Jared Diamond at GEP event: Ditch just-in-time supply chains and plan for crises with ‘constructive paranoia’

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GEP’s Innovate 2020 conference on Tuesday morning included a keynote address from Pulitzer Prize-winning author Jared Diamond, who sized up that the world is in a crisis — from the COVID-19 pandemic to the ongoing social unrest — but who offered two specific ways that companies can heed history and come out stronger at the end.

Be prepared, he said, and also hone face-to-face communication skills even while using technology to work remotely.

As the author of the books “Guns, Germs and Steel” and “Upheaval,” Diamond provided key historical insights into how organizations can work through this period of turmoil.

Diamond defined a crisis as a “situation in which a person or the world is forced to recognize our usual problem-solving methods aren’t working.”

More coverage: For more GEP Innovate 2020 coverage, read our article from yesterday's kickoff address. 

Look to history for answers

While the majority of discourse around the past few months has been calling 2020 an “unprecedented time,” Diamond shared historical points that prove these aren’t unprecedented times. Diamond said the black plague, which killed nearly one-third of the population, ended up bringing benefits to Europe and its economic, social and political systems.

COVID-19 isn’t that different. Rather, it is just new.

Diamond pointed out that COVID-19 has spread much faster than the black plague (due in large part to faster air travel). Also, no country is immune to the coronavirus. Whereas the plague was more confined to Europe, with globalization and travel, it was easier for COVID-19 to spread.

Despite these new challenges making COVID-19 a different kind of threat, Diamond modeled historical instances to impart lessons about how companies can learn from this crisis to become stronger in the long-term.

The first strategy is to think like a Boy Scout — be prepared.

Diamond said countries should’ve expected a new emerging disease to threaten the world. Countries like Vietnam used the SARS scare from the early 2000s to plan for the prevention of the spread of the virus. In contrast, countries like the United States stopped preparing for a pandemic to cut costs and save money.

Instead of this model, Diamond advised listeners to practice “constructive paranoia” and build a safety margin. He advised companies to start thinking about stockpiling and building inventories rather than practicing just-in-time inventory like supply chain trends have been leaning toward in recent years.

“Help your clients with disaster planning,” Diamond said. “Think of constructive paranoia. Help your clients think of everything that could go wrong and plan for everything that could go wrong. Tell your clients not to save money by abolishing their stockpiles, but to consider what to stockpile and how much to stockpile.”

The second piece of advice Diamond imparted to GEP attendees was to not forget the importance of face-to-face communication. For years, there has been increasing use of technology to communicate and work with others. With COVID-19, Diamond said this is clearly not going away anytime soon.

Zoom and remote working does provide some benefits like increased productivity and decreased travel time. However, there are clearly disadvantages, like people being worn out from online communication, higher chances of misunderstandings and the challenges of integrating new team members.

Again, Diamond pointed to history to show that while it’s new, it’s not unprecedented. Since the earliest times with the invention of writing, humans have adapted to learning new social skills and cues without being face-to-face. In one moment it was writing, the next the telephone, and now, it’s online communication.

Diamond recommended companies set up training to get people more acquainted with communicating over technology. As long as people don’t lose the key social skills, companies will have a competitive advantage. He also said it’s important to bring in other team members to provide different perspectives and interpretations of things.

“COVID-19 seems to be a new situation for the world, but it’s a situation with precedence,” Diamond said. “For thousands of years of human history, we’ve been sizing up people face-to-face. Within our lifetimes, most of us have been losing those skills. But, they’re skills that can be acquired or practiced.”

Diamond said that by building safety margins and stressing the importance of face-to-face communication, companies can come out of this stronger and more equipped to deal with future crises.

Diamond argued that companies that do set up these kinds of initiatives will have a better competitive advantage once the world gets out of the COVID-19 crisis.

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