Tanishq Bhalla (MBA ’21) applies classroom lessons to reflect on the effects COVID-19 has had thus far on HBS and the global economy.
What started as a mild inconvenience to a select group of RC students bound for FGI in China escalated within three weeks to a campus-wide shutdown and global pandemic. COVID-19 has shaken up our lives here at HBS and, unfortunately, it has led to the biggest disruption at Harvard since World War II.
There is no doubt there is sadness, anger, and fear amongst us all, given that the “HBS experience,” as we know it, is over for this school year. However, this pandemic may lead to some of the most important lessons we would take away from our time at HBS. If we view this recent series of events through an educational lens, we would see all around us decisions being made that could be future HBS cases. Here are two mini cases that apply classroom lessons to explore what is happening here at HBS and globally.
1) LEAD: HBS’s Organization Management During a Crisis
“This is a crisis that every single day brings something big and new that you didn’t know was coming.”—Dean Angela Crispi (March 19, 2020)
Preparing for a crisis is not on the top of the to-do list for many leaders, but unprecedented circumstances such as this (if they unfortunately come to light) reveal how well an organization is run. In a conversation with Dean Angela Crispi, I learned about the extent of HBS’s preparation for crisis situations.
For HBS, the structure for crisis management had been put into place years before COVID-19 existed. In order to effectively handle crises that could impact the 5,000 people on campus, HBS created a Local Emergency Management Team (LEMT) in 2002 consisting of talented, interdisciplinary members that represent all major functions (Information Technology (IT), Marketing and Communications, Finance, Human Resources (HR), and Operations) and all major academic programs (such as MBA, Doctoral, Executive Education, and HBS Online). This team routinely meets to keep protocols updated and regularly holds tabletop drills to practice what-if scenarios in case of inclement weather, fires, and even global pandemics. The team is prepared to take swift action, in partnership with the faculty and Dean Nitin Nohria.
The LEMT began monitoring the COVID-19 situation at the beginning of January as concerns over the virus in China began to rise. On March 2, the time came to formally trigger this task force and the team quickly worked on formulating and implementing a plan of action. From technology choices to enable remote learning, dining hall changes to enforce social distancing, and communication strategies to engage admitted students, every member of this diverse task force needed to mobilize their respective teams and leverage the other task force members to ensure all stakeholders were aware of and could support any changes. Ultimately, the LEMT is a forum that has allowed the leaders of our organization to effectively discuss and strategize on major decisions that need to be made in a timely fashion and ensure the action plans of these decisions are sound and supported with the necessary resources.
Unlike companies that are just facing the primary challenge of how to operate their business, educational institutions like HBS face the additional challenge of keeping their students safe on the campus they call home. Dean Crispi and the team realized the importance of listening to the student voice. They met with SA leadership and RC and EC Section Presidents to hear out students’ concerns and ideas. Through the means of polls led by section presidents, virtual town halls, a daily email from the Dean’s office, and a dedicated website to share and gather information, HBS leadership has very much kept all student concerns top of mind and have done their best to limit information asymmetry. In an interview with RC Section J President Brandan Rivard, I learned about how the student voice has been communicated to HBS leadership, leading to actions such as FGI tuition reimbursement, school guidance on spring break treks, class grading modifications, and countless more school and living modifications.
With this cascading crisis, HBS leadership is facing unimaginable choices to keep its mission of “educating leaders who make a difference in this world.” Even with so much uncertainty on a daily basis, Dean Crispi is confident that the school is up for the challenge. “The bedrock of how this place is run at every level is the relentless focus on upholding our mission. This impenetrable foundation and the culture that comes from it across the HBS community have become the cornerstones ensuring that everything continues to run as best as it can in the time of a crisis.”
As future leaders, we can deeply learn about how to navigate crises by analyzing how HBS prepared and empowered the LEMT, incorporated all constituents in its decisions, and created a strong culture focused on one mission to operate its business under the most extreme circumstances.
