The short-term impact of COVID-19 is undisputed, what is not yet clear is the long-term changes that the pandemic will have wrought on the world of business. I started 2020 writing about three themes for the decade and I am convinced that the last few months have dramatically accelerated their impact.
Back in January, when the new decade seemed to be a smooth transition from the old, I predicted an increase in skill specialisation, emergence of information-driven business models and the search for business simplification in aid of productivity (see Bridging themes for the 2020s). What the pandemic of the last few months has done is shift the focus even more onto these themes.
Understanding why the pandemic is causing these shifts is important if we are to make the right decisions now to set ourselves up for an uncertain future. If we’ve learnt one thing this year, it is the value of fast decision making in the face of a health and an economic crisis.
The world of 2019 was one characterised by predictable and long-term economic growth to such an extent that growth and organisational purpose seemed to have become confused. Survey after survey showed that the community had lost their trust in the institutions of traditional media, government and business.
Associated with the loss of trust was a general fear of innovation and change in the way we work, with many believing that innovation was simply shorthand for automating or offshoring their jobs.
Despite the wide availability of technology to work remotely, where we were located mattered and most people sought to spend their time in the office near the people they worked with.
Amid all of this, there was a sense of unease at the growing climate crisis and a demand that governments take action. Having said that, the general political mood was that carbon reduction could not occur at the cost of economic growth.
It is very likely that as the health crisis subsides, the world that emerges will be quite different. Almost every crisis in history has had a side effect of accelerating both scientific and social changes that were already in progress. There is every reason to believe that COVID-19 will be the same.
The predictable long-term economic growth leading up to the pandemic seems to be consigned to history. Jim Collins wrote in “How the mighty fall” about the “hubris born of success”. After so many years of relatively predictable economic growth, it was easy for growth to become a goal in its own right. Specialisation is now key, as individuals and for organisations. The priority is shifting for most businesses to a simplified portfolio of specialised products or services that are individually growing or shrinking but in combination are sustainably profitable.
Employees best support this portfolio by greater focus and specialisation combined with ongoing training. Employers need to sustain their portfolio by investing in the skills of their people as much for their future needs as realising today’s priorities. This combination sustains a shifting but profitable portfolio approach.
The worldwide experiment in remote work which has seen countless millions of people working and learning from home has created new digital muscles which won’t be lost in the coming years. It is now likely that rather than staffing and learning from the best person to be available in-person, we will look to the best person available anywhere. This will further drive the push towards specialisation and also lift the quality of work and education.
To commit ourselves to innovating, training and specialising in our jobs we have to trust the organisations we work for and with. Fortunately, the pandemic has seen a re-emergence of this trust. The crisis has seen employees and customers re-engage with institutions including business. An important reason is that information is a currency that traditional institutions, including business, are able to more successfully source, assemble and disseminate.
While there is a risk that the trust that has been earned through the crisis by business, media and most governments will be lost when the crisis has ended, the foundations for long-term information-driven business models has been established. The newfound trust can be maintained as our institutions adapt these models to be an integral part of their future given the tight coupling of trust and trusted information.
A significant reason for the breakdown in trust of the last decade was a sense that the social license of organisations was being breached. People didn’t feel that organisations were enhancing society or the planet. With the benefit of hindsight, far from aiding the social license, a push to respond to climate change by only tackling carbon while claiming inequality and economic growth could be kept unchecked eroded the credibility of the very institutions that are suddenly back in vogue.
A more credible approach is now emerging for the 2020s: economic, social and environmental resilience and sustainability. It is by balancing all three that some good can come out of the terrible harm of COVID-19.