COVID 19 Facts and Insights April 13 v2 PDF

COVID-19:
Briefing materials
Global health and crisis response
Updated: April 13, 2020
Copyright @ 2020 McKinsey & Company. All rights reserved.

Current as of April 13, 2020
COVID-19 is, first and foremost, a global

humanitarian challenge.
Thousands of health professionals are heroically battling the virus, putting
their own lives at risk. Governments and industry are working together to
understand and address the challenge, support victims and their families and
communities, and search for treatments and a vaccine.
Companies around the world need to act promptly.

This document is meant to help senior leaders understand the COVID-19
situation and how it may unfold, and take steps to protect their employees,
customers, supply chains, and financial results.
Read more on McKinsey.com
McKinsey & Company 2

Executive summary
The situation now

At the time of writing, COVID-19 cases have exceeded 1.5 million and are
increasing quickly around the world, with concerns that a 15% hospitalization rate
could drive hospital system overload.
To reduce growth in cases, governments have moved to stricter social distancing,
with “shelter in place” orders in many areas in the U.S., Europe, India, and other
countries. This has driven rapid demand declines and fears of recessions, which
governments are trying to meet through bailouts and other fiscal measures.
Some Asian countries, e.g. China, have kept incremental cases low, and
are restarting economies. So far, there is little evidence of a resurgence
in infections, though reinfection from abroad is being reported. Actions that institutions can take
Having invested in setting up a basic structure to drive basic Resolve and Resilience
planning, public and private sector institutions around the world are engaged in
continuing protection of people (incl. workforce and customers), stabilizing supply
How the situation may evolve chain (esp. PPE), as well as ensuring adequate cash and liquidity on hand.
There is a limited window for governments to drive adequate public-health
responses and meet demand drawdowns with proportionate economic In addition to this focus, some governments and companies are also starting to shift
interventions. Without this, the possibility of a deeper effect on lives and focus to what a Return to work may look like.
livelihoods is more likely.
Scaled-up testing will soon clarify the extent and distribution of spread in the U.S., An effective Return depends on a number of factors – from ensuring that the local
and Europe. There continues to be concern about the extent of spread and its region has adequate readiness for a restart from a public health standpoint, to
consequences in countries with large populations and higher population densities estimating timing for a return of demand, and other factors
Learnings from other countries and recent innovations (strict social distancing
rules, drive through testing, off-the-shelf drugs that can address mild cases, Ensuring that the Nerve Center, has adequate strategic focus in the form of Plan
telemedicine enabled home care) could provide basis for a restart. Ahead team, continues to be an important organizing principle for many institutions

Contents
01 02 03 04
COVID-19: Scenarios and Planning and Sector-specific
The situation now path forward managing COVID- impact
19 responses

The global spread Impact >1.91M >119,500

is accelerating to date
with more reports Reported confirmed Deaths
of local cases
transmission
Latest as of April 12, 2020 >212 >180 70
Countries or territories Countries or territories Countries or territories
with reported cases1 with evidence of local with more than 1000
transmission2 reported cases1
~0.1% ~38% ~46% 3

1. Previously counted only countries; now
aligned with WHO reports to include
territories and dependencies; excluding
China share of new US share of new Europe share of new New countries or
2.
cruise ship
Previously noted as community
reported cases reported cases reported cases territories with cases
transmission in McKinsey documents; April 7 – April 13 April 7 – April 13 April 7 – April 13 April 7 – April 13
now aligned with WHO definition
Sources: World Health Organization, John Hopkins University (Observed at 2100 ET), CDC, news reports
Europe
The virus has spread Total cases >913,300

Total deaths >77,400
worldwide despite
containment efforts China
Total cases >83,500

Total deaths >3,300
Africa
Total cases >10,200

1
North America Total deaths >460
Total cases >619,000

Total deaths >24,900
Oceania4
Propagation trend Total cases >7,400
>10,000 reported cases South America Total deaths >60
1,000-9,999 reported cases Total cases >48,100

250-999 Total deaths >1,900
50-250
Middle East3
<50 Asia (excl. China)2
Total cases >99,700
1. Johns Hopkins data used for U.S. (observed at 2100ET), all other North America countries reporting from
WHO Total deaths >5,100 Total cases >47,200
2. Includes Western Pacific and South–East Asia WHO regions; excludes China; note that South Korea Total deaths >1,400
incremental cases are declining, however other countries are increasing
3. Eastern-Mediterranean WHO region
4. Includes Australia, New Zealand, Fiji, French Polynesia, New Caledonia, Papua New Guinea
Source: World Health Organization, Johns Hopkins University, McKinsey analysis

The greatest share of cases come from Europe and the

U.S.
Asia
Incremental cases for China
Cumulative number of cases since March 1st – April 13th and South Korea are now <100 per
Thousands day with continued focus on disease
surveillance and management of
1,900 imported cases and localized
U.S.1 transmission
1,800
1,700 Italy
1,600 Spain
1,500 Germany
1,400 Iran Europe
1,300 France The effects of lockdowns policies are
1,200 beginning to show across multiple
Switzerland
countries. While the absolute number
1,100 UK of new cases remains high, daily totals
1,000 South Korea have plateaued or are declining in a
900 Rest of world number of countries
800
China
700
600
500
400 United States
The U.S. consistently has the highest
300
number of new cases in the world, but
200 there is early evidence of plateauing in
100 new infections – each of the first 12
0 days in April has seen between 25K
01 01 07 1213 and 35K new cases
March April
1. U.S. data from Johns Hopkins University CSSE (Observed at 2100ET); all other data from WHO Situation Reports
Sources: WHO situation reports, Johns Hopkins University, press search

Countries begin with similar trajectories but curves

diverge based on demographics and measures taken
Cumulative number of cases Select country detail

Cumulative number of cases
600,000 Italy Europe: Multiple European countries

(including Italy, Spain, Germany)
550,000 Iran have seen their curves bend
500,000 South Korea downward as the rate of new
Spain infections plateaus or declines
450,000
France
400,000
Germany South Korea: Aggressive testing,
350,000 US contact tracing and surveillance, and
mandatory quarantines are helping
300,000 UK isolate virus clusters and dramatically
250,000 slow spread of outbreak.
200,000
150,000 United States: Steepest rate of
growth but the curve has bent over
100,000 the last 10 days
50,000
0
0 5 10 15 20 25 30 35 40 45 50 Label
Days since 100th case
U.S. data from Johns Hopkins University CSSE; all other data from WHO Situation Reports
Sources: WHO situation reports; Johns Hopkins University, press search McKinsey & Company 8
Countries with the widest testing tend to

have the fewest cases per 1,000 people
Positivity Testing Rate
Total confirmed COVID cases and conducted tests % Fatality Estimate1 3 Archetypes of testing approaches
2.5% Fatality Rate
# Total Cases
(per thousand people) 1. Countries with limited testing
25% 15%
3.0 Low volumes of testing lead to few
confirmed positive cases
2.5 Italy2 2. Countries with moderate testing
approach
Some countries test only (or
2.0
predominantly) those with significant
symptoms. Since milder cases are more
US
1.5 France likely to be missed, the Case Fatality
Austria
Rate appears higher
Netherlands Germany
1.0 3. Countries with broad testing approach
5%
United Kingdom Countries that have taken broad testing
Canada
0.5 strategies tend to be those that have
South Korea
Japan Singapore
had success in limiting the number of
India
Thailand Vietnam Hong Kong new cases
0
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18
# Total Tests Conducted
(per thousand people)
1. Number of deaths / confirmed cases

2. Significantly more testing recently occurred
Sources: WHO situation reports, Johns Hopkins University, Our World In Data, The Government of the Hong Kong Special Administrative Region, The
Singapore Government; Current as of 4/12 (South Korea, Japan, Canada, Austria), 4/11 (Italy, U.S., India, United Kingdom, Vietnam). 4/10 (Thailand), 4/7
(Netherlands, France), 4/6 (Sinagpore), 4/5 (Germany), 3/31 (Hong Kong)
State of the Science: Latest evidence on COVID-19
A B C D
How is COVID-19 What portion of patients are What therapies and vaccines Do masks help reduce
transmitted, and how long asymptomatic, and what is are in development for transmission of COVID-19?
can it persist in different the fatality rate? COVID-19?
settings?
We are learning more over time WHO and the US CDC To date, there is no approved Surgical masks catch both
about how long the virus estimate that between 20-50% specific therapy or vaccine large and small droplets
remains in the air and about of all infected individuals are available for COVID-19. There (coughed, sneezed, or
survival on surfaces asymptomatic are over 130 therapeutic exhaled by an infected
According to one study1, candidates and 80 vaccine individual)
droplets can hang in the air for The same sources project a candidates2 being considered
0.5-3 hours case fatality ratio (CFR) of all across a range of modalities Several countries have
infected individuals of 1.4- and use cases. recommended public use of
Durability on surfaces ranges 5.7% masks to various extents (e.g.,
from hours to days, with the Among therapeutics, some fines in Vietnam for not using
virus surviving for longer on small molecules are masks, Japan delivering cloth
harder, less porous surfaces repurposed from other masks to each household)
More work is needed to indications (e.g. antivirals,
understand the impact of these antimalarials); some showed
findings on transmission efficacy in isolated cases3
under compassionate use
1. https://www.nejm.org/doi/full/10.1056/NEJMc2004973, https://www.nytimes.com/2020/03/17/health/coronavirus-surfaces-aerosols.html?auth=login-email&login=email; 2. CDC McKinsey & Company 10
3. CDC
A. Viral viability varies among setting and surfaces, but impact on

transmission is unclear
Viability/ survival duration of virus Mode of transmission

Air Droplets can hang in the air for 0.5-3 hrs as aerosol2,3 Thought to be the ‘receiving’
primary mode of transmission
Surfaces Cardboard Approximately 8hrs on cardboard1 Hypothesized to be a mode of
transmission5, however, studies
Paper 4-5 days on paper4
show low concentration of virus6
Glass Up to 4 days4
Metals Up-to 48 hrs on stainless steel1, and for up-to 4 hrs on copper2
Wood Up to 4 days4
Plastic 6-9 days4
Ceramics Up to 5 days4
Stone 2-12 days4
Polypropylene (incl. Virus can be found on materials containing polypropylene for Hypothesized to be a mode of
packaging, ~16hrs5 transmission5, however, studies
textiles)7 show low concentration of virus6
1. https://www.who.int/docs/default-source/coronaviruse/who-china-joint-mission-on-covid-19-final-report.pdf
2. https://www.nejm.org/doi/full/10.1056/NEJMc2004973
3. https://www.nytimes.com/2020/03/17/health/coronavirus-surfaces-aerosols.html?auth=login-email&login=email
4. https://www.journalofhospitalinfection.com/article/S0195-6701(20)30046-3/fulltext
5. https://www.medrxiv.org/content/10.1101/2020.03.09.20033217v1.full.pdf
6. https://www.health.harvard.edu/diseases-and-conditions/coronavirus-resource-center
7. https://www.sciencedaily.com/releases/2020/03/200330110348.htm

B. Estimates of the number of asymptomatic patients, case fatality ratio,

and infection window continue to evolve
= CDC estimate = WHO estimate = European CDC estimate
Metric Expert estimate range WHO / CDC estimate
Asymptomatic It has been estimated that between 20-50%1 of all

patients infected individuals were asymptomatic 25%
20% 50%
Case Fatality The case fatality ratio (CFR) of all infected

ratio individuals is estimated to be between 1.4-5.7%2 2-3% 3.8%
1.4% 5.7%
Infection Viral shedding of infected individuals has been Mild cases Severe cases
window (viral estimated to last between 10-20 days3
10 12-20 days 20
shedding)
10 20
1. Bloomberg, ijidonline, ECDC, Eurosurveillance, The Hill

2. JAMA, The Lancet, WHO, Nature Medicine, The Lancet, CDC, WHO
3. CDC, ECDC, The Lancet, JAMA, Medrxiv
Source: Expert interviews and McKinsey Analysis McKinsey & Company 12

Document intended to provide insight based on currently available information for consideration and not specific advice
C. There are over 80 vaccine candidates and 130 therapeutics candidates

in development for COVID-19
Additional detail on following page Directionally positive result Directionally negative result
Initial clinical Efficacy in

