What the future may hold post COVID-19 ... and what it means for you

The COVID-19 crisis brings operational efficiency into sharp focus.

Although we had advance warning of the impending pandemic in January, very few could have predicted the impact it would have. And those that did, notably Bill Gates in his TED talk, were largely ignored or in some cases, accused of scaremongering. It was just never going to happen.

The lockdown came upon us swiftly, and in a matter of weeks, changed life as we know it.

The impact on the global economy has been devastating, with stock markets crashing and the oil price plummeting below zero at one point. A large number of industry sectors have practically shut down. The Bank of England has warned that the virus outbreak could push the UK economy into its worst annual fall for more than 300 years, and it’s predicted that unemployment in the UK could rise from 3.9 to over 20% in the coming months.

And countries have realised they cannot rely on others to provide key items such as medicines, medical equipment, and their global supply chain. And acting only in their own best interest creates a mistrustful landscape for the future.

Time will tell whether there will be a recession, but the sharp collapse in revenues, for both businesses and their suppliers, means that even if we manage to avoid recession, the global economy will take considerable time to recover.

It’s not all gloom and doom

Other, more fortunate sectors have faced unprecedented increases in demand, and businesses have had to take decisions more swiftly than ever before, under severe pressure, without the usual requirements for data and analysis to back them up.

Businesses with good disaster recovery plans in place, and those where flexible working and working from home were already the norm, would have been in some way prepared. But the speed at which the global lockdown happened, and the fact that their customers, their partners and supply chains were as badly affected as they were, left many blindsided. Sourcing alternative suppliers proved very difficult as the pandemic affected everyone.

Global business leaders surveyed in a recent study led by Arthur D Little entitled “Leading businesses through the COVID-19 crisis” highlighted the importance of securing employee and customer safety ahead of any other business considerations, with frequent and clear communication with both employees and customers rising to the top of their agendas. The report assessed the impact of the pandemic on their businesses, how they responded, their key learnings, leadership challenges, plans for rapid recovery and any positives that could emerge from the crisis for their organisations.

It is likely that the impact of COVID-19 on our lives will continue well into the next year, and probably beyond, at least until there is an effective vaccine and people feel safe to resume life as normal.  We may find restrictions are eased, and then reimposed to prevent or manage a new outbreak, locally or abroad.

It is not an exaggeration to say the world as we knew it is over. We are, knowingly or unknowingly, shaping what is to come.

Who fared well?

It is clear that ‘tech-first’ businesses, or those with an existing robust digital programme, were well-placed to respond swiftly to meet the changing needs of their customers. According to a recent McKinsey article, “Digital Strategy in a time of crisis” businesses that once mapped digital strategy in one- to three-year phases are now scaling their initiatives in a matter of days or weeks.

Having said that, it clearly depends on the nature of the business concerned and how their sector has been affected, as an example, the devastating effects on companies such as Airbnb as mentioned in a recent article.

The businesses that consider their digital development as their ‘IT department’, or who had not yet embarked on a digitalisation programme, will not have fared as well, and this may well be a catalyst for change, as they will need to adapt swiftly – changing their business models and going all-in with digital. This will mean an increase in operational costs, but moving towards a more startup-like, digitalised model may be their only way of ensuring survival in a competitive market. Short term – for long term benefits (saving now)

At the other end of the scale, businesses burdened with heavy development costs, spending hundreds of millions annually in their relationships with incumbent suppliers are finding this to be unsustainable, and they are currently having to look at changing the way they do things in future.

Where change may have seemed difficult or near-impossible in the past, one of the positive outcomes will be the opportunity to restructure, and slim down.  Whilst there are a lot of unknowns, what is certain is that budgets will be cut, and what remains will have to be prudently managed as businesses prioritise what’s important.

This may mean that working practices may change for good. Businesses will be smarter, leaner, and able to go further and faster than ever before.

Large corporate offices, excessive business travel and related expenses, excessively bloated teams, may well be a thing of the past, with priorities adjusted to meet the changing demands of their clients/markets in the ‘new world’, and expenditure reduced to what is deemed essential. This will also be a boost for their sustainability agendas, with the pandemic bringing the 3 ‘P’s of Corporate Social Responsibility – People, Planet and Profit – “the triple bottom line”, into sharp focus.

At an individual level, now that effective remote working has been demonstrated, travel costs and time spent commuting could now be reduced dramatically, if not eliminated altogether.

Working from home has meant working in a more agile way, and it has accelerated digital transformation for many businesses. Technology changes that would under normal circumstances have taken many months to implement, were put in place within days.

The rise in popularity of Zoom has led to a change in the way that meetings are held, and the way that teams are organised, and the increased use of Slack (up to 12.5 million connected people in March) enabled teams to communicate effectively while working remotely.

Many people will not be returning to work as we know it. And still others will not return to work at all – this may be through choice, with many people deciding now that they want a better work-life balance, or through businesses down-sizing and the ensuing redundancies. Many businesses are in the process of deciding “which people they keep in the boat”, that is, who are the key players who will make it go faster and further as they face pressure to reduce headcount?

Companies embracing remote working may benefit from a wider talent pool as there won’t be the constraint of location.

Contractors, freelancers and gig-economy workers have been hard-hit by the pandemic, with no security of employment, or government support as part of a furlough scheme. This, together with the new IR35 legislation now delayed to April 2021, may well drive a return to permanent employment - security can trump flexibility in challenging times. Whilst jobs will be lost through redundancy, we may see a rise in part-time employment.

Predictions about the “future of work”.

The ways in which we work were expected to change dramatically over the coming decades, driven by increasing adoption of AI and automation. We may find this is accelerated as businesses choose (or are forced through economics) to reduce headcount and payroll costs across their operations. This may mean that the introduction of a universal basic income may be closer than we think, brought about by necessity, as businesses accelerate their digital programmes, reducing headcount, resulting in fewer opportunities for employment.

Whilst businesses are constantly striving to increase their operational efficiency, with key levers including next-gen automation, channel optimization, advanced analytics and IT rationalisation, it’s very clear that operational efficiency can’t increase without the right people and processes in place.

What does the future hold? Time will tell. My hope is that we create a sensible balance between people, profit and planet as we continue into this new decade.

 

Cathryn Hindle,  Director of People

cathryn@askslate.com

11 May 2020

 

About Slate

If your business is bogged down by legacy technology, and you’re spending millions every year on your digital programme, Slate helps you move past this. Our proven sweet spot is reducing the cost of digital change.

Digital change in corporations requires a “start-up mindset”, however, people with a start-up mindset tend not to work for corporates. We provide a small capped team of incredibly smart technologists, problem solvers with ‘start-up thinking’, for just as long as you need them. 

Our developers work within your own Enterprise IT team, working on your technology, your digital capability, upskilling your own employees along the way and reducing your dependence on any existing incumbent suppliers, saving you millions in the process.

To find out more, please email me or visit us at AskSlate.com

fsqs registered logo