22 May Are We Ready To Embrace A New World Order?
As the Coronavirus outbreak plays out, we feel these effects locally and globally. Through these surreal times, we all have gotten closer and engaged in more direct ways, face to virtual face and less passive interactions with our devices. With our quarantined partners, we play more board games; we watch TV together; we spend more time in real-life conversation; and we eat together at the dinner table. In a world where we crave social connection, we continue to find ways to interact outside our environment despite our isolation. We have greater empathy as the virus is here to stay, so we are compelled to change the way we think and the way we behave. For once, the world is in sync. Covid-19 has hit all of us – all cultures, all timezones, all walks of life. Immunity is a non sequitur. Collectively, we battle the Coronavirus – it is part of our daily life. We are at war with mother nature. Perhaps, she is giving us a lesson from nature, enabling us to rethink what we’ve known as truth, to change our ways and redesign how we live, work, and interact with each other, and redefine access to our supply chain.
Growth in an Era of High Uncertainty
The Coronavirus has claimed its victims. The IMF predicts 2020 will take a “contract sharply” by -3%, much worse than the 2008-2009 Financial crisis. What this pandemic has revealed is an industry completely unprepared to manage the fallout. It has exposed many companies that are bloated and have more than enough staffing to do the tasks needed for companies to survive. North American companies have altered the working hours for employees (40%) or have frozen hiring (28%). We’ve witnessed a higher proportion of workers being laid off work (15%) or continue to work with reduced pay (17%). Economically we are unwell.
People working in the retail, travel, transportation and service sectors have been hit the hardest as consumption has curtailed. Economic growth is expected to rebound next year at 5.8% as “the economy normalizes” however the sustained impact will be felt as high unemployment numbers will ultimately determine this outcome. Graduating students with soaring loans will be vying for jobs along with those 20+% of unemployed Americans. One hundred thousand small businesses in the US have permanently closed their doors in March; additionally, 4.2 million small businesses of the 30 million in the US have received emergency loans. To put this into context, as of 2017, 47% of private sector employees worked in small business, a significant portion of the US workforce. Legacy stores like JCPenney, J. Crew, and Niemann Marcus have filed for bankruptcy. While travel has stalled in the near term, it is estimated that globally, this industry has experienced losses of $820 billion already. With these crippling stats, it’s difficult to envision a return to some semblance of normalcy in a year’s time.
AirBNB has recognized the travel model will be transformed as it has come to grips with its own losses. No longer will people travel at the same frequency and in the same way as before. Beyond disrupting how an industry must redefine travel to accommodate traveller safety, the shift towards more road trips, and more local destinations may become more appealing. Vacation will be redefined. Business travelers now have remote conferencing options to effectively conduct business.
Cities Prepare for a Social Distancing Existence
Cities have begun to cordon off streets to accommodate the deluge of pedestrian traffic. And as the lock down begins to lift, we are seeing signs of new behaviors dictated by the redesign of our public spaces. In Toronto, Brookfield Place has reconfigured food courts to one-seat tables, and has limited the occupancy to each elevator.
Back to Work with No Fixed Address
Within business we have been witnessing digital transformation at an aggressive pace. Companies have been forced to react quickly to scale to meet the demands of a decentralized workforce.
Technical adoption curves that have traditionally taken months or years have accelerated up to days or weeks. As of late, OpenText, Facebook, Google, Shopify and Twitter are among a few big tech firms who are instituting longer-term or permanent remote work policies. Will cloud replace the traditional physical work address? According to Microsoft’s CEO, Satya Nadella,
“From remote teamwork and learning to sales and customer service to critical cloud infrastructure and security, we are working alongside customers every day to help them stay open for business in a world of remote everything..”
A recent Gallup survey revealed 60% of U.S. workers would prefer to work from home, post-pandemic. While this saves considerable commuting time and money, there will be economic impacts to the real-estate industry and transit industry. In addition, remote conferences have replaced business travel and while the once-previously-held presumption that face-to-face meetings achieves better results, the lock down has proven otherwise. The tech industry’s injection of this WFH (Work from home) mentality has also been the impending harbinger of dread. We save time and money, but we are also realizing the blurring lines between work and personal life, where most experience an extended workday and the ensuing stress. We also see the other side effects: the employer’s need to trust, or rather over communicate while instituting systems that provide evidence of work. So while we improve productivity, perhaps we also come to realize the grass may not always be greener.
A Workplace of Safety or Trust?
When the pandemic lifts, a flexible workday menu may include social distance policies, remote work options, split-shifts within 12 hour workday, disinfectant everywhere, disposable desk mats, stricter standards in office ventilation, reconfigured work spaces complete with sensors, wider gaps between stations and cell phone sensor apps designed to keep employees safe. The latter has considerable privacy implications but with Uber leveraging AI to track drivers’ use of face masks, and the TSA beginning to conduct temperature checks at the border, similar policies will become pervasive, at least in the near term – all in the name of public health.
Evolving into a dominant digital world means an increasing recognition for everyone to stay connected amid these new rules and policies as employers struggle to balance trust with workforce productivity. Limited access to employees immediately kickstarts the employer into a Big Brother mentality. This will make way for a new decentralized environment where output will outweigh input, where deliverables and performance will gain prominence. At the same time, companies that have been preaching they are agile will need to finally demonstrate whether they are truly ready and flexible to take on entirely new challenges and embrace new mindsets.
This mandated isolation has surfaced a trauma that has been coined “social recession”.
“We have evolved to be social creatures. For all the history of humanity, people have been in family structures,…