Earliest US target approval
Compound evidence isolated use?
# Candidates Mechanism Description date (publicly announced)
Remdesivir N/A Improvement in
RNA packaged in a vector / direct Fall 2020 for
compassionate
RNA/DNA- introduction of plasmid DNA select population (e.g.
use cases
based encoding antigen against which health workers) with
in US and other
immune response is sought emergency approval5
Vaccines
countries1
~80 Viral vectors / Chemically weakened virus or
Early 2021 for emergency Hydroxy- Mixed results on Improvement in
viral-like molecules that closely resemble
use authorization6 chloroquine viral clearance Japanese
particles viruses
from small French patient and
Protein- Purified or recombinant antigens and Chinese patients in
N/A studies; positive Australia2,3
based from a pathogen
result on clinical
Candidates
Largely repurposed compounds, improvement from
Small with early
including antivirals, antimalarials, N/A small Chinese trial,
molecules evidence 7-11
steroids, and more available
Favipiravir Positive result on Test dosages
Therapeutics
Monoclonal and polyclonal

viral load and effective in
antibodies – often new
Antibodies N/A clinical recovery in mild and
~130 development using survivor
2 Chinese trials14, asymptomatic
samples 15 cases4
Immune modulators (IL inhibitors
or complement pathway Kaletra 2 Chinese trials Improvement in
Other inhibitors), cell therapies, gene N/A (lopinavir, showing lack of Thai patient
therapies, RNA therapies, and ritonavir) efficacy at HIV and patients in
traditional Chinese medicine dosing12, 13 Australia3
1 CDC; 2 Pharma Japan; 3 The Scientist, Tech Times; 4 GenEng News 5 Fierce Biotech 6 J&J website 7 Preprint publication 8 Science Direct article 9 International Journal of Antimicrobial Agents (study McKinsey & Company 13
retracted: https://retractionwatch.com/2020/04/06/hydroxychlorine-covid-19-study-did-not-meet-publishing-societys-expected-standard/) 10 Mediterranee Infection 11 Zhejiang University Hospital
English Abstract 12 Preprint publication 13 NEJM article 14 Engineering journal 15 Preprint publication
D. At scale use of masks can have a role in reducing transmission of

COVID-19, as reflected in recent policy changes
Surgical face masks can prevent Many governments are facilitating the use of face masks, but
transmission of coronaviruses with divergent approaches
There are two main modes of South Korea2 Japan3

coronavirus transmission…
Government banned export of medical It is a standard practice in Japan to wear
masks; mandated 50% of mask masks in public while healthy
production to be directed to Japanese government plans to deliver 2
Spread through contact and large droplets,
such as from a cough or sneeze centralized governmental supply cloth masks per household
Government started rationing medical
grade masks United States5
Spread through small droplets diffusing Government published guidelines on
through the air over both short and long CDC initially recommended against general
re-using medical grade masks
distances public wearing masks
Vietnam4 CDC updated its guideline, recommending
wearing cloths masks (but is not
…and surgical masks can catch both Banned export of face masks recommending the use of surgical masks)
large and small droplets1 as it’s Wearing mask is required in public Some state/ local governments
coughed, sneezed, or exhaled places implemented compulsory mask wearing
Imposed hefty fines for going ‘mask- (e.g., LA)
less’
However, cloth masks may not be effective against airborne aerosols

1. https://www.nature.com/articles/s41591-020-0843-2; 2. https://www.wsj.com/articles/south-korea-rations-face-masks-in-coronavirus-fight-11584283720, 3.
https://english.kyodonews.net/news/2020/04/77fea577e0f9-japan-to-give-cloth-face-masks-to-50-mil-households-to-fight-virus.html McKinsey & Company 14
4. https://www.voanews.com/science-health/coronavirus-outbreak/vietnam-imposes-hefty-fines-going-maskless; 5. CDC
Countries will decide which measures to implement based on local situations
and disease progression
New daily cases
I Localized clusters II Uncontrolled acceleration III Spread deceleration IV Control
Majority of cases can be linked to Majority of cases involve an unknown Number of new cases has peaked, and Limited number of news cases, and
known chains of transmission (i.e., source of infection and infection rate is infection rate is decreasing systems in place to control spread of
cases can be managed individually) accelerating Magnitude: infection (e.g., track and manage cases
Lead indicators to Magnitude: Magnitude: individually)
Significant number of new cases per
identify which Handful of new cases per day Significant number of new cases per day Magnitude:
phase of disease Growth: day Handful of new cases per day, with no
progression is Growth:
Percentage growth may be high, but Growth: significant spikes
applicable Decline in the number of new cases
absolute number of cases remains Exponential to fast linear growth in the over time (with potential day-to-day Growth:
within the capacity of public health number of new cases variation) Cases flat / trending down over time
systems
Detect and trace all cases without Apply distancing measures Maintain distancing measures; Detect and trace all cases without
Likely losing control of chains of Expand healthcare capacity prepare to release when feasible losing control of chains of
interventions transmission (contain acceleration) Prepare systems for individual case transmission while restarting activity
Build testing capacity
mgmt.
A. Physical distancing / quarantine
B. Travel restriction
Predominant
C. Effective use of Personal Protective Equipment
measures
D. Testing and tracing D. Testing and tracing
E. Healthcare capacity surge
Source: Empirical observation from WHO data of pandemic epidemiologic characteristics of populations in each phase McKinsey & Company 15
Countries with the widest early testing

show the fewest cases per 1,000 people
Positivity Testing Rate
Total confirmed COVID cases and conducted tests3 % Fatality Estimate1 3 Archetypes of testing approaches
2.5% Fatality Rate
# Total Cases
(per thousand people) 1. Countries with limited testing
25% 15%
3.0 Low volumes of testing lead to few
confirmed positive cases
2.5 Italy2 2. Countries with moderate testing
approach
Some countries test only (or
2.0
predominantly) those with significant
symptoms. Since milder cases are more
US
1.5 France likely to be missed, the Case Fatality
Austria
Rate appears higher
Netherlands Germany
1.0 3. Countries with broad testing approach
5%
United Kingdom Countries that have taken broad testing
Canada
0.5 strategies tend to be those that have
South Korea
Japan Singapore
had success in limiting the number of
India
Thailand Vietnam Hong Kong new cases
0
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18
# Total Tests Conducted
(per thousand people)
1. Number of deaths / confirmed cases, metric depends on confirmed cases
2. Significantly more testing recently occurred
3. Confirmed cases are dependent on breadth of testing
Sources: WHO situation reports, Johns Hopkins University, Our World In Data, The Government of the Hong Kong Special Administrative Region, The
Singapore Government; Current as of 4/12 (South Korea, Japan, Canada, Austria), 4/11 (Italy, U.S., India, United Kingdom, Vietnam). 4/10 (Thailand), 4/7
(Netherlands, France), 4/6 (Sinagpore), 4/5 (Germany), 3/31 (Hong Kong)
South Korea quickly built the infrastructure required to conduct wide-

scale testing and contact tracing
Daily Incremental cases in South Korea Prevalence
I II III IV
1,000 0.03
750
0.02
500
0.01
250
0 0
20 01 01 01
January February March April
I Local clusters II Uncontrolled acceleration III Spread deceleration IV Prevention of recurrence
A: Physical Began daily government Shut down schools Re-emphasized importance

distancing / communication that created Recommended no mass gatherings, remote-work measures, staggered of social distancing in
quarantine high public awareness of commuting hours, and avoidance of crowded spaces public communications,
importance of social distancing specifically for religious
gatherings
B: Travel Imposed entry ban on all Required arrivals from Europe and US to Required all overseas
restriction foreign nationals who had take diagnostic test and self-quarantine for 2 arrivals to self-quarantine for
traveled to Wuhan, Hubei weeks; enforced through check-ins by 2 weeks
China in the past two weeks officials
C: Effective Distributed ~4.5 million face masks via public organizations and restricted mask Launched a government-administered
Use of PPE exports mask distribution system (managed
distribution and tracking to avoid crowding)
Requested private mobile apps and web
services to include the location and volume
of masks left in pharmacies
D: Testing and Approved first RT-PCR test Built infrastructure to support rapid contact tracing of confirmed cases and close Launched integrated data platform
tracing kit for emergency use contacts by KCDC connecting 28 agencies and companies to
Rolled out testing sites across the country, including drive thru and walk-in sites (600 accelerate contact tracing
collection centers)
Began sharing real-time info with the public
E: Healthcare Developed effective system for triaging patients and supplemented already strong
capacity surge hospital network with private sector support (e.g., repurposing of corporate facilities)
Source: WHO data, Korea CDC, CNN, New York Times McKinsey & Company 17
Wuhan, China reopened sectors over a multi-week period only after new
cases counts were dramatically reduced
Daily incremental cases in Hubei, China Prevalence
I II III IV
15,000 0.12
6,000 0.10
5,000 0.08
4,000 0.06
3,000
0.04
2,000
1,000 0.02
0 0
23 01 01 01
January February March April Easing of restriction
I II Local clusters / uncontrolled acceleration III Spread deceleration IV Prevention of recurrence
A: Physical Postponed school resume after CNY holiday March 4: Reopened 1st wave of businesses (agriculture)
distancing / Postponed office resume after CNY holiday March 11: Reopened 2nd wave of businesses (medical, sanitation, utilities,
quarantine1 Shut down all businesses except medical industry and sanitation groceries)
March 13: Reopened 3rd wave of businesses (elective hospital procedures)
March 24: Allowed for all businesses to reopen upon individual
assessment2
March 27: Removed full community lockdown; however, people
encouraged to stay home as much as possible and schools remain closed
B: Travel Shut down public transportation April 8: Resumed domestic flights (excluding Beijing) and outbound
restriction1 Banned inter-region and international travel highway and railway travel (after presenting a phone app that indicates
Issued shelter-in-place order whether they are contagion risks)
Banned all personal conveyance (cars, etc.)
C: Effective Use of Issued order for masks to be worn in public

PPE1 Began conducting major public space sanitization (2x/day)
D: Testing and Began registering all likely cases and conducting temperature Established mandatory temperature
tracing1 checks at major transportation hubs and supermarkets checks for all residents
Implemented personal “health QR
code” for staff on duty
E: Healthcare Began to build temporary dedicated hospitals

capacity surge1 Built mobile cabin hospitals for mild cases
1 Measures listed are for Wuhan specifically; 2 As of April 7, ~94% of businesses has resumed operations (11K total) McKinsey & Company 18
Source:: wjw.wuhan.gov.cn, www.hubei.gov.cn, www.nbd.com.cn
Austria has released plans to gradually reopen businesses and ease

physical distancing restrictions over the next month
Daily incremental cases in Austria Prevalence
I II III IV
1,500 0.20
0.15
1,000
0.10
500
0.05
0 0
26 01 01 13
February March April
Easing of restriction1
I II Local clusters / uncontrolled acceleration III Spread deceleration IV Prevention of recurrence
A: Physical distancing / Ordered full lockdown, including prohibition of large public events Apr 14: Open federal gardens, shops <400 sq m, hardware and garden centers
quarantine Closed all schools irrespective of sales area2
Expected future openings, if there is no pickup in infections
End of Apr: May reopen swimming pools, fitness centers, and sports facilities
May 1: Open all shops and hairdressers2
Mid-May: Open all hotels, restaurants, and schools
End of June: Allow public events to resume, open cinemas and theaters
B: Travel restriction Restricted cross-border travel from neighboring EU countries End of April: May lift restriction on leaving home (currently allowed for work,
Suspended external air and train traffic, limited public transport groceries, and select other situations)
Isolated multiple regions with high case loads
C: Effective Use of PPE Distributed masks at no cost Required covering of nose and mouth in supermarkets + public transit
Required regular disinfection of open stores
D: Testing and tracing
E: Healthcare capacity Provided government funding for hospital equipment

surge Set up additional capacity for mobile and stationary care
Deployed additional healthcare staff, including military physicians and
former civil servants
1 All milestones are contingent on public compliance with restrictions and assuming the number of cases does not increase; 2 Only 1 customer allowed per 20 square meters; specific requirements for disinfection
Source: WHO, https://www.bundeskanzleramt.gv.at/bundeskanzleramt/nachrichten-der-bundesregierung/2020/bundeskanzler-kurz-stufenplan-fuer-schrittweise-oeffnung-von-geschaeften-nach-ostern-aber- McKinsey & Company 19
massnahmen-weiter-befolgen.html, https://www.bloomberg.com/news/articles/2020-04-06/denmark-joins-austria-in-easing-virus-curbs-as-europe-cases-slow; https://fortune.com/2020/04/14/europe-austria-
denmark-spain-france-reopen-economy-coronavirus-lockdown/
Japan limited the number of cases early, but cases have grown
significantly in the past several weeks
Daily incremental cases in Japan Prevalence
I II
800 0.006
600
0.004
400
0.002
200
0 0
16 01 01 01
January February March April
I Local clusters II Uncontrolled acceleration
A: Physical Feb 27: Prime Minister ordered closure of schools Apr 1: A government panel of experts called for drastic measures, but Prime Minister said
distancing / Mar 24: Tokyo Olympics and Paralympics postponed declaration of a state of emergency was not needed
quarantine Apr 7: Prime Minister declared a month-long state of emergency (not lockdown) for Tokyo
and six other prefectures, encouraging residents to stay home
April 11: Prime Minister calls for 70% reduction in workers commuting to offices in
Tokyo and the 6 prefectures affected
B: Travel restriction Mar 5: Required 2-week quarantine for individuals entering from China and South Korea
Mar 18: Required 2-week quarantine for individuals entering from 28 countries including EU
Mar 23: Required 2-week quarantine for individuals entering from US
C: Effective Use of Government banned the reselling of face masks online as a result of price gouging; mask Apr 2: Announced distribution 2 cloth masks per household
PPE wearing is typical in Japan during hay fever season (regardless of COVID)
D: Testing and Early Feb: Began coronavirus testing for individuals with symptoms; initiated a specialized Cities of Niigata and Nagoya began offering drive-thru testing services
tracing team to trace infection clusters Apr 7: Upon declaring state of emergency, Prime Minister committed to ramping up testing
capacity to 20K tests/day
E: Healthcare Mar 20: Prime Minister’s Office announced that they would continue to focus on infection cluster
capacity surge countermeasures and preparing health care infrastructure to treat the seriously ill
Source: WHO Sitrep, Japan Times, Kyodo News, Nippon, Reuters McKinsey & Company 20
Emerging economies face unique challenges across public health

measures and have adopted interventions to address them
Categories Challenges Key lessons from specific regions
A: Physical High population density and communal living Quarantine early and aggressively
distancing / hinders physical dancing § Vietnam. Proactive and early- quarantine measures to isolate and confine COVID-19 infection (2/13 Lockdown
quarantine of part of Vinh Phuc province, later lifted)
High percentage of vulnerable population
§ Colombia. Rapid national-wide lockdown measures (first in Latin America)
(migrants)
B: Travel Lengthened domestic travel restriction can be Aggressive border control
restriction especially costly for countries dependent on § Vietnam. Suspension of international arrivals including ex-pat Vietnam nationals while providing case-by-case
primary and secondary industry exceptions to key industry stakeholders (e.g., Samsung Electronics)
§ India. Suspension of all international commercial passenger flights (3/22)
Access to goods may be harder in developing
§ Colombia. Aggressive border closure (13 days post first case)
countries
Build upon existing social welfare policy
§ Colombia. Additional payments to social welfare programs for families, young people and the elderly;
continuance of free childcare and school lunches
C: Effective Cost of medical-grade PPE is burdensome Raise COVID-19 awareness

