Two life-changing questions triggered by the pandemic: Pre-vaccine or post-vaccine pandemic control? Explosive growth or perennial survival?
Introduction
I previously wrote about the importance of framing life-changing questions. As we head towards the close of the year, two pieces of news triggered me to think about how I should go about setting life objectives.
The first was prompted by news about vaccines development. A random conversation with a friend made me rethink which might be the better course for a government: to be the best in pandemic control pre-vaccine or post-vaccine?
Facebook’s anti-trust suits triggered the second question. I looked at the alternatives of slow growth companies that have survived hundreds of years, even a millennium. The question that came to my mind is: should I go for explosive growth or perennial survival?
Pandemic containment: pre-vaccine versus post-vaccine
The talk for the past week has been of the various COVID-19 vaccination procurement programmes governments around the world are putting in place. Canada was reported to be procuring sufficient vaccines to cover its population five times. Australia stopped the development of domestic vaccines and instead increased procurement of overseas vaccine that could cover its population 5.6 times.
Whilst catching up with a friend from mainland China, we covered the same topic. She used to be a medical doctor specializing in cardiology before switching to the more lucrative financial services. I mentioned news stories reporting that China is even testing vaccines on 3 year-olds in the last leg of clinical trials. She expressed much reservations.
Efficacy verification
She explained that the Chinese vaccine, based on the traditional technology using an inactivated virus, takes longer to produce compared to those based on the mRNA technology adopted by BioNTech and Moderna. Moreover, given the low infection rate in China, it would take a much longer time for the efficacy of these vaccines to be ascertained. She has friends in high places who had received the vaccines and were able to travel all over China on business trips. However, she was not able to conclude decisively if they were protected because China successfully contained the pandemic, or whether it was because the vaccine was effective.
In contrast, European countries and the USA continue to experience new highs in the number of infections. To her, these are the best environment to test the effectiveness of vaccines. Control groups can be set up naturally without requesting patients to take risks they would not have otherwise taken.
To be or not to be …
This set me thinking: the countries best placed in controlling the pandemic pre-vaccine might not be the same ones which best control the virus post-vaccine. In fact, being good in the former would likely hinder a country from being good in the latter. Other than the ready environment for testing for vaccine efficacy, countries with higher infection rate AND effective vaccines would also be closer to building herd immunity.
This gives rise to the first of two life-changing questions: should a country aim to be best in virus control pre-vaccine, or post-vaccine?
Surviving crises versus growing at all costs
The pandemic has accelerated the adoption of remote technologies by a large group of the networked population. Zoom, a previously unknown company, has become a byword for video conferencing, within the span of 6 months. Business growth went off the charts and the company is now worth more than ExxonMobil.
However, another technology company hit the headlines this week for a different reason. Facebook was hit with antitrust lawsuits by 46 states in the USA. This prompted renewed talks of the breakup of Facebook, though it barely made a dent in its share price. In the space of 16 years since its founding in 2004, Facebook has grown so much that lawmakers are concerned of its monopolistic powers.
Oldest companies
That prompted me to look up the oldest companies in the world. Visual Capitalist has a great infographic on the oldest company in (almost) every country.
Even more informative is Wikipedia’s entry on the oldest companies in the world. Instead of listing the oldest company in each country, it looked back in time for the oldest companies in existence. It cited a 2008 report by the Bank of Korea. This found that of the 5,586 companies that are older than 200 years old in the 41 countries studied,
3,146 (56%) are in Japan, 837 (15%) in Germany, 222 (4%) in the Netherlands, and 196 (3%) in France.
I find that an amazing statistic: more than half of the companies older than 200 years old are of Japanese origins! However,
Of the companies with more than 100 years of history, most of them (89%) employ fewer than 300 people.
Different objectives
A New York Times article profiled a small Japanese company selling mochi, a Japanese rice flour cake, that had been in business for more than a thousand years.
Priceonomics did an even more in-depth piece about Why Are so Many of the World’s Oldest Businesses in Japan? It cited the study of Dutch business theorist Arie De Geus:
1. Long-lived companies were sensitive to their environment [and] remained in harmony with the world around them.
2. Long-lived companies were cohesive, with a strong sense of identity. No matter how widely diversified they were, their employees (and even their suppliers, at times) felt they were all part of one entity.
3. Long-lived companies were tolerant [and] generally avoided exercising any centralized control over attempts to diversify the company.
4. Long-lived companies were conservative in financing. They were frugal and did not risk their capital gratuitously.
Legal adoption
More specific to Japan, the article also cited Vikas Mehrotra, a researcher who has traced business-motivated adult adoptions in Japan. Mehrotra found that:
… in cases where there is no son to inherit a business, or where a Japanese CEO “desires a better quality son than nature provided,” an heir is legally adopted. For centuries, Japanese business owners have engaged in this practice. … this practice has “rendered Japanese family firms more professionally managed than their peers elsewhere.”
Survival versus growth
The last of the two life-changing questions I asked myself while I was reading about these Japanese oldies and Zoom is: for this company of one, should I choose to go the way of perennial stability as in the company profiled in New York Times:
By putting tradition and stability over profit and growth, Ichiwa has weathered wars, plagues, natural disasters, and the rise and fall of empires. Through it all, its rice flour cakes have remained the same.
New York Times, 2020 Dec 3rd: This Japanese Shop Is 1,020 Years Old. It Knows a Bit About Surviving Crises
or the explosive growth in the way of Zoom?
Conclusion
2020 has been a truly extraordinary year. It condensed multiple years of disasters and development into one. The changes we are all going through give us an opportunity to rethink for ourselves. We get to reevaluate what the objectives ought to be for this company of one. In response, I thought about two life-changing questions triggered by the pandemic. Unfortunately, the developments so far has also shown us there are really no “correct” responses. A set of response that put us ahead in a certain set of conditions will set us back under a different set of conditions.
