What will the 'next normal' look like? Challenges and opportunities ahead. (McKinsey and Co.)

This week, we try to imagine how the coronavirus will usher in a “next normal,” and what that could look like. Plus, Africa’s infrastructure paradox, and reading picks from Dilip Wagle, a McKinsey senior partner. Pace yourself. Dealing with the coronavirus pandemic is not a sprint, it’s a marathon. How many times have you heard officials say that? How many times have you thought it yourself?Things are changing continually and quickly, but one thing is clear: this could be the most abrupt shock to the global economy in modern history. Even in a relatively optimistic scenario, all countries would experience sharp GDP declines in the second quarter, most of which would be unprecedented for people living today. Consumer discretionary spending could tank, especially in areas subject to shutdowns. Expect a rocky second quarter. While increased government spending can help offset some of the economic impact—and a centralized response system can help governments manage this crisis—it is unlikely to offset the effects rapidly enough. China’s annual GDP growth could end up roughly flat, wiping out the 6 percent growth we expected just three months ago. And the world economy overall could see a decline in GDP at an annualized pace of 25 to 30 percent in the second quarter. Looking ahead. In the near future, we will see the beginning of discussion and debate about what “the next normal” could look like after this crisis ends. A shock of this scale will create a shift in the preferences and expectations of individuals as citizens, as employees,and as consumers. These shifts and their impact on how we live, how we work, and how we use technology will emerge more clearly over the coming weeks and months. Returning businesses to operational health after a severe shutdown is extremely challenging. Most industries will need to reactivate their entire supply chain, even as the differential scale and timing of the impact of coronavirus mean that global supply chains face disruption in multiple geographies. The weakest point in the chain will determine the success or otherwise of a return to rehiring, training, and attaining previous levels of workforce productivity. Leaders must therefore reassess their entire business system and plan for contingent actions to return their organization to effective production at pace and at scale.The aftermath of the pandemic will also provide an opportunity to learn from social innovations and experiments, ranging from working from home to large-scale surveillance. With this will come an understanding of which innovations, if adopted permanently, might provide substantial uplift to economic and social welfare—and which would ultimately inhibit the broader betterment of society, even if helpful in halting or limiting the spread of the virus.For more on leading through the coronavirus crisis, go here.