Use of PPE § Vietnam. Media running frequent messaging on COVID including PPE usage; Hefty fines for sharing “fake
Communication of PPE importance may be
news” about COVID-19
lagging in developing countries
Facilitate mask-wearing behavior
Hygienic practices (e.g., washing with clean § Vietnam. Wearing mask is required; hefty fines for going maskless
water) can be difficult especially in rural areas § India. Proactive export ban on surgical masks (1/31); Government recommends home-made cloths masks
D: Testing and Large-scale commercial testing is often out of Supplement with low-cost/high-volume testing
tracing reach in developing countries especially in rural § Bangladesh. Approved the production of low-cost antibody detection test kits
areas § Vietnam. Imported 200,000 lower-cost rapid test kits to complement RT-PCR based tests
Lower digital technology penetration (e.g., Leverage previous pandemic infrastructure
smartphones) hinders app-based tracing § Nigeria. Using capabilities built during Ebola crisis (e.g., National Reference Laboratory for molecular testing,
methods Emergency Operations Center) to track and isolate second- hand contacts of infected individual
§ Colombia. Using capabilities built during Measles outbreak to conduct initial contact tracings
Source: https://economictimes.indiatimes.com/news/international/world-news/coronavirus-in-india-what-is-happening-and-what-you-should-know/articleshow/73978271.cms?from=mdr, https://www.washingtonpost.com/world/asia_pacific/india- McKinsey & Company 21

coronavirus-lockdown/2020/03/24/37f201c6-6d55-11ea-a156-0048b62cdb51_story.html, https://www.ft.com/content/0cc3c956-6cb2-11ea-89df-41bea055720b, https://www.as-coa.org/articles/where-coronavirus-latin-america
Contents
01 02 03 04
19 responses

The Imperative of our Time
1 “Timeboxing” the Virus and the

Economic Shock
Safeguard our lives
1a. Suppress the virus as fast as possible
1b. Expand treatment and testing capacity 1b
1a 1c
Imperatives
1c. Find “cures”; treatment, drugs, vaccines
2 2a
2c
Safeguard our livelihoods

2a. Support people and businesses affected by lockdowns ~ -8 to -13%
2b
Economic
2b. Prepare to get back to work safely when the virus abates Shock
2c. Prepare to scale the recovery away from a -8 to -13% trough
Source: McKinsey analysis, in partnership with Oxford Economics

Scenarios for the economic impact of the COVID-19 crisis

GDP impact of COVID-19 spread, public health response, and economic policies
Rapid and effective control B1 A3 A4
of virus spread Virus contained,
Strong public health response succeeds but sector Virus contained;
Virus contained,
in controlling spread in each country damage; lower strong growth
slow recovery
within 2-3 months long-term trend rebound
growth Virus Contained
Virus spread and
public health Effective response, but
(regional) virus resurgence B2 A1 A2
response
Public health response initially succeeds Virus Virus resurgence; Virus resurgence;
Effectiveness of the public but measures are not sufficient to prevent resurgence; slow long-term return to trend
health response viral resurgence so social distancing slow long-term growth growth
in controlling the spread continues (regionally) for several months growth
Muted World Recovery Strong World Rebound
and human impact
of COVID-19
Broad failure of public health B3 B4 B5
interventions Pandemic Pandemic Pandemic
Public health response fails escalation; escalation; slow escalation;
to control the spread of the virus prolonged progression towards delayed but full
for an extended period of time downturn without economic recovery economic recovery
(e.g., until vaccines are available) economic recovery
Partially effective Highly effective

Ineffective interventions interventions interventions
Self-reinforcing recession dynamics Policy responses partially offset Strong policy responses prevent
kick-in; widespread bankruptcies and economic damage; banking crisis structural damage; recovery to pre-
credit defaults; potential banking crisis is avoided; recovery levels muted crisis fundamentals and momentum
Knock-on effects and economic policy response

Speed and strength of recovery depends on whether policy moves can mitigate
self-reinforcing recessionary dynamics (e.g., corporate defaults, credit crunch)
Source: “Safeguarding our lives and our livelihoods: The imperative of our time,”; available online at https://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/safeguarding-our-
lives-and-our-livelihoods-the-imperative-of-our-time; date of access: Mar 31st 2020
COVID-19 U.S. impact could exceed anything since the end of WWII
United States real GDP
%, total draw-down from previous peak
-5
-8% Scenario A3
-10
-13% Scenario A1
-15
-20
-25
-30
1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 2020
Pre-WW II Post-WW II
Source: Historical Statistics of the United States Vol 3, Bureau of economic analysis; McKinsey team analysis, in partnership with Oxford Economics
Epidemiological scenario Economic impacts

Scenario A3: China and East Asian countries China will undergo a sharp but brief
continue their current recovery and slowdown and relatively quickly
Virus control the virus by early Q2 2020 rebound to pre-crisis levels of activity.
Contained Virus in Europe and the United States
China’s annual GDP growth for 2020
would end up roughly flat
The virus continues would be controlled effectively with
to spread across the between two to three months of In Europe and the U.S., monetary and
Middle East, Europe and economic shutdown; new case counts fiscal policy would mitigate some of
the U.S. until mid Q2, peak by end April and declines by the economic damage with some
when virus seasonality June with stronger public health delays in transmission, so that a
response and seasonality of virus strong rebound could begin after the
combined with a
virus was contained at the end of Q2
stronger public health
2020
response drives case
load reduction Most countries are expected to
experience sharp GDP declines in Q2,
which would be unprecedented in the
post WWII era

Scenario A3:
Virus Contained
Real GDP growth World Real GDP

Local currency units indexed, 2019 Q4=100 United states
drop 2019 2020 GDP Time to return
Q4–2020 Q2 growth to pre-crisis
Eurozone
115 % change % change Quarter
China1
110
China -3.3% -0.4% 2020 Q3
105
100 USA -8.0% -2.4% 2020 Q4
95
World -4.9% -1.5% 2020 Q4
90
85 Eurozone -9.5% -4.4% 2021 Q1

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2019 2020 2021
1. Seasonally adjusted by Oxford Economics
Source: McKinsey analysis, in partnership with Oxford Economics McKinsey & Company 27
Epidemiological scenario Economic impacts

China would need to clamp down on China would recover more slowly and
Scenario A1: regional recurrences of the virus would also be hurt by falling exports to
Muted World the rest of the world. Its economy could
The United States and Europe would
Recovery face a potentially unprecedented
fail to contain the virus within one contraction
quarter and be forced to implement
The virus spreads
some form of physical distancing and The United States and Europe would
globally without a quarantines throughout the summer face a GDP decline of 35 to 40 percent
seasonal decline. Health at an annualized rate in Q2, with major
systems are economies in Europe registering similar
overwhelmed in many performance. Economic policy would
countries, especially the fail to prevent a huge spike in
poorest, with large-scale unemployment and business closures,
human and economic creating a far slower recovery even
impact after the virus is contained
Most countries would take more than
two years to recover to pre-virus levels
of GDP
Scenario A1:
Muted World Recovery
Real GDP growth World Real GDP

Local currency units indexed, 2019 Q4=100 United states drop 2019 2020 GDP Time to return
Q4–2020 Q2 growth to pre-crisis
Eurozone
115 % change % change Quarter
China1
110
China -3.9% -2.7% 2021 Q2
105
100 USA -10.6% -8.4% 2023 Q1
95
World -6.2% -4.7% 2022 Q3
90
85 Eurozone -12.2% -9.7% 2023 Q3

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2019 2020 2021
1. Seasonally adjusted by Oxford Economics
Source: McKinsey analysis, in partnership with Oxford Economics McKinsey & Company 29
What business leaders should look for in coming weeks

There are three questions business leaders are asking, and a small number of indicators that can give clues
Depth of disruption Length of disruption Shape of recovery

How deep are the demand reductions? How long could the disruption last? What shape could recovery take?
• Time to implement social distancing after • Rate of change of cases • Effective integration of public health measures
community transmission confirmed • Evidence of virus seasonality with economic activity (e.g. rapid testing as
Epidemiological
• Number of cases – absolute (expect surge as pre-requisite for flying)

• Test count per million people
testing expands) • Potential for different disease characteristics
• % of cases treated at home over time (e.g. mutation, reinfection)
• Geographic distribution of cases relative to
economic contribution • % utilization of hospital beds (overstretched
system recovers slower)
Indicators
• Availability of therapies
• Case fatality ratio vs. other countries
• Cuts in spending on durable goods (e.g., cars, • Late payments/credit defaults • Bounce-back in economic activity in countries
appliances) that were exposed early in pandemic
Economic
• Stock market & volatility indexes

• Extent of behavior shift (e.g., restaurant spend, • Purchasing managers index • Early private and public sector actions during
gym activity) the pandemic to ensure economic restart
• Initial claims for unemployment
• Extent of travel reduction (% flight
cancellations, travel bans)
Contents
01 02 03 04
19 responses

Leaders need to think and act
across 5 horizons
1 2 3 4 5
Resolve Resilience Return Reimagination Reform

Address the immediate Address near-term Create a detailed plan Re-imagine the “next Be clear about how
challenges that cash management to return the business normal”—what a the regulatory and
COVID-19 represents challenges, and back to scale quickly, discontinuous shift looks competitive environment
to the institution’s broader resiliency as the virus evolves like, and implications for in your industry may shift
workforce, customers, issues during virus- and knock on effects how the institution
technology, and related shutdowns and become clearer should reinvent
business partners economic knock-on
effects
Nerve center
Managing across the 5Rs requires a new
architecture based on a team-of-teams approach.

