For our first LD7 Talk we’ve asked our Executive Partner Maria about her thoughts on how to break our addictive hold of normality.
We will discuss how much keeping DISTANCE will dominate our economic and social lives. More than ever RESILIENCE AND EFFICIENCY will be the epic determinants for a sustainable business ensuring the livelihood of people involved.
Enjoy the full read below:
Maria, the coronavirus outbreak has led to huge impacts in our economic and social lives. What are developments coming along with our attempt to deal with the pandemic but will last forever?
Humanity is currently facing a global crisis, which is impacting whole regions simultaneously. Choices made now related to data utilization, tracing and health measures for the sake of keeping a whole society alive and healthy, may change our lives for years to come. We're talking here about one choice between totalitarian surveillance and citizen empowerment and another choice between nationalist isolation and global solidarity.
We are currently going through what I call a "perfect storm" - which is an unusual combination of events that produce an unusually bad or powerful result. The consequence? Nothing will be as before and actually we are at the entrance of the next normal and definitely not going back to anything we knew before.
People will inhabit a different world, in which flexibility, speed, transparency and candid communication will be the imperatives of this next normal. Companies need to make appropriate choices regarding the technology employment for their business execution in order to respond to these new imperatives.
We humans love our habits and sometimes it needs extreme events to rethink them. In your opinion, what potential does this crisis have for sustainable positive developments?
As you know me, I am an optimist and I have a strong belief, that every change comes along with a positive outcome. Let's take social Distancing. With the internet and the possibility of rising eCommerce opportunities for the broader population, enormous potential has arisen for global trade, which has made almost everything accessible to people in neartime. Now, another demand has been added: make everything accessible online while keeping distance in delivery and other human interactions. Keeping distance will definitely dominate our economic and social lives. And again, the use of technology will facilitate this change: we'll see a shift from employing robots to cut costs and protect humans from dangerous tasks to humans being actually the danger as they can spread easily the coronavirus in their interaction. So, what if robots take away repetitive and dangerous tasks from human workers and leave the complex, emotionally loaded decisions to human beings?
Sounds like a nice dream ... but what will happen to all those lower-skill workers at the front-line, currently heavily needed but maybe not anymore in the future?
Some industries are definitely more affected than other. Nevertheless, it can be said that companies, that had already developed their own principles for sustainable business models before the current crisis can now get through it robustly. Needless to say, what we are undergoing now, is mercilessly uncovering past omissions in technology employment for business execution. To make it clear: companies who relied very much on the success of their legacy business will fail to make up for shortcomings in technology investments. The speed of innovation cycles we are seeing now, will overrun them and make them almost irrelevant in a matter of weeks what happened before corona in years.
In the past, technology employment was mainly motivated for raising efficiency and gain a productivity gain with direct margin effect. Now resilience in terms of transparency and continuous supply chains and up-skilling of the workforce are new targets for technology investments and its usage aiming at a sustainable business ensuring the livelihood of people involved.
Wow, those are really clear statements ... Access to education, maybe lifelong learning will be part of our future. Just like we had to get used to social distancing overnight. What impact do you think this will have in other parts of our life?
From one day to the other, "social distancing" became a new commandment - the order of the day. We don't know yet, what this does to us as social animals, but what we know for sure: "social distancing" is now an integral part of our daily life and this will not change anytime soon.
So, we are well advised to learn about opportunities for future human interaction in our respective cultural context. While in the past, Spanish, Swiss, French and Italian people were debating how many times they kissed each other when they met, now we are all reduced to a simple smile and a shy touch with our elbows. Much easier, right? (... kidding ...).
Again, education, in this context health education and appealing to everybody's responsibility to stay healthy and be creative in vitalizing the rules for "social distancing" is becoming of utmost importance, so that a lockdown is and remains the very last measure against a pandemic.
Our working environment will change a lot having an impact on our future activities in life, work, travel and shopping. While "Remote Work" or "Work from anywhere" were previously practiced by a few communities, such concepts are now explicitly desired even by large organizations.
