the ones we find ourselves in now?
I think the worst thing a leader can do is provide false hope. Giving accurate information on the realities, being maximumly transparent is most important – it’s treating people with respect, assuming that if they are well informed, they will make good decisions. I think that is absolutely critical, and if you undermine credibility by providing false hope than the value of leadership itself is undermined.
One last question for you related to Procter & Gamble: What advice would you have for leaders at P&G as they take on the challenge of this current crisis?
First of all, I’d emulate what Marc Benioff does. He communicates intensely to our people. Two other things: This is a remarkable opportunity to innovate, innovate how we interact, innovate how we reach our customers, innovate in our business models.
And third – the most important in many ways – is to connect with your customers. This is the moment to over communicate with your customers, connect with them, they want to hear from you. Everybody is in this fragmented world of disconnection, so you want to reach out to make sure they understand they’re in your community, and that we are all in this together. That will pay off huge after the crisis.
Peter thank you so very much for joining us at Signal. I look forward to talking to you again.
My pleasure, John. Always great to get together with you. And best to P&G.