3
Return
Create a detailed plan to return the business back to
scale quickly

Return
There are 3 distinct National governments

Contain the domestic virus spread
actors with different
Fasttrack testing, treatment and vaccine approval and
responsibilities in production
the Return from Protect and restart the economy
COVID 19
State / Local governments
National governments, State and
Administer virus treatment
Local governments, and companies
each play different roles in achieving Enforce protection policies
a full Return - and stakeholders in Safeguard vulnerable populations
different geographies can coordinate
to define roles and responsibilities
Companies
Resume sustainable operations
Protect employees in the workplace

National
Governments

National government
The extent of the healthcare system’s ability to handle virus

transmission is one key indicator for a national government’s
readiness for reactivation
Each region’s readiness can be assessed along two dimensions
Low Readiness to Virus spread New daily infections

Low system Medium system High system
restart economy:
readiness and readiness and readiness and Virus transmission rate (Rt), i.e. the
low virus spread low virus spread low virus spread Stage 1
number of people that catch the disease
Stage 2 from a single infected person
Stage 3 New people requiring hospitalization
Stage 4 and ICU care daily
Low system Medium system High system
readiness and readiness and readiness and
Virus medium virus medium virus medium virus
spread spread spread Medical capacity, especially ICUs (e.g.,
spread Public-health
system ICU beds, ECMOs)
readiness Adequate medical resources (e.g.,
Low system Medium system High system trained doctors, beds, personal protective
readiness and readiness and readiness and equipment)
high virus high virus high virus
spread spread spread Ability to rapidly test infections
Effectiveness in tracking and isolating

High cases and contacts, including digital tools
Low Public-health High
for real-time sharing of critical data
system readiness
Source: McKinsey analysis, Press search McKinsey & Company 36

National government
Governments could prioritize reopening of sectors based on

risks of virus transmission and their economic relevance
An illustration of how countries might prioritize reopening of sectors along two dimensions
Illustrative Example
Essential services and sectors that continue operating
regardless of the severity of transmission risk
Low Healthcare and Essential Other essential
Group 1 services relating to goods (e.g., services (e.g.,
Sector 12 prevention and food, medicine) utilities, waste
Sector 1 control of outbreak management,
(e.g., testing) public defense)
Sector 2
Sector 10 Sector 7 Group1: Examples of sectors with high economic
Sector 4 relevance and low risk of transmission
Group 2
Agriculture Manufacturing Logistics
Risk of
Sector
transmission Sector 3 9 Group 2: Examples of sectors with some economic
Group 3 relevance and low or medium risk of transmission
Real Estate Other professional services (e.g.,
accounting, marketing)
Sector 11 Sector 5
Sector 6 Sector 8
Group 3: Examples of sectors with low economic
relevance and high risk of transmission
Food and Educational Recreational
High accommodation institutions businesses (e.g.,
(e.g., hotels, Gyms and fitness
Low Economic relevance High restaurants) centers)
(varies by country)
Source: McKinsey analysis, OECD McKinsey & Company 37

National government
China example: Containment measures can be adapted

based on assessed readiness for reactivation
Example of stages of reactivation China’s regions went through
Readiness to reactivate economy
Stage 1 Stage 2 Stage 3 Stage 4
Geography Hubei No restrictions, but remote working is Each household to keep only one Curfew in place with nighttime outdoor Mandatory to stay home in isolation
recommended and households must entrance and exit point open. Allowed access prohibited; each household is with outdoor access prohibited
ensure they follow health and safety limited number of entrances and exits allowed limited numbers of entrances
measures per day and exits
Other No restrictions, but remote working is Limited restrictions but highly Curfew in place with certain restrictions Most provinces shut down with
provinces recommended and households must encourage residents to work from home on time of day, day of week, and other residents required to stay at home
ensure they follow health and safety across multiple provinces limitations that differ by province
measures
Essential All sectors are allowed to operate and Government begins to prepare the Government partially manages Government ensures management of
sectors key supply chains operate on market management of key supply chains in essential supply chains essential supply chains and
basis partnership with the private sector infrustructure (ie. medical supplies,
building of temporary hospitals)
Non-essential All sectors are allowed to operate Most sectors are allowed to operate but Few sectors are allowed to operate Issued order to shutdown all non-
sectors while being cautious of health and must comply with specific physical after they have received approval and essential companies, where only those
safety measures distancing and health protocols (e.g., in comply with physical distancing and that can operate online are allowed
restaurants) safety protocols (e.g., manufacturing
factories)
Transport Hubei Lockdown lifted, all transportation Easing of inter-province movement with Removed all traffic control points except Locked down transport in and out of
resumes in all Hubei cities including Hubei. Transportation in Hubei cities for exits of Hubei province and at Hubei province, amongst cities in Hubei
Wuhan. Residents who travel have to apart from Wuhan resume. Residents entrances/exits to Wuhan city. Hubei and within all Hubei cities including
show "green" health code. People must show "green code" and strict residents who travel within the province Wuhan
from other provinces can travel in and screening continues have to show "green code"
out of Hubei with green code
Other All transportation within city, inter-city Inter-province movement restricted Limited inter-city movements with strict Intra-city movement restricted
provinces and inter-province resumes. People screening at traffic control points
who travel have to show "green code"
Gathering limited to medium-sized
Assembly Large events and gatherings that draw Gatherings limited to small groups in Remain within circle of household
groups. Workplace events encouraged
crowds are banned (e.g., concerts, to be cancelled or postponed. private and public places members in residential spaces
tourist events)
Source: Press search McKinsey & Company 38

National government
China example: Targeted demand and supply interventions

can accelerate the recovery of sectors
Examples of interventions used by the Chinese government
Demand: Restore Supply: Accelerate business recovery

consumer confidence
Boost consumers’ willingness to Guarantee transportation Assist enterprises in Promulgate trade emergency measures:
spend: logistics and coordinate epidemic prevention: Registration fees exempted for specific drugs
Rolled out digital coupons via Alipay and supply channels: Advised companies to formulate and medical devices
WeChat pay to use for dining, shopping and Coordinate local raw prevention and control measures Manufacturers of essential supplies and
travel for short period of time material and accessory (employee inspections, facilities, products will benefit from a one-time tax
Reduce import tariffs on consumer goods resources, and promote adequate medical supplies) deduction for equipment purchases
cross-city collaboration as Investigation and research teams Import/export of technology by local companies
needed sent by central government to is to be prioritized and receive special
inspect work resumption progress assistance from local departments
Communicate frequently across Solve labor shortage and difficulties in work resumption Alleviate pressure on cash flow and
multiple channels and recruiting: operating costs:
Establish centralized reporting and Arranged chartered transport and offered allowances to bring migrant Tax declaration extension
communication channels to keep citizens workers from provinces with labour surplus to needed cities Exemption of social insurance payments and
informed Subsidise “point-to-point” pickup and drop off of migrant workers housing provident funds for corporates
Created an online epidemic control website Offer subsidies for couples returning to work and companies hiring more Reduce electricity cost
to publish disease indicators and provide workers Subsidise loans, issue low cost loans, postpone
real-time updates
Receive money for every new hire by local firm and hiring a minimum of loan repayment, reduce SSC, VAT reduction or
Create health QR codes on leading platform workers from outside provinces exemption, and reduce rent for SMEs
Alipay to track mobility, and alert on risks

National government
99% 92% 77%

Work resumption rate for large Work resumption rate for all Work resumption rate for small
enterprises outside Hubei as of government-owned firms as of and medium enterprises outside
March 28 early March Hubei as of March 29
China example:
Sectors recover at
different rates, with Industrial enterprises
99% of China’s major industrial enterprises
Textile, machinery, light industries
70-90% of employees have resumed work as of
large industrial
have resumed production as of March 28
In Hubei, 95% of major industrial enterprises
March 28
firms recovering the have resumed operations, and 70% of

employees have returned
earliest and SMEs Construction & infrastructure
11,000 key projects outside of Hubei province
and services taking Automotive

have resumed, at a rate of 89.1% as of March 23
Major highway and water transportation work has
longer Returned to 97% operating rate, 82% of

employees have returned to work as of March 28
resumption rate of 97%. Airport and major water
projects respectively reported a rate of 87% & 86%
Steel & electronics Restaurants

90% of employees have returned to work as of Estimated 40% of restaurants reopened and
March 28 only 20% of workers returned as of mid-March
Source: Press releases McKinsey & Company 40

National government
China example: Continued, targeted stimulus can support

populations & businesses that struggle during reactivation periods
Examples of economic measures to support the most vulnerable segments in China
Efforts and measures to help Financial aid provided to highly impacted COVID-19 poses a grim
unemployed and impoverished people SMEs and micro-businesses market for new graduates
Wanning city government in Hainan created 1,327 Offer subsidized loans to agricultural firms and SMEs College graduates in China reaches a
temporary public welfare posts for epidemic record high of 8.74 million while job
Postponement of principal and interest loan
prevention, including disinfecting and recruitment has dwindled or been
repayment for payments from Jan 25 to June 30 2020
guarding for impoverished people postponed due to the COVID-19
From March 1 to May 31, 2020, small taxpayers in outbreak
In addition to offering jobs for low-income families,
Hubei province will be exempted from VAT if their
many places in China arranged shuttle buses, The Ministry of Education has
tax rate is set at 3%. Small taxpayers in other regions
trains and flights to transport impoverished announced measures to ease the
will pay rate of 1% on taxable sales revenue if their VAT
workers from their rural hometowns back to work pressure, including launching an
rate is set at 3 %.
in big cities online campus recruitment service
Reduce and postpone social security contributions, and expanding the enrolment of
Local governments sought and dispatched
reduce contributions for endowment insurance, master's degree students
workers, majority of whom were rural migrant
unemployment insurance and work injury insurance
workers in poverty, to fill vacancies of To provide more job opportunities, the
enterprises that were facing shortages of Guide banks to issue low cost loans to individual country will expand recruitment in
labour businesses basic education, primary-level
medical care and community
In the city of Huai'an in northern Jiangsu, the local Trim electricity charges by 5% for companies not
services
government has announced measures including from high energy consuming industries
the introduction of jobs and employment Government encouragement of new
Encourage local governments to cut land use tax as
subsidies to encourage migrants to work in graduates to work in grass-root
incentives for property owners to reduce rent for
their hometown institutions in remote areas of the
business tenants
country
Source: Press releases McKinsey & Company 41

State / Local
governments

State / local government
Local leaders can combat COVID-19 across six domains
Domain Example objective Potential metrics
Mitigate contagion by protecting healthcare workers, scaling testing capabilities, Mortality, hospitalizations, active
Foundational
I establishing contact tracing, setting effective quarantines, and adopting public use cases, testing rate, healthcare worker
Public Health of PPE, and other “low regret” approaches hospitalizations, mask availability
Achieving compliance with public health strategies among people and Compliance by segment (old, young,
Societal
II institutions, using communication, influencers, segmentation, penalties, low-income) and by intervention
Compliance enforcement, and support (physical distancing, remote work)
Expand health system capacity including staff, supplies, and physical Resources (beds, ICU, vents, staff,
Health System
III infrastructure likely through coordination, direct support (National Guard), funding, supplies) per 1000 people; potential
Capacity and directives expansion once activations
Protecting the public at work, in stores, and at school by erecting safeguards Portion of each industry confirmed to
Industry
IV to human interaction, helping businesses secure their operations, and creating safeguarded
Safeguarding safe environments for people to work Consumer confidence to engage safely
Ensuring public support for individuals who are recently unemployed or Trends in events (e.g. eviction rates,
Vulnerable
V homeless, or have chronic physical or mental health conditions that can be suicide rates, depression/anxiety RXs,
Populations exacerbated by the epidemic hate crimes)
Minimize the economic impact and accelerate recovery by distributing federal Unemployment rate, bankruptcies, sales
Economic
VI stimulus, crafting local programs to supporting business, and incentivizing tax, new business formation, state
Health consumer spending solvency
Source: McKinsey.com, “Winning the “local” COVID-19 war” McKinsey & Company 43
23 public health interventions identified and assessed across

4 dimensions (epidemic, economic, social and implementation)
Evidence of Unfavorable Unfavorable Implementation
Categories Interventions to stop contagion impact on epidemic economic impact social impact difficulty
Protection 1 Protection of essential health workers-adequate PPE and protocols High Low Low Low
2 Systematic testing High Low Low Medium
3 Sign and symptom screens (temperature checks, self-screening) Medium Low Low Medium
Detection/ 4 Contact tracing High Low Low High
quarantine 5 Time limited quarantine of infected patient High Low Low Medium
6 Time limited quarantine of those in contact with infected patient Medium Low Medium Medium
7 Extended quarantine of high-risk population Medium Low Medium Medium
8 Personal/home hygiene e.g., hand washing, surfaces Medium Low High Medium
Personal 9 Targeted use of masks Medium Low Medium Medium
behavior
10 Voluntary physical distancing Medium Low Medium Medium
11 Migrate to remote working where possible Medium Medium Low Medium
Economic 12 Workplace safeguards (e.g., masks, physical distancing) Medium Medium Low High
activity
13 Prohibiting selective activity/sectors (e.g., retail, manufacturing) Medium High Medium Low
14 Full shelter-in-place High High High Medium
15 Stop large gatherings (e.g., church, sports) Medium Low Low Low
Travel/ 16 Stop small gatherings (e.g., church, sports) Medium Low Medium Medium
movement 17 Restricting movement in/out of state/city High High High Medium

18 Mass transportation shutdown Medium Medium Medium Medium
19 Cleaning/protocols of mass transportation Low Low Low Medium
20 Shift primary education to remote Medium High Medium Medium
21 Shift secondary education to remote Medium Medium Low Medium

Education
22 Shift higher education to remote Medium Medium Low Low
23 Require education safeguards Low Low Low Medium
Evidence of
Interventions effectiveness
can be
Strongest The Fundamentals Most painful, highly effective
categorized by evidence of Execute at scale Drive compliance
high efficacy
effectiveness 1 Protection of essential health workers 14 Full shelter-in-place
2 Systematic testing 17 Restricting movement in/out of state/city
and level 4 Contact tracing 18 Mass transportation shutdown
of pain, with 5 5
9
Time limited quarantine of infected patients
Targeted use of masks
fundamental
interventions Some
evidence of
Close to no-regret
Operate through pandemic, maintain readiness
Effective, but painful
Apply only as needed; mitigate risk/downside
identified effectiveness
3 Sign and symptom screens (temperature 6 Time limited quarantine of those in contact with
checks, self-screening) infected patient
8 Personal/home hygiene 7 Extended quarantine of high-risk population
10 Voluntary physical distancing 13 Prohibiting selective activity/sectors (e.g., retail,
11 Migrate to remote working where possible manufacturing)
12 Workplace safe guards 16 Stop small gatherings (e.g., church, sports)
15 Stop large gatherings 20 Shift primary education to remote