2) BGIE: U.S. Response to Unprecedented Supply and Demand Side Shocks & the Fueling of Anti-Globalization Sentiment
“Mr. President, the only answer is to shut down the country for the next 30 days and close the borders… Keep only essential services open. The government pays wages until we reopen.”—Bill Ackman (March 18, 2020)
Bill Ackman, who has been a common name in our FIN classes, brings forward an urgent request to our country’s leaders to take stronger actions to help stop the spread of COVID-19. This plea for governmental intervention in our markets coming from a self-identified capitalist is a critical testament to the intensity of the challenges the global economy faces today.
The necessity for social distancing has forced the U.S. government to intentionally compress the economy to help stop the spread of COVID-19, thereby reducing demand and supply from optimal levels. This compression is resulting in both individuals and businesses facing the consequences, with employees unable to work and businesses unable to operate.
As we apply our BGIE lens to America’s response, we are seeing conventional and unconventional monetary and fiscal policies to stimulate the economy during this compression, many of which we have seen utilized in previous economic crises. The Federal Reserve has responded with their full playbook by (1) slashing the federal funds rate to zero (the rate was as high as 2.45% this time last year), (2) slashing the reserve requirement to zero (down from 10% for certain Net Transaction Accounts), and (3) rolling out a Quantitative Easing stimulus of $700 billion.
Furthermore, as I write this article, the U.S. government is on the verge of releasing a fiscal stimulus to further prop up both the demand and supply sides of our economy. Given this, we may see checks being sent directly to households, loans to small businesses, bailouts of service and airline industries, and many other unconventional policies.
These ongoing actions by both the Federal Reserve and the Government are being heavily debated right now and we will get to see whether these actions would have their intended effect and help save us from a recession.
The COVID-19 crisis may also fuel the anti-globalization rhetoric we have been learning about from the ongoing populist-nationalist movements. This pandemic has led to U.S. shortages in key medical supplies such as masks and ventilators, both of which can be tied back to foreign dependencies either through imports or supply chains. Over a dozen foreign governments, including Germany and India, have banned the exports of protective medical equipment to ensure that they have enough supplies for their own country as the crisis escalates. This has left many countries, including the U.S., scrambling to find a way to meet the demand of key items we may need as our hospital systems become overwhelmed. One of President Trump’s lead Trade Advisors, Peter Navarro, has already called for the Trump administration to release an executive order to bring home manufacturing capabilities and supply chains for essential medicines to reduce America’s foreign dependencies. As this crisis unfolds, America’s dependence on other nations will continue to come into question and politicians may utilize this crisis as a reason to bring back more jobs from overseas and promote more anti-trade policies.
Perhaps, most unfortunately, COVID-19 has further fueled a xenophobic culture with blame being assigned to specific nations and discriminatory actions being taken against individuals that may come from or resemble citizens of those nations. We may one day look back at this pandemic and see it as the tipping point that put an end to globalization, in effect leaving our world and the humans in it less united.
The COVID-19 pandemic will feel like it has forever put an asterisk on our HBS learning experience. While “classroom learning,” as we know it, is over, this pandemic has led to our “classroom” expanding beyond just the walls of Aldrich and even beyond international borders. More than ever before, there will be new learning opportunities all around us and we will be able to rapidly apply what we have learned to solve new challenges. If we stop looking at ourselves as the victims of this circumstance, we will realize that the HBS Classes of 2020 and 2021 will have had more opportunities of experiential learning than any other class in our school’s history.
Tanishq Bhalla (MBA ’21) grew up in Boston, MA and has primarily worked in product and business development roles in the B2B technology space. Prior to joining HBS, Tanishq worked at Cisco Systems for four years where he specialized in various technologies across the Cybersecurity and Cloud Computing landscape. Tanishq graduated from Worcester Polytechnic Institute (WPI) with a degree in Electrical and Computer Engineering.