Wharton@Work

April 2020 | Management

Managing Business and Financial Uncertainty in a Crisis

Between 2011 and 2017, there were over 1,300 epidemics around the globe, according to the World Health Organization. An epidemic is an unusually high number of cases occurring in a locality affecting hundreds or thousands of people, as opposed to a pandemic, which typically spreads across countries and potentially affects millions. 36 of those epidemics were in the United States. “People think they’re rare occurrences. That’s wrong. They are as frequent as major hurricanes and earthquakes,” says Wharton professor of international management Mauro Guillén. “But we don’t take them seriously enough.”

Think about how California continues to prepare for earthquakes: building code changes are making structures more resilient; early warning systems are being built; and individuals are being advised what to have on hand and what to do before, during, and after a quake. “We need to do the same with biological threats,” says Guillén, author of the forthcoming 2030: How Today's Biggest Trends Will Collide and Reshape the Future of Everything.

Guillén is directing a new class for Wharton and Penn students that provides a 360 degree view of threats like the coronavirus outbreak. Epidemics, Natural Disasters, and Geopolitics: Managing Global Business and Financial Uncertainty mines faculty’s breadth of expertise to help current and future leaders learn from the current crisis and prepare for the next one.

“Unfortunately, this is a teachable moment,” he says, “and these events are becoming more frequent. If the new normal is to have a crisis every two to three years, we have to be prepared with the right skills and frame of mind to deal with them. Risk is a component, but it’s more than that. With risk, you can calculate the odds. The crises we are experiencing have brought a new level of uncertainty. We need to get used to it and understand better how it is reflected in the markets and in the decisions leaders, consumers, and others are making every day.”

The goal of the new course is comparable to that of the Executive Education offerings Advanced Management Program and Executive Development Program — both of which include sessions with Guillén. They draw from a wide range of viewpoints and expertise, providing participants with the knowledge and skills needed to lead effectively under uncertainty.

Guillén says both macro- and micro-ramifications of the current emergency will be explored. “We want to convey a sense of the scale and scope of the pandemic. With finance professor Jeremy Siegel, we will think about why the markets are responding the way they are. With Ezekiel Emanuel [chair of the University of Pennsylvania’s Department of Medical Ethics and Health Policy and a former Obama White House health advisor], we will learn about the nature of the pandemic in medical terms.”

Other sessions include learning how to manage virtual teams, and how the relationship between the U.S. and the rest of the world may change. “Borders are coming back,” says Guillén. “What will that mean for trade and the global economy?” The pandemic’s effect on the workplace is considered in sessions on emotional contagion, remote workers, and more.

Ultimately, says Guillén, leaders must think on both sides of the spectrum — a point of emphasis in the new course and in the Advanced Management Program and Executive Development Program. “Right now, decision makers are working on the next 24 hours and the next week. Simultaneously, though, they also need to plan for the moment when the economy recovers and this pandemic is behind us. Leadership has always been a tough balancing act. The current pandemic is just an extreme version.”