19 Cleaning/protocols of mass transportation 21 Shift secondary education to remote
23 Require education safeguards 22 Shift higher education to remote
Low/medium Higher
Level of pain, economically, socially

COVID-19 exacerbates challenges across a variety of

universal basic needs (1/2)
Health-related
basic need Employment Housing Food security Transportation
Potential COVID-19 Economic downturn Ability to quarantine Destabilization of food safety Public transportation systems
related challenges threatening small businesses compromised by living net as a result of illness and reducing frequency of routes
arrangements (e.g., shelters, physical distancing policies
Spike in unemployment due to Ride-share options reduced
group homes) (e.g., school closures, staff
businesses closing as a result with physical distancing
shortage at food agencies)
of physical distancing Increase in housing insecurity
due to inability to pay rent Rise in food insecurity due to
loss of income from layoffs
and reduced hours
COVID-19 exacerbates challenges across a variety of

universal basic needs (2/2)
Health-related Education and Safety (including racism/

basic need Social support language/ literacy discrimination)
Potential COVID-19 Elimination/reduction of in- Lack of educational support for students with Increasing discrimination against certain
related challenges person social support services special education or language needs during racial/ethnic groups
and socialization opportunities school closures
due to physical distancing Exacerbation of existing racial/ethnic tensions
Limited access to technology to continue with and economic disparities
online learning during shut down
Physical distancing/isolation and economic
Rapid flow of information about COVID-19 may stress may trigger domestic abuse
not be provided in appropriate languages or
channels to meet needs of hard-to-reach Economic stress may increase rate of crime
populations
Measures can be taken across levers to support people and

businesses at the local level
Preliminary & non--exhaustive
Lever Example specific measures
Protect current Support continued employment through targeted wage subsidies

employment
People Reduce barriers to accessing work (e.g., loosen licensing requirements)
Enable rapid returns
People-oriented interventions should be to the workforce Create COVID-19 response job portals to connect the unemployed or
tailored to account for underemployed underemployed with companies seeing spikes in demand
populations and vulnerable populations Ease critical expenses through residential loan forbearance measures or eviction
Support critical
needs freezes
Identify and communicate to beneficiaries of any stimulus funding measures to
ensure appropriate enrollment
Improve liquidity/ Ease financial obligations, e.g., postpone/waive taxes or fees for SMBs or hardest
cash flow hit sectors, commercial mortgage loan forbearance measures
Accelerate state’s payment of outstanding AP to state vendors
Businesses Facilitate process for SBA loans/grants, e.g., portal to support application prep
Business-oriented interventions should be Invigorate demand Target affected sectors and SMBs with dedicated state purchasing/ procurement
tailored to account for specific sectors (e.g. programs
tourism, airlines), business sizes (e.g., Shift attention to demand spikes and essential needs
SMBs) and regional differences (e.g., rural Support shift to remote operations, e.g., expanded WiFi coverage, targeted loans
Re-start/continue
vs. urban) operations for remote work equipment
COVID-19 readiness dashboard structure for state/local

governments High Medium Low
Foundational Societal Health system Industry Vulnerable Economic Composite

public health compliance capacity safeguarding populations health index
Score
23 76 54 15 25 32 11
Domain Mortality Compliance by Ventilators Ability to consume Eviction rates Unemployment Epidemiological
perform- Hospitalized high risk, medium Beds safely SNAP enrollment Bankruptcies Starting context
patients, risk, and low risk Portion
ance Intensive care Suicide rates Sales tax Rate of new cases
healthcare workers beds safeguarded of
metrics essential services,
Depression, New business immunity
Active cases Clinical workforce anxiety RXs formation
non-essential
Testing rate Hate crimes Solvency The science
services, schools
Mask availability Workforce Treatment
availability Vaccine
Tactics PPE/worker safety Public outreach Supplies (vents) Essential services Social sector Federal programs Domain
Testing Enforcement Physical space Non-essential Private sector State programs performance
Contact testing Support Clinical workforce sectors State programs State benefits Public health
Quarantines Direct intervention Education Federal programs Societal
Standards compliance
Masks Monitoring
Monitoring/ Health system
Low-regret tactics
compliance capacity
Activity restrictions Industry
safeguarding
Companies

Companies
Many uncertainties are 1 Future of work

Will COVID-19 driven changes (e.g., in remote work) accelerate other changes (e.g., greater
causing lack of clarity percentage of jobs done through gig-style contracts) that affects current plans on hiring & talent
management
on return planning for

2 Workforce safety
corporations What leading indicators How much advance warning Are there any employee
could precede a lifting of will federal, local, state segments that would like
1
shelter at home provisions? governments give before current remote work
Will less impacted regions shelter at home provisions arrangements to continue,
restart sooner than more are lifted? and can still be productive?
impacted regions? Will there be restrictions What new norms need to be
Will companies be liable if mandated by the defined and followed to
they return employees to government at the time of a ensure no spread in our
work and they fall ill? restart/ return to work? facilities?
Effective 3 Strategic shift to ‘next normal’

plan to Will COVID-19 driven changes (in the market, consumers, competitive landscape, other) result in
4 return to
sustainable
2 fundamental strategic shifts for the company soon after COVID-19, and will that drive the need for a
new set of skills that are not currently assumed in the workforce plan?
operations
4 Financial impacts
What will the extent of demand drawdown be? What do these implications mean for the
What are the chances of an economic recession (in workforce?
spite of bailout packages and other measures)? Will the bailout package (or post COVID
reform measures) include provisions
What implications would a potential downturn have on
3
that affect the organization in a
the business (revenue hit, liquidity issues, other)
fundamental way?

A basic framework for return to work planning
Who to transition
Workforce criticality Onsite critical Onsite flexible Virtual Other
Extent of Remote Work Possible
Extent of RW advisable long-term
When to transition
Shelter-at-home provisions
Local Public Health Readiness
<1 month 1-3 months >3 months
Return of demand locally
Readiness to travel
How to transition
Policies for at-risk vs. general employees
High Restriction Partial Restriction Next Normal
Communications & outreach
Pre-return capability building (new norms) Operations Operations Operations
Facility preparedness
Post-transition norms & preparedness

Companies
Who to transition: Four categories of workforce for the immediate

post-shelter-at-home environment
Maintain remote work, Define plan for staged Return to work with Transparency, reskilling,
while increasing return based on local increased work flexibility preserve company’s
flexibility context future
Focus on remote support, Identify milestones for starting a Define plan for return to work, Provide transparency into reality
productivity, connectivity, health safe return to work process (e.g., including staggered shifts and of situation facing company
Shift contracts where needed & local public health system slower ramp-ups Re-train or seek opportunities to
possible towards flexible readiness, government return to Re-train to move to more flexible shift focus
arrangements work guidelines) skill sets Other actions to preserve future
Develop detailed plan for return to Shift contracts where needed & of company
work based on key considerations: towards flexible arrangements
virus spread, guidance from public
health authorities, workforce
readiness to return to work, legal
liability

What you have to believe before returning your
workforce back to sustainable operations
When
to transition
Charting the path toward
returning to work and planning Shelter at Local public Demand within
for economic recovery home health situation region is starting to
provisions indicates return (in case the
are removed recovery region is a market)

When to
transition:
Example Return to work Example Economic recovery
Leaders must readiness milestones readiness milestones
monitor key Health system capacity Economic stimulus
milestones to >5 ICU beds per 10,000 adults Degree of distribution of government stimulus
>45 hospital (Med/Sur) beds per 10,000
chart path adults Social distancing behavior
Traffic congestion returns to within 30% of
toward recovery Case progression 2019
Rate of new cases falls below <8%
Businesses can anticipate Corporate confidence
<.02% of the population is currently sick
return to work and plan for Unemployment rate is going down
economic recovery by Testing and Tracing Purchasing Managers Index is over 50
monitoring readiness Positive tests represent <20% of total tests
administered Consumer confidence
indicators Consumer Confidence Index rises from
Availability of rapid testing
prior month
Contact tracing at scale infrastructure in
place Discretionary credit card increases for
two weeks
Progress toward 70% of population immune
(via vaccine, recovery, or tested immunity) Retail foot-traffic returns to within 20% of
pre-crisis

When to transition: An effective leading indicator dashboard can
help determine timing of recovery Indicates recovery
Indicators of recovery: Regions do not need to meet Priority Priority Priority Priority Priority
desired thresholds of all indicators to be “ready” region 1 region 2 region 3 region 4 region 5
Prerequisite Shelter-in-place • All shelter-in-place orders have been rescinded
Health system >5 ICU beds per 10,000 adults

capacity
>45 hospital (Med/Sur) beds per 10,000 adults
Case progression Rate of new cases falls below <8%
Readiness
<.02% of the population is currently sick
for return to
work Testing and tracing Positive tests represent <20% of total tests given
Availability of rapid testing
Sophistication of contact tracing infrastructure
Progress toward 70% of population immune
(via vaccine, recovery, or tested immunity)
Economic Stimulus Degree of distribution of government stimulus
Social distancing Traffic congestion returns to within 30% of 2019
Readiness
for Corporate Unemployment rate is going down
confidence
economic Purchasing Managers Index is over 50
recovery Consumer Consumer Confidence Index rises from prior month
confidence
Discretionary credit card increases for two weeks
Retail foot-traffic returns to within 20% of pre-crisis

Companies
How to transition: “Return to workplace” should be executed with

care
Sample employer interventions1
Ensure employees and customers stay > 6 ft apart

Sanitize high-contact surfaces
Interventions
Healthy Separate customers and employees from potentially ill individuals should be
human
Ensure hygienic handling of items that come in contact with the broader population (e.g., materials handling) assessed and
interactions
Mandate temperature checks upon entry evaluated across
key dimensions
Flexible sick leave so workers can stay home when ill including:
Support function flexibility (e.g. backup supply chains, contractors) • Effectiveness
Seamless
Manage absenteeism and enable remote work, rotating days/weeks of dealing with
business
the pandemic
operations Operate multiple locations without travel
• Implementation
Structurally limit physical contact between employees (e.g., barriers between workstations)
difficulty
Improve building conditions and airflow (e.g., ventilation, no-touch bathrooms)
• Disruptions to
Educate on good hygiene habits (e.g., handwashing, sanitizer) business
Safe work Routine and targeted deep cleaning (e.g., if an employee tests positive)
environment
Provide personal protective equipment where needed (e.g., facemasks, gloves)
1. Any steps on safety should be taken in accordance with CDC / local Department of Health guidelines McKinsey & Company 57
Source: CDC, OSHA
Companies
China example: Protocols specifically tailored

by sector can also help lower transmission (1/2)
Examples of protocols in manufacturing sector in China
Factory worker safety Logistics Large Electronic

Staggered working shifts, arrival times and Change in operating model, including Manufacturer
lunch breaks; temperature screening and running multiple drivers per truck asset A large electronics
sanitizers; physical distancing seating with staggered timings to fully utilize asset; manufacturer has introduced Workers sit spaced out and facing the
arrangements; worker space segregation of drivers, transfer points, and frequent temperature testing
decontamination; required to issue rest/cleaning checkpoints; drivers wearing same direction during lunch to reduce risk
and plans to give tens of of infection
personal protective equipment to all full protective equipment; ensure thousands of coronavirus
workers; wear masks at all times distribution center safety measures tests to workers along with an
equally large number of chest
Maximize worker availability Non- manufacturing function x-rays. Workers with elevated
temperature are immediately Some precautionary
Cover costs for travel/relocation for Implemented work-from-home measures include:
taken to a hospital, and those
dislocated workers returning to work (with accommodations to roles that are able to;
around them are closely
14-day quarantine for those returning from flexible work schedules and teleworking;
watched.
high risk provinces); flexible work hours; staggered work times to ensure availability
proactive assessment of worker health of research spaces while maintaining
codes (green/yellow/red) physical distancing Car manufacturer Body temperature Regular factory
After shutdown was lifted, a checks at arrival disinfection
Inbound supply car manufacturing facility
Suppliers, manufacturers, and customers gradually resumed operations
have shared resources proactively, given and has now returned to full
mutual dependence including PPE (masks, activities. Among other
disinfectants), idle transportation asset, and measures, employees are Workers having Having a mask
personnel; manufacturers have simplified also prohibited from sharing lunch in isolation disinfection
offerings to high running items, shifting apartments and provided cabinet every
focus to locally supplied SKUs, and key isolated accommodations 200m.
input suppliers are more closely tracked instead.
Source: Interviews with plant managers in China on March 21-24, 2020 McKinsey & Company 58
Companies
Singapore example: Protocols specifically tailored

by sector can also help lower transmission (2/2)
Examples of protocols in food and restaurants businesses in Singapore
Pre-lockdown, food & restaurants across the country Shopping malls and public venues continue to
rolled out several health safety measures to prevent operate with crowd control and physical distancing
contagion measures
One restaurant moved out One restaurant spaced their

around 10% of tables to touchscreen kiosks 1m apart with
ensure adequate spacing, staff will disinfect the screens every
ensure 1m spacing 15-30 mins. They will have 1m floor
between customers by markers along with safe distancing
placing 1m stickers at queue signages at various spots in stores. Crowd control measures in full force Malls limiting capacity of visitors
line, and collected Staff are also required to wear masks at malls, attractions and public venues, with queue for entrance screening
customer contact details and are prohibited from accepting sealing entrances
for contact tracing. personal cups. Limit capacity and disperse groups of
more than 10
Public areas implementing at least 1 physical distancing at public

metre physical distancing with seat transportation stops
markers
Source: Interviews with plant managers in China on March 21-24, 2020 McKinsey & Company 59
Companies
Approach for effective return to

sustainable operations for a corporation
Goals Approach
Define near-term roadmap Define post-COVID

workforce impacts in 2020
to restore sustainable time frame in different Segment employees into Defined detailed plans for
workplace operations scenarios relevant categories each segment
In parallel, re-imagine Define longer-term Refresh future of org plan Define roadmap to
scenarios, and portfolio of to include post-COVID connect & align near-term
the long-term workforce to strategic actions over time ‘next normal’ thinking plan to longer-term goals
align with new post-COVID
strategic objectives

