Every organisation of every size from freelancer to international organisation has just been faced with a change in its external context that is forcing it to change internally. This pandemic is the fastest and deepest economic shock in history.
I advise several small to medium enterprises, a couple of large ones, and sit on the board of the government – private partnership organisation.
All of them are facing dramatic changes across all the dimensions of their organisation. Their supply chains can no longer be relied on. Their sales channels have – especially where they relied on interpersonal contact or retail space – been heavily disrupted. Their workforce has been laid off, or if not has become scattered and socially distanced. Their financial systems have come under the catastrophic level of strain. Leadership is being sorely tried and tested. It all seems rather sudden and shocking.
But, already, I am seeing some extraordinarily positive responses:
- A funding organisation that is helping to expedite government support;
- an organisation that is redeploying its home-based staff (whom it is continuing to pay generously) to act as a telephone bank for the support of the sick and the elderly,
- a plastics manufacturer that has shifted to making medical supplies,
- a consumer delivery van company that has redeployed its entire fleet to delivering medicines, masks, and equipment to hospitals with a major medical equipment partner,
- business making a global pandemic dashboard free to all,
- a government department that has moved all its staff to homeworking, instituted a rather beautiful internal comms network and is continuing to support small and medium enterprises across its geographic region, and
- self-organising technologists producing an essential survival and innovation guide.
It is not all good news, of course, some are having to lay off substantial numbers of staff, some have lost really important customers, some have found landlords not willing to be flexible on rent despite government promises to support, and some have found that crowd sourced lenders who were extremely positive six weeks ago are now pulling their heads of terms and withdrawing from funding rounds. Those responses will have reputational impacts later, as Tim Martin, Richard Branson, James Dyson, and others will no doubt discover.
The impact appears to be falling worst on those sectors that relied on large numbers of people being in one place:
- leisure (hotels, restaurants, and similar pubs and café’s),
- non-essential retail-as-entertainment, and
- construction and demolition.
The construction sector is facing multiple levels of disruption in addition to those facing other business types above because ultimate tenants are in the process of dramatically reassessing their forecasts of demand and site value which is leading to some extremely difficult conversations where construction has already started. What if we no longer need shops, large malls, large cinemas, large offices in 2021?
But all of that is just business, those businesses with great leadership, agility, and the ability to innovate will – definitely – survive. They won’t be the same. Conservation is for museum curators, not business owners.
Those that don’t survive, will have learned valuable lessons about the need for resilience, contingency planning, agility, and the benefits of systems of innovation management that are in place before you need them.
It is too early to pick winners and losers, but there are some trends which indicate which way various businesses and sectors are going. There are some deeply insightful reports (I particularly like the ones from UBS, McKinsey, Goldman Sachs, and Deloitte) of the macroeconomic and general sector trends and there are some very positive indicators of what the emerging future for Western, capitalist, democracies will look like in two years’ time. Whether we passed through a steep V shaped valley of economic and social depression, or whether we bump along the bottom of a broad U-shaped valley of despair is up to us.
I think the seeds of change will sprout very rapidly now some of the big trees in the forest have fallen.
All of this has happened before, all of this will happen again
(A long time ago I wrote several articles on biological analogies for change and disruption, and I wrote another article on what virality really meant in terms of technology uptake – I had no idea quite how prophetic those would turn out to be although it is completely accidental).
How do ecosystems react to sudden trauma?
What is virality really?
- Part 1 and 2 – how marketing can help you catch a cold
- Part 3 – if you cough, will I catch it?
- Part 4 – how fast will it spread
- Part 5 – will it hurt for long, doctor?
- Part 6 – a quick diagnosis
- Hard data – A link
What will the world look like afterwards?
Some of the big trees in the forest are going to dominate in a way that many foresaw another sphere to: Amazon will effectively own the retail world now that stores have shut for a protracted period. This will accelerate the collapse of the retail sector, and lead to a massive reassessment of the value of shopping malls. Back in the early 2000’s I was having discussions with people that suggested the shopping malls would become grassed over areas with copy shops and addresses the only occupants. I don’t think that will happen, but I think we’re about to radically reassess shopping as a form of entertainment for large crowds.
The social media, and especially social media with video conferencing, has become the de facto form of human communication in the western world in just two weeks. It will be very difficult to persuade people to go back to a world of text. This will create increasing barriers for new entrants to the market and further solidify the hegemony of Facebook/WhatsApp/Zoom/Skype.
It will be interesting to see how the psychology of a population deeply scarred by the pandemic changes even during and after recovery. How will we look at football matches, summer music festivals, pop concerts, night clubs, and village fêtes? Will they simply returned, or will there be new social norms about assembling in large numbers? Life will not be the same.
Some of the big trees in the forest will fall over and die. They will no longer cast shade on the businesses around them, no longer absorb all the nutrients and finance through their extensive root system. They will rot and I suspect very few will mourn their passing as what should emerge will be much, much, more human. I look forward to the end of business run entirely for the maximisation of quarterly returns to investors. I will not cry for the loss of rapacious Private Equity with heavily leveraged schemes to squeeze the very last drop of juice out of companies and the planet. Instead, I will rejoice as we try to rebuild agile, resilient, empathic, human organisations at the right scale which return more to society as a whole and did less damage to the environment. We should not accept merely surviving, all recovering to the status quo ante – we really must strive to build a better world after this shocking and sudden disruption.
Like meteors and dinosaurs, earthquakes in San Francisco, and hurricanes in Texas, humanity is being reminded that there are forces that simply don’t care but which returned to wreak devastation on an irregular, but statistically relevant, timetable. All of us need to become a lot more mature about this and build multiple levels of resilience, agility and innovation. Those layers need to be personal, family level, business level, regional, national, and global. The cult of self and the belief that all desires can be satisfied at no cost is over.
The pandemic has arrived just in time, at a moment where we have the population, technology, and available resources to change ourselves and save the planet.