It seems to be now the better option to create eligible technical facilities for home office / remote work rather than guide employees safely and controlled via modal transport into office buildings without suffering productivity too much. Micromanagement of traditionally minded managers? Career-limiting home office? Selective traffic jams provoked by intentions to access work places at the same time? Travel policies prescribing every single detail of a business trip? ... seem to be now a reminiscence of a time long past in the fear that tasks can't be completed at all.
That are some tough challenges calling for governmental intervention to preserve jobs. What are we expecting from policy makers in the future?
We are experiencing an unprecedented debate on citizen responsibility vs. public sector duty. Because there is no real playbook for much of the impact of a pandemic, we have seen different decision regime patterns regarding the stringency of measures and the need to timely inform the public.
The importance of tracing everyone's movements in a cybersmart way was quickly recognized. Nevertheless, the development of suitable apps, so that everyone could then independently assess his or her risk, was a major challenge.
Without technical facilities for the individual, the responsibility for health security of citizens was placed solely into the public sector concluding quite stringent measures as last resort.
This is a consequence of the fact that the time in which governments could have prepared for such a pandemic passed, with the result that instead of manageable budgets, huge state aids and stimulus measures for a considerable number of sectors are now being required and need to be convincing to gain the consent of a wider public of tax payers.
With the corona crisis, we are experiencing an extreme economic downturn and the first easing measures are aimed at averting further damage to the global economy in order to sustainably secure the livelihood of a broad population in addition to health safety. Do you see any chance to repair the damage?
In the sight of provided bailouts, an intense SCRUTINY will demand for the idea of “triple bottom line” - profit, people and planet.
While there is a common sense about the importance to repair the economic damage, a swift return to business as usual could be environmentally harmful, as the world saw after the 2007–08 financial crisis. While the subsequent economic slowdown sharply reduced global greenhouse-gas emissions in 2009, by 2010, emissions had reached a record high, in part because governments implemented measures to stimulate economies, with limited consideration for the environmental consequences.
Enabling a high-growth recovery and considering environmental goals is challenging. It requires assessing stimulus measures with respect to complex factors, including socioeconomic as well as climate impact, and feasibility.
Even before the corona crisis, sustainable business models were a guarantor of scraping through uncertain times with volatile market environments.
The pressure from institutional investors on companies with limited ESG focus has increased recently and will intensify through and after the corona crisis, especially because now some glaring weaknesses in business strategy and execution of well established companies and incumbents are becoming mercilessly transparent.
Along with the emerging requirement to put consumers, employees and citizens at the center of any technology employment and not let machines determine human interaction, many organizations will need to re-invent themselves, while they have preferred a myopic focus on success over economic sustainability and long-term vitality of the company.
By now everyone speaks about the new normal, but how can we rethink the status quo and rewrite existing business rules?
I personally found, that a quotation “From BC (before COVID) to AD (after DISTANCING)” by Benedict Evans on the occasion of his summer update about “Tech and the new normal” (https://www.ben-evans.com/presentations) is very much getting to the point that the future economic landscape will be much different in terms of industry structures, consumer behavior, market positions and sector attractiveness.
We are getting to a digital age, in which a huge share of the population is already connected and enjoys near-time and sometimes almost real-time services. In this interconnected world every business is being determined by technology and every organization is a software company.
Business building for this crisis and beyond means to innovate new operational capabilities almost overnight and complete a digital transformation over weeks rather than months or years. Disruptors will recognize it as an opportunity to rethink the status quo and rewrite existing rules of business execution. The transition into a digital age is not a choice among options anymore, it is the single way to stay relevant in an economic environment.
This was quite revealing and enlightening. But, one last question: Any special corona memento or new habit you wanna share with us?
No specific new habit apart from utilizing all available tools for keeping the interaction while being remote. However, I observed, that conversations are getting much more focused and hence meaningful. Personal encounters are valued much higher in times of social distancing. And, while the conferencing tools are predominantly used for formal meetings, we created in our company a new more informal format. We call it "cosy pow wow" sessions, where we share our leisure activities and have drinks and dinner together.
Thanks, Maria, for the Talk!
We love to get your feedback and suggestions about topics you’ll like to read, hear or talk about with us.