Nerve center

Many leaders are experiencing a big
increase in COVID-19 issues…
COVID-19
initial issues
Business
as usual
issues
How do I protect my
people?
How do I ensure
transparency with
customers?
How do I stabilize my
supply chain?
How do I ensure
working capital?
…but there is a tsunami of ever-
more-complex issues that lie ahead
COVID-19 Economic Return to A new

initial issues recession work normal
Business
as usual
issues
How do I protect my We are in the middle Will we be in this This kind of sea-
people? of the biggest demand situation for weeks or change, for this long a
How do I ensure drawdown since WW2 months? time, will mean that
transparency with – Do we have a plan What will return to the world post
customers? to survive that puts work really look like, COVID-19 could look
everything on the and how can I do it very different than the
How do I stabilize my
table? without endangering world before it
supply chain?
my people? Do we know the big
How do I ensure
changes, and what it
working capital?
means?
Inadequate Constrained Solution
Discovery Design
Optimism bias, lack of adequate ‘sensing Many crises have a technical core, which needs
mechanisms’ (e.g., escalation failures), over- new solutions to be invented (e.g., BP top hat) or
reliance on past patterns, risk rationalization imported anew into the sector/ geography
Industrial manufacturer: pushed out fix timelines Energy company: Many public failures to fix
for failed product more than 12 times. Top process safety issue before success. Challenge
When facing management optimism bias was called out
multiple times by regulators, politicians and other
was that the fix needed new engineering
innovation
such a tsunami, observers
companies
make four Slow or Bad Decision Inadequate Delivery
Quality (Execution failure)
mistakes
Groupthink, political pressures, high-emotion Chaos during disruptions frequently translates to
situations; Unfamiliarity – pattern recognition- lack of accountability and direction, ‘operations
driven thinking fails; Desire to wait for more facts addiction’ on the part of top management, leading
slows response to failures of execution
Challenger disaster: NASA engineers pressured Automotive manufacturer: Was criticized for
Thiokol to change their ‘no-launch’ multiple aspects of recall activity (e.g., unclear
recommendation (Thiokol shifted their stance to terms and conditions, inadequate call center
satisfy their biggest customer) in-spite of a well- staffing, other challenges)
understood technical failure on O-rings.
The central question
Nerve centers
How can I increase my organization’s are a specific
capacity and speed to respond decisively organizational
to today’s issues… construct, meant for
institutions that are
facing existential,
…while uncovering the truth about high-velocity
the future, and shoring up disruptions, that are
defenses to meet it? designed to address
this question

How Nerve Centers achieve this – “team of teams” made of 4 teams
Deliver, Decide, Discover, Design
Evaluate possible
Deliver quickly & Team 1 – Deliver Team 3 – Discover scenarios – near-term
flawlessly on priorities to long-term & derive
provided by “Decide” Execution Scenario Planning implications; craft one
team team(s) team planning scenario for
other teams
Present Plan
focus Ahead
Ensure “Deliver”
goals are current & Team 2 – Decide Team 4 – Design Craft a portfolio of
progress is occurring;
Integrated Operations Strategic Moves strategic actions with
decide whether to
clear trigger points
trigger a strategic team team
move
Nerve Center needs to evolve from present focus to include plan
ahead teams
Nerve Center
focus shift Clear, unbiased
scenarios
Future Portfolio of strategic

actions (across
focus – Resilience)
Employee protection
Plan ahead Detailed plan for Return
Customer
management Present team New strategy for the
‘new normal’ -
Supply chain focus Reimagination &
Reform
Cash

A plan ahead team can offer quick responses to rapidly changing
circumstances using 5 frames
Please refer to this link to read the full article
Source: Getting ahead of the next stage of the coronavirus crisis, April 2020 McKinsey & Company 68
Nerve Center design
is based on military
command principles
Core concept: Create an Orient
organization that can Observe, Observe
Orient, Decide and Act faster than
the environment
Decide
John Boyd’s
OODA loop
John Boyd was a Colonel in the U.S. Air Force,
whose ideas on the art of war revolutionized U.S.
military thinking, especially after the Vietnam War
Boyd's key concept: The OODA loop. Act

The key to victory is to be able to make appropriate OODA loop of the effective organization
decisions faster than the rate at which the
OODA loop of the environment
environment evolves

Contents
01 02 03 04
19 responses

Market capitalization has declined across sectors,

with significant variation to the extent of the decline
Weighted average year-to-date local currency total shareholder returns by industry in percent1.
Width of bars is starting market cap in $ Healthcare Facilities & Services
Transport & Business Services
Infrastructure Defense
Commercial Real Basic Logistics & Healthcare Supplies
High Tech & Distribution
Aerospace Automotive & Assembly Estate Materials Trading Healthcare Payors Electric
Conglo- Chemicals & Advanced Power &
Air & Travel merates Agriculture Electronics Natural Gas Retail
Personal & Office Goods
Apparel,
Fashion, Consumer Other Financial Food & Medical Consumer
Oil & Gas Banks Insurance & Luxury Durables Services Media Telecom Beverage Technology Services Pharmaceuticals
0
-2
-4
-6
-8
-10
-12
-14
-16
-18
-20
-22
-24
-26
-28
-30
-32
-34
-36
-38
-40
-42
1. Data set includes global top 3000 companies by market cap in 2019, excluding some subsidiaries, holding companies, companies with very small free float and companies that have delisted since
Source: Corporate Performance Analytics, S&CF Insights, S&P Global McKinsey & Company 71
Even within sectors,

there is significant variance between companies
Distribution of year-to-date total shareholder returns by industry percent1
60 Inter-quartile range 90% percentile range Median x Weighted Average
50
40
30
20
10
-10
-20
-30
-40
-50
-60
-70
Healthcare Supplies & Distribution

Healthcare Facilities & Services
Electric Power & Natural Gas

Apparel, Fashion, & Luxury
Transport & Infrastructure
Personal & Office Goods

Other Financial Services
Chemicals & Agriculture
Automotive & Assembly
Commercial Aerospace
Advanced Electronics
Medical Technology
Consumer Durables
Consumer Services
Logistics & Trading
Healthcare Payors
Business Services
Food & Beverage
Pharmaceuticals
Conglomerates
Basic Materials
Air & Travel
Real Estate
High Tech
Insurance
Oil & Gas
Telecom
Defense
Banks
Media
Retail
1. Data set includes global top 3000 companies by market cap in 2019, excluding some subsidiaries, holding companies, companies with very small free float and companies that have delisted since
Source: Corporate Performance Analytics, S&CF Insights, S&P Global McKinsey & Company 72
Preliminary views of some of the hardest hit sectors

Based on the partially effective scenario
Commercial Air & Travel Oil & Gas Automotive

Insurance Carriers
Aerospace
Avg. stock price

change1
-40% -36% -34% -22% -21%
Oil price decline driven by Existing vulnerabilities (e.g.,
Industry specific Preexisting industry Deep, immediate demand US insurers have been trade tensions, declining
examples conditions, challenges with shock 5-6x greater than both short-term demand
impact and supply overhang strongly affected, especially sales) amplified by acute
airlines’ balance sheet Sept 11; ~70-80% near-term reinsurers and life & health decline in global demand
resilience, and high fixed demand erosion due to int’l from OPEC+ decision to
increase production insurers
costs cause near-term cash travel bans & quarantines now Mar. 26 Survey of US auto
flow issues and long-term prevalent in 130+ nations Oversupply expected to Reduced interest rates and consumers indicates 70% of
growth uncertainty. remain in the market even investment performance car buyers are deferring by ~6
N. Hemisphere summer travel impacting returns – esp. for mo. or no longer intending to
peak season deeply impacted after demand recovery, and
It may take years to recover longer-tail lines purchase; ~15% of Chinese
since pandemic fears coincide post 2020, unless OPEC+
from production and supply light vehicle volume loss in
chain stoppages, due to with peak booking period decides to cut production Disruptions expected in new
business and underwriting 2020 under current recovery
critical vendors located in Erosion of gas demand trend, and ~25-30% in EU
US gov’t is providing both processes due to
areas impacted by the virus driven by reduced power and US markets
grants and loans to the travel dependence on paper
and liquidity challenges and industrial activity,
industry as part of a broader applications and medical
especially amongst Tier 3 combined with historically Despite ongoing Chinese
package; analysts estimate underwriting
suppliers. high storage levels, puts economic restart, where most
grants will last major
carriers ~2-6 months downward pressure on overall Lock-downs around the world Chinese factories open again
Long order backlogs mitigate
gas price levels. Cash cost forced insurers to extend with production ramping up,
some concerns, especially on Recovery pace faster for there is continued supply
gas price economics grace period for renewing
narrowbody aircraft, though domestic travel (~2-3 expected in the next 1-2 the policies from 15 to 30+ chain and production
widebody demand could be quarters); slower for long- years, with potential volatility days that will lead to drop in disruption as majority of EU
structurally impacted in the haul and int’l travel (6+ in the 2023-2024 horizon premiums in 2020 and US OEMs have
near-term quarters) temporarily closed plants until
mid-to-late April
1. In last 30 days for selected sector indices
Source: IHS Market, McKinsey Global Institute, Subject matter experts, press reports, Corporate Performance Analytics, S&CF Insights, S&P Capital IQ McKinsey & Company 73
Air & Travel 9/111, YoY change Sept 2000 vs. 2001 2008 Fin. Crisis2, YoY change Feb 2008 vs. 2009 Now, YoY change Mar 2019 vs. 2020
Current Impact Medium-term expectations (through 2020) Early thoughts on evolution post-COVID
COVID-19 is an unprecedented crisis 70-80% Capacity reductions in April Convergence of remote work technologies,
biosecurity issues, and sustainability concerns
The initial demand shock is worse than 9/11 or the 2008 Financial Flights to and from Europe, Middle East, and Africa were among the hardest could structurally shift demand curves
Crisis hit ; Intra-regional flights within the Americas are least impacted to date, but
downward
likely to decline further
31%-45% reduction in airline travel demand is estimated in the two most Government intervention though a stimulus
likely scenarios, returning to pre-crisis status quo over a 1-2 year period package, to ensure there is not a liquidity crisis, may
US airline capacity (ASM)
have implications for industry structure as
7x bigger drop vs. Fin. Crisis A4 - Virus A1 - Virus re- increasingly involved interventions may impact
contained; strong surgence; slow
strategy and operations (e.g. equity stakes,
growth rebound long-term growth
conditions for support)
-11% Airline demand recovery dimensions for scenarios A1 and A4
-19%
Travel 1 month 12 month Given low oil price expectations for the short-
restrictions A4 A1 term, operating costs may be reduced but could also
impact aircraft leading market
-30-70%3 Demand ramp 6 month 36 month

up A4 A1
US hotel occupancy
8x bigger drop in occupancy vs. Fin. Crisis
Lasting travel No impact 10% reduction
behavior A4 A1
changes
-7% Deep, lasting Quick rebound to
-16% recession pre-crisis levels
GDP growth
A1 A4
-56% Yield None Past crises Extensive

stimulation A1 A4
1. For capacity, load factor, and occupancy, YoY change of Sept 2001 | 2. For capacity, YoY change of Feb 2009, for airline load factor and hotel occupancy
rate, YoY change of March 2009, for hotel stocks | 3. Based on latest capacity adjustment announced by AA/DL/UA | 4. Based on forecast from United
Airlines
Source: USDOT T100, STR (Week of March 15-March 21), press search McKinsey & Company 74
Commercial Aerospace Gross orders Cancelled orders Wide body aircraft Narrow body aircraft Years: Wide body Years: Narrow body
The underlying drivers for commercial aircraft equipment and 19-20YTD commercial aircraft orders, backlog, backlog years & deliveries Intrinsic demand for aircraft likely disappears in
services is driven by airlines; Airlines have significantly reduced 2020
capacity and grounded fleets Net orders1
Airlines 3,000 Airline balance sheet concerns will lead to restructuring

