The coronavirus crisis is a world-changing event. Here are five themes business leaders need to consider as they plan for the next normal.
1. Remote working
Business has adjusted to the realities of social distancing very rapidly. For most managers, productivity is at best similar to what it was before – less time spent commuting is a net gain, a few more interruptions from family at home potentially a net loss.
The implications for the future of work are significant. The need for corporate office space may become less acute with a small central office space to be used only when needed for important situations with other work happening from home.
2. Online transacting
Online transacting with suppliers (i.e. not via an intermediary) were clear trends before the crisis, however their uptake varied by customer groups. The crisis forces everyone to transact online and, in many cases directly with suppliers of services vs. intermediaries. This is pushing forward an unprecedented scale of “digital uptake” across a range of industries, including insurance and banking, investment management, cross-category retailing, and food grocery.
3. The rise of “cocooning”
The social distancing and isolation requirements of Coronavirus have led to enforced consumer “cocooning” – a significant increase in time at home, a reduction of / journeys of any kind, a re-rooting of consumers to their local community and physical environment, and finally, an understanding that many basic needs for goods and even services can be met online. These changes will have major implications for many industries such as hospitality, entertainment, sports and leisure and travel to name a few.
4. A move to a local supply chain
Supply chains have failed as a result of the Coronavirus bringing into focus the risks of over-relying on global supply chains in manufacturing everything from cars to pharmaceutical products to PPE in the search for efficiency. This crisis will bring a re-consideration of the “efficiency” vs. “control and predictability” equation – with many businesses looking to bring supply chains closer to home despite the loss of lower-cost international suppliers.
5. More government intervention in the economy
During times of a crisis, citizens have proved willing to accept greater government control of the economy. Already, there has been economic intervention on a scale that hasn’t been seen for decades, if at all with most spending directed to three areas—supporting citizens’ basic needs, preserving jobs, and helping businesses to survive another day.
The tremendous costs of being the lender and insurer of last resort may prompt the government to take a much more active role in ensuring resiliency. The implications for the role of the state will affect the way business is conducted; business leaders in many more sectors will have to adjust to the next normal of greater government intervention.
"The implications for the role of the state will affect the way business is conducted"