1,858 1,306 of order books; cash conservation efforts at airlines
2,000
constrain capital set aside for delivery payments
1,000 235
0
Demand Demand for
for maint. new aircraft -1,000 Low fuel price expectations for the short-term
# aircraft 2018 19 2020 YTD2 could extend life of older assets, but not into major
parts &
services heavy maintenance check cycles
~10 year backlog 6
Backlog
~10 year backlog 6 Government intervention may mitigate near-term
After- OEMs & Years
risk of employee furloughs and supply chain
market Suppliers 20,000 10
14,134 14,002 13,946 insolvencies
10,000 5
Demand for parts
0 0
2018 19 2020 YTD3, 4, 5
# aircraft
1. Narrow body orders declined 21% and wide body orders declined 18%
from 2017 – 19. Narrow body cancellations grew 4% and wide body
cancellations grew 5% during the same period
2. Boeing reported 18 gross wide body orders in Feb. and 43 737 MAX Deliveries
(narrow body) cancellations. Airbus reported 287 total gross orders 737 Max impacted deliveries
and 13 cancellations as of 3/15 2,000 1,582
3. Assumes 2020 YTD backlog = ‘19 backlog – ‘20 cancellations YTD 1,188
(56 cancellations YTD from Boeing and Airbus) ?
1,000
4. 2020 backlog years figures assume 2020 deliveries remain at 2019
levels 0
5. Calculates backlog years assuming no dip in 2019 and 2020 deliveries 2018 19 2020(F)
(deliveries remain at 2018 levels) # aircraft
6. Actual backlog is 14.6 years (backlog shown in chart assumes no dip
to deliveries in 2019)
Source: Cirium McKinsey & Company 75

Oil & Gas

LNG
COVID-19 has affected regions that account for over 80% of Based on our global COVID-19 scenarios, LNG demand will Following the sharp oversupply, volatility in the
global LNG demand; Chinese LNG imports (17% of global decline by 3-10% compared with pre-COVID-19 case to 320- market in the 2023-2025 horizon with sporadic
imports) fell by 7% yoy Jan-Mar 2020; buyers have triggered 350mtpa (compared with 380mtpa supply capacity). Near-term LNG tightness, followed by a period of oversupply (given
Force Majeure, cancelled cargoes and engage in contract prices will be driven by cash cost economics (with gas prices in 80+mtpa LNG capacity taking FID in the last 2
renegotiations Europe and Asia at $1-2/mmbtu premium to US gas prices) years)
Oil
Demand decline due to COVID-19 (5.4-11.4mbd for 2020 Global oil demand substantially reduced due to restrictions in Short term price dynamics that do not involve an
under A3 & A1 scenarios) and OPEC+ deal failure pushed road transport and capacity declines in airlines across the world OPEC+ intervention increase the likelihood of
oil prices under $30/ bbl. through Q3 2020 having an under-investment scenario play out in
the medium-term, resulting in a new price up-cycle
Low short-term oil prices are expected to continue for most of
Short term demand destruction (potential to be 20mbd for
2020 unless we see a large supply cut. Production shut-ins could
April) could lead to storage constraints and regional prices
start to materialize in the short term and help to balance the market. Orig. 2020 Projection
to fall even sharper, while US drilling activity has already been
Potential OPEC+ deal could be reached in the next few weeks
cut (90+ fewer rigs running, -10+% in the last 2 weeks). LNG demand, mt A1
Oil demand, Mbd
A3
99.8 100.8 -5.4 -11.4
94.3 450
88.4
Road 44.0 44.4

41.1
Transport 37.9
400
Aviation 7.1 7.3 5.1 3.9
350 -3%
48.7 49.1 48.2 46.5 -10%
2019 2020 Pre- 2020 Virus 2020 Muted 0

COVID-19 Contained (A3) Recovery (A1) 2018 20 22 24 2026
Source: Bloomberg, press search, McKinsey Energy Insights Global Energy Perspective, McKinsey analysis McKinsey & Company 76
Appendix
Leaders need to think and act
across 5 horizons
1 2 3 4 5
Resolve Resilience Return Reimagination Reform

Address the immediate Address near-term Create a detailed plan Re-imagine the “next Be clear about how
challenges that cash management to return the business normal”—what a the regulatory and
COVID-19 represents challenges, and back to scale quickly, discontinuous shift looks competitive environment
to the institution’s broader resiliency as the virus evolves like, and implications for in your industry may shift
workforce, customers, issues during virus- and knock on effects how the institution
technology, and related shutdowns and become clearer should reinvent
business partners economic knock-on
effects
Nerve center

1
Resolve
Address the immediate social and mental challenges
that COVID-19 represents to the institution’s
workforce, customers, and business partners, and
take basic steps to protect liquidity.

Resolve
Resolve: Making hard decisions on immediate challenges

Resolve employee, customer, supply chain, immediate liquidity, and technology concerns Private sector focus
Employees Customers Supply chain

How do we manage safety for the returning workforce How do I stay in touch with customers and remain relevant to them How do we create transparency across the supply
(e.g. in research labs, production facilities)? How do when they don’t desire or need my services? How do I inspire chain and customer demand?
we offboard in socially responsible ways? Is there loyalty in my customers?
Emerging
potential for employer controlled testing for
concerns employees?
Implement physical mechanisms to reduce Demonstrate flexibility to customers during times of hardship Monitor supply disruption risks by mapping
transmission (e.g., cleaning, staggering shifts) Major airlines are offering change/cancel flexibility. Most are supplier and sub-tier connectivity to COVID-19
also allowing passengers to reseat themselves on the plane in associated shocks
Example Invest in facility and employee level equipment
actions and supplies (e.g., cleaning) accordance with physical distancing Monitor extending lead times to gauge
Going out of their way to keep customers and employees safe performance and capacity against supplier
Over-communicate with all employees on current promises
and future plans to keep employees safe regardless of impact to balance sheet
Hotels in Europe and Asia are providing “quarantine” service Map inventory end to end across the supply
Reskill and redeploy instead of offboarding (e.g., room reservation with nobody next door) chain to identify current days of inventory and to
employees where possible predict impacts of disruptions
Grocery stores are limiting purchases of essential items,
Explore creative employment solutions (e.g., loan limiting the number of customers in store, and temporary Validate realistic final demand with customers
talent to other orgs, divest business line) closing locations for deep cleans, among other safety measures and ensure customers aren’t exhibiting bad
Leverage and educate employees on applicable Demonstrate commitment to healthcare behaviors
government support and benefits programs Coffeehouse chains, car rentals and shoe companies are Predict production capacity, logistics capacity,
Screen employees, visitors and clients based on offering free products and services to healthcare workers and availability of supply
temperature checks, travel history and self-reported or Furniture distribution centers are being repurposed as testing Establish four control towers to guide
visible symptoms centers for NHS workers demand/capacity/S&OP decisions and manage
Offer testing or covering the cost of testing Other examples of companies being ‘agile’ in attracting supply chain risks working with the Corporate
motivated by symptoms, contact tracing, travel customers Nerve Center
history, etc. Rideshare companies are pivoting to delivery
Local restaurants and restaurant chains are offering free and
contact-free food deliveries
Resolve
Employees: Companies should invest and prioritize to protect the

safety and morale of employees unable to work from home
Private sector focus
Non-WFH employees face However, best-in-class companies are finding new ways to address employee
a unique set of concerns… concerns while protecting them from unnecessary risk:
Perceived unfairness: having to Food delivery Leading UK Leading Italian Global coffee
MajorU.S.
continue going into work while companies retailer banks shop retailer
retailer
other employees stay home with
their families Flexible work Minimizing Extending Limiting Offering 14 days
policies including contact between benefits to operating hours of “catastrophe
Safety risk: significant increase
in potential exposure to disease relaxing deliverers and include back-up for all branches pay” forU.S.
(e.g., commute, customers and absenteeism customers (e.g., child and elderly with access workers exposed
other employees in the policy (i.e. cashless payment care (up to 25 granted only upon to COVID-19,
allowing workers only, leaving bags days) and mental pre-arranged over 60, pregnant,
workplace)
to stay home for at door, all health benefits appointment to or have
Perceived value: Don’t feel as personal reasons) employees (e.g., teletherapy minimize contact underlying health
valued by company and that provided masks sessions) and increase issues (in addition
their safety is not prioritized and gloves) sanitization time to existing sick
Fear of illness: In addition to pay)
clinical harm (e.g., fever, body
aches), fear of being isolated
from their families if ill
Source: company websites, press search McKinsey & Company 81

Resolve
Employees: We have observed 4 key levers to maximize

engagement & productivity of work Private sector focus
from home colleagues

Respondents to the survey Energy levels started to improve as increasing
A study China demonstrated a decrease
attributed the declining energy value normalcy was established aided by 4 levers that
in energy level during the pandemic
to 3 primary factors companies used
Energy Value People Provide psychological safety (e.g., delegate

decision making powers, role model empathy)
“What is your energy level from 1-10?” asked to
1,300 employees across 50 companies in China Communicate practical WFH tips (e.g., family
spanning 8 sectors communication, physical and mental need mgmt.)
Blurred boundary between work and
Structure Define clear objectives and key results (OKRs)
8.2 life
8.2 to effectively set and communicate goals and
7.8 outcomes
Allow high degree of autonomy in decision
making with collaboration across BUs
Process Establish a clear cadence (e.g., pre-scheduled

Anxiety deepening as the epidemic daily and weekly meetings, frequent check-ins)
unfolded Define clear and integrated workflows, align
strategic goals and clarify roles and
responsibilities
Technology Leverage a suite of digital tools / new media to

address specific work needs
Before Early crisis Late stage Telecommuting unsuitable for current
Setup an effective ergonomic, digitally enabled
outbreak (late Jan – (late Feb – remote working environment to ensure
work flows productivity
(early Jan) late Feb) present)
Source: McKinsey GC Org Team McKinsey & Company 82

Resolve
Customers: Set up agile Rapid Revenue Response squads to drive

progress during the pandemic for B2B & B2C companies Private sector focus
Deep-dive to follow
Phase 1: Reset Phase 3: Read

Phase 2: Activate key levers
and calibrate and respond
Understand which trends Prioritize B2B and B2C commercial levers to pursue: Evaluate
and pockets are growing performance of
Sales and channel: Identify realistic opportunities and high
by analyzing customer tactics activated,
growth channels, build remote selling capabilities, invest in
insights, sentiment, and likely re-setting ROI
Repeat and optimize: “Activate key

customer outreach and customer service preparedness
demand signals measurement
levers” and “Read and respond”

Diligence all your current Pricing/Promo: reset pricing / discounts to meet customers’ approach
commercial activities - evolving near-term needs Continually optimize
from sales to Marketing: Reinvest marketing spend across opportunities and tactics that work
communications to high-traffic channels that will drive highest ROI growth; ensure Align on next wave of
expenses tone is sensitive, relevant and authentic commercial tactics by
Align on value integrating new
proposition and what truly Product / CX: Adjust offerings/SKUs to meet customers’ demand customer insights and
aligns to the immediate signals; establish genuine connection with customer and market demand signals
needs of your customers employee needs
or prospects Commercial Cost/Cash: Manage discretionary spend, both
working and non-working, re-allocating rapidly
Source: McKinsey Marketing & Sales Practice McKinsey & Company 83

Resolve
Customers: Deep-dive on Sales & Channel and Pricing &

Promotions for B2B and B2C companies Private sector focus
B2B B2C
Identify and prioritize highest ROI sales initiatives Identify existing high-growth channels (e.g. eCommerce) and
explore launching new and innovative channels— especially
Sales and Review customer account coverage based on the customer’s new
leveraging the gig economy with new workers are likely entering the
channel operating model
workforce daily
Empower sales teams to sell remotely with remote trainings,
Ensure digital shelf and assortment are fully represented
adequate remote working equipment and a realistic view of pipeline
opportunities Empower salesforce for remote and virtual work
Invest in internal information and update demand tracking and Optimize on-site performance and double down on customer
forecasting service preparedness
Get creative with customer outreach – pull in leadership, invest in
company banners for video backdrops, shift some rewards and
recognition to new work-from-home reality
Understand customers evolving needs Refresh item segmentation based on new shopping behaviors
Pricing
and Implement “flex pricing”, value-focused messaging and loyalty Cater promotions to the current context with a focus on “if/then”
discounts rewards. Think about way to meet near-term customer needs, without plans, context specific products and services, eCommerce channels,
needlessly destroying long term value (e.g., de-bundle offering, one etc.
time discounts)
Constantly reevaluate promotional effectiveness through the crisis
Ensure efficient deal execution process. Stand up a “value council”
to develop clear guidelines and objectives for the commercial team to Consider loosening return / cancellation policies and offering
follow financing opportunities for larger purchases
Source: McKinsey Marketing & Sales Practice McKinsey & Company 84

Resolve
Supply chain: Actions to consider in response to COVID-19

Private sector focus
Immediate (1-4 weeks) Mid-term (4-12 weeks)
Understand Estimate how demand changes across customers Continuously Identify alternative options based on
exposure q Leverage direct communication channels with direct customer when determining demand signals improve material anticipated demand
q Use market insights/external databases to estimate demand for customer’s customers supply stability q Evaluate alternative sourcing options for
q Task S&OP team to build 3-6 plans under a range of demand scenarios month to determine required supply all the materials impacted – availability of
Determine how supply will be impacted and understand key risks suppliers, additional cost due to logistics,
q Work with tier 1 suppliers to understand supply chain risks throughout all tiers; complement with outside-in tariffs, estimate of price increase of the
analytics where tier 1s do not have transparency components
q Account for all inventory (e.g., in transit, in warehouses, in spares stock) and calculate inventory buffer q Enhance the demand verification process
q Conduct scenario planning to understand how inventory buffer changes in various disease scenarios to correct inflated demand to mitigate the
q Run supply chain “stress tests” vs. supplier balance sheets to understand when supply issues will start to stress bullwhip effect
financial or liquidity issues Provide support for smaller suppliers
q Assess whether border closures or restrictions will disrupt supply chain q Provide continuous support for mid-small
size tier 2-3 suppliers in financial troubles
Take action to Evaluate any option for new supply sources
address q Identify alternative sources if supplies are affected and accelerate exploration of additional options q Assess regional risks for current and backup
anticipated suppliers
q Determine possible geographies and supplier shortlists in case alternate supply is required
shortages q Identify ways to expedite qualification process and/or insource for components where supply is threatened Kick off designing Codify & digitize processes and tools
q Contact authorities in areas where customs clearance could become a challenge resilient supply q Codify the processes and tools created
q Determine what portion of supply can be swung to another site if shutdown persists based on sourcing chain for the during the crisis management as formal
strategy (single, dual, multi) future documentation
Revise production plans as required based on: q Digitalize process and tools to integrate
q Expected supply shortages demand, supply, and capacity planning
q Products in most consumer need, with highest margin, or and highest opportunity cost / penalty production Develop systems to “bullet proof” supply chain
Understand robustness of current supply chain logistics
q Convert war room into a reliable supply chain
q Estimate available logistics capacity; pre-book air freight1 / rail capacity as required by current exposure risk management process
q Collaborate with all parties to jointly leverage freight capacity, new/alternate supply sources, etc.
q Ensure stakeholders address vulnerabilities
Other actions
across all parts of the supply chain
q Watch for extending lead times to gauge performance and capacity against supplier promises
q Trigger the new supply network design for
q Use after sales stock as bridge to keep production running if needed
resilience
Protect q Work with supplier to source personal protective equipment for production lines operating in affected markets Build collaborative q Work with government to ensure
employees (e.g., glasses, gloves and masks) relationship w/ ext. industry can ramp up as quickly as
and suppliers q Engage with crisis communication teams to clearly communicate to employees on infection risk concerns (e.g., partners possible as crisis resolves
disseminate facts about virus from credible source) and work from home options q Actively engage investors and other
q Consider short-term stabilization for suppliers (e.g., low-interest loan) to allow for a faster restart stakeholders to build transparency on the
situation and get help
1.Given costs, airfreight might not be an option for many industries; availability is already limited McKinsey & Company 85
2
Resilience
Address near-term cash management challenges,
and broader resiliency issues

Resilience
6 steps toward end to end resilience plan
01 03 05
Identify and prioritize key Conduct stress testing of Set up a cash management
risks financials dashboard
Identify and prioritize key macro, Stress test the P&L, Balance Sheet, Improve cash transparency and
sector and company idiosyncratic Statement of Cash Flows to assess and implement tighter cash controls to
risks based on exposure and impact frame the potential gaps for planning mitigate downside scenarios
02 04 06
Develop tailored scenarios Establish portfolio of Build the resilience
interventions dashboard
Develop company specific scenarios Identify an end to end portfolio of Build the dashboard of key leading
based on the range of outcomes of the interventions and trigger points indicators to monitor that can be
highest priority risks dynamically updated

Resilience
1&2: Efforts require continuous re-evaluation of financial

and market forecasts and corresponding actions
1. Identify key risks 2. Develop tailored scenarios
Key Understand the impact of key macroeconomic variables Develop scenario narratives for Baseline and ~2-3
activities (e.g., GDP, unemployment rate) on performance of your of adverse scenarios, with overlay for duration and magnitude
PnL (e.g., revenue and cost) of Covid-19 near term shock
Impacted PnL variables could include: Contextualize scenarios with assumptions on
— Volume: consumer demand correlated with GDP macroeconomic variables (e.g., in worst-case GDP declines
— Cost: Commodity price evolution (e.g., oil and gas, food 20%)
index) correlates with COGS For each scenario, link macroeconomic projections back
— Price: housing prices and inflation correlate with price to PnL (e.g., best-case scenario includes 10% drop in
customers are willing to pay demand, 20% drop in price, and 30% drop in COGS)
Refine a final list of no more than ~20 macroeconomic Ensure scenarios capture strategic, financial and
variables with quantified impact to key PnL items operational risks with consideration of 2nd order impacts
Sample
output
Source: McKinsey Resilience tribe McKinsey & Company 88

Resilience
3&4: Efforts require continuous re-evaluation of financial and market

forecasts and corresponding actions
3. Conduct stress testing of financials 4. Establish portfolio of interventions
Key For each scenario, Prioritize critical areas of exposure and areas of lower/risk
activities — assess impact on the financial statements (P&L, uncertainty
Balance Sheet and Cash Flows) Define & size portfolio of potential interventions (across
— assess gap relative to Baseline operations, supply chain, capital, targeted M&A and
Run simulations at Corporate level to assess range of divestitures and customer engagement)
outcomes to assess impact on credit quality, cash and Launch quick wins on immediate stabilization (supply and
liquidity demand-side) related to Covid-19
Run 'reverse stress-tests' to determine conditions for Identify which are “no regrets” vs. trigger based and get pre-
credit/liquidity crunch approval for higher risk moves, with clear agreement on
conditions for activation
Sample Enterprise value

U.S. $ Millons
EBITDA
Percent of baseline forecast
Cash flow
U.S. $ Millions
output -20%
-15%
2008 09 10 11 12 13 14 2015
BU1 Credit rating reduce
BU2
Banking covenants broken
BU3
BU4
Other Bankruptcy 20% additional cash
Baseline Scenario 1 Scenario 2 2008 09 10 11 12 2013 required to survive
Source: McKinsey Resilience tribe McKinsey & Company 89

Resilience
Bubble size represents typical cash impact
5: Example
Typical EBIT impact
(% of cash release) Receivables Inventory Payables Cross-cutting
cash “Structural
Enforce late E2E customer
management Positive
to neutral
“Immediate cash
opportunities”
changes” Stoc
segmentation,
reorder
payment interest credit risk
management
dashboard:
(≥ 0%) Automate reorders,
Collect algorithm payments, billings
Payment and
overdues billing runs
Prioritization Bad payors

Production
batch size,
Standardize
parts
just in time
of initiatives Somewhat
negative
Reorder freeze,
smaller batches
Payment terms
(1-5%) re-negotiation
related to Inventory
pooling
Outsource
Reduce
SKUs
cash Factoring
receivables
some
production Supply
chain
financing
Not Exhaustive Substantial
(>5%) Sell old stock
Write off
“Fast but
old stock1
painful”
Fast (< 90 days) Medium (3-6 months) Slow burn (6-12 months)
Time to cash release
1. No cash release
Source: McKinsey Transformation McKinsey & Company 90

Resilience
6: Example resilience scorecard: Outside-in perspective

& select benchmarks
“Inside assessment” would reveal “strengths & weaknesses” in Co 1’s resilience
DISGUISED EXAMPLE
Metric performance Rank
Marker of resilience Metric (outside-in metrics) Co 1 Co 2 Co 3 Co 4 Co 5 Co 1
Through cycle Track record of growth Short-term Sales growth, 2018-2020 CAGR % -10% 5% 10% -5% 5%
interventions:
Revenue Long-term Sales growth, 2013-2020 CAGR % -5% 5% 10% 5% 15%
Through cycle Starting point of cost structure & Gross Profit/Sales %, 2020 25% 10% 30% 15% 20%
interventions: track record of margin
Costs improvement SG&A/Sales %, 2020 6% 7% 9% 8% 5%
R&D/Sales, 2018-2020 avg 10% 8% 4% 6% 2%
Long-term Adj EBITA margin delta, 2020 vs 2013 %pts 2% -5% 10% -5% 2%
Long-term TRS track record Long-term TRS, 2013-2020 avg (also revenue contribution indicator) 10% -5% 10% 5% 25%
Sharp Digital [...] N/A outside-in measurement
Unlock Balance Healthy Balance Sheet with (Net debt and pension + OPEB) /market cap, 2020 0.5 0.2 (0.2) (0.5) 0.2
Sheet sufficient headroom
(Net debt and pension + OPEB) /EBITDA, 2020 1.5 0.5 (1.0) (2.0) 0.5
Band of C-suite and Board having % of C-suite leaders who have been in C-suite roles during last recession 50% 40% 20% 50% 45%
Leaders diversity of background and % of Board members who have been CEOs of F-1000 companies during
relevant experience of leading 30% 20% 0% 0% 10%
major crisis events/ downturns
businesses through a downturn
% of C-suite leaders who have a different background from the CEO 100% 70% 85% 75% 30%
Organization
Lower Org complexity FTE per Sales (# Employees per $M USD), 2020 (outside-in indicator) 1.0 1.2 1.5 1.5 1.8
Simplification
Resilience Early, disciplined decisions in the Short-term change in Adj EBITA, 2020 vs. 2018 %pts 0% -5% 5% -5% 5%
Nerve Center past – indicator of a nerve center
driven approach Change in (Net debt and pension + OPEB) /EBITDA, 2020 vs. 2018 % 0% 50% -10% 90% -50%
Source: McKinsey Resiliency Tribe McKinsey & Company 91

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COVID-19:

Copyright @ 2020 McKinsey & Company. All rights reserved.

COVID-19 is, first and foremost, a global

Companies around the world need to act promptly.

Read more on McKinsey.com

McKinsey & Company 2

The situation now

McKinsey & Company 3

McKinsey & Company 4

The global spread Impact >1.91M >119,500

~0.1% ~38% ~46% 3

The virus has spread Total cases >913,300

Total cases >83,500

Total cases >10,200

Total cases >619,000

1,000-9,999 reported cases Total cases >48,100

Source: World Health Organization, Johns Hopkins University, McKinsey analysis

The greatest share of cases come from Europe and the

Sources: WHO situation reports, Johns Hopkins University, press search

Countries begin with similar trajectories but curves

Cumulative number of cases Select country detail

600,000 Italy  Europe: Multiple European countries

Countries with the widest testing tend to

1. Number of deaths / confirmed cases

State of the Science: Latest evidence on COVID-19

A. Viral viability varies among setting and surfaces, but impact on

Viability/ survival duration of virus Mode of transmission

McKinsey & Company 11

B. Estimates of the number of asymptomatic patients, case fatality ratio,

Metric Expert estimate range WHO / CDC estimate

Asymptomatic It has been estimated that between 20-50%1 of all

Case Fatality The case fatality ratio (CFR) of all infected

1. Bloomberg, ijidonline, ECDC, Eurosurveillance, The Hill

Source: Expert interviews and McKinsey Analysis McKinsey & Company 12

C. There are over 80 vaccine candidates and 130 therapeutics candidates

Initial clinical Efficacy in

Monoclonal and polyclonal

D. At scale use of masks can have a role in reducing transmission of

There are two main modes of South Korea2 Japan3

However, cloth masks may not be effective against airborne aerosols

I Localized clusters II Uncontrolled acceleration III Spread deceleration IV Control

A. Physical distancing / quarantine

E. Healthcare capacity surge

Countries with the widest early testing

South Korea quickly built the infrastructure required to conduct wide-

I Local clusters II Uncontrolled acceleration III Spread deceleration IV Prevention of recurrence

A: Physical Began daily government Shut down schools Re-emphasized importance

I II Local clusters / uncontrolled acceleration III Spread deceleration IV Prevention of recurrence

C: Effective Use of Issued order for masks to be worn in public

E: Healthcare Began to build temporary dedicated hospitals

Austria has released plans to gradually reopen businesses and ease

I II Local clusters / uncontrolled acceleration III Spread deceleration IV Prevention of recurrence

E: Healthcare capacity Provided government funding for hospital equipment

I Local clusters II Uncontrolled acceleration

Emerging economies face unique challenges across public health

C: Effective Cost of medical-grade PPE is burdensome Raise COVID-19 awareness

Source: https://economictimes.indiatimes.com/news/international/world-news/coronavirus-in-india-what-is-happening-and-what-you-should-know/articleshow/73978271.cms?from=mdr, https://www.washingtonpost.com/world/asia_pacific/india- McKinsey & Company 21

McKinsey & Company 22

The Imperative of our Time

1 “Timeboxing” the Virus and the

1c. Find “cures”; treatment, drugs, vaccines

Safeguard our livelihoods

Source: McKinsey analysis, in partnership with Oxford Economics

600,000 Italy Europe: Multiple European countries

the Return from Protect and restart the economy

Low Readiness to Virus spread New daily infections

Effectiveness in tracking and isolating

and services taking Automotive

longer Returned to 97% operating rate, 82% of

Protect current Support continued employment through targeted wage subsidies