May 25, 2020
Covid-19 is accelerating the disruption of jobs, work and pay that we described in our book ‘Flex or Fail’. The pandemic has already affected the world of work, with over 26 million Americans accessing unemployment benefits since March. However, we believe that the real impact on jobs will really be seen in the third and fourth quarters of 2020 when companies start to make longer-term adjustments to their cost structure in order to conserve cash and remain in business.
Massive government programmes have been implemented across developed world economies to support businesses and laid-off workers through a variety of loans and grant schemes. However, rising unemployment is a predictor for a dramatic increase in business failures in the latter half of 2020 and 2021, as the pandemic continues to impact economic activity.
What effect will this have on jobs and work? We can already see that lower wage and part time workers have borne the brunt of short term lay-offs, and this is likely to continue. Sectors such as retail, leisure and hospitality have been affected particularly badly in the short term, with doubts that all these businesses will return to their previous levels of capacity as customers switch permanently to new channels and consumer behaviours.
Business leaders will reflect on how their operations have performed during their exposure to ‘lock down’ and start to ask questions. Why have an office? Why do I need all these employees? Which employees are doing particularly well and which are non-performing? What decisions do I need to take to stay in business? The realisation that ‘only strong companies will succeed’ is forcing business leaders to think the unthinkable about every aspect of their business.
In our book ‘Flex of Fail’, we forecasted that automation and AI would be transformative in changing the nature of work. Not just by replacing ‘humans for machines’ but more so around changing the nature of how people work alongside new technologies and the changing nature of the tasks they perform.
Although this has up till now mainly been focussed around manufacturing or repetitive administrative tasks, emerging technologies (eg low code) will affect all areas of work including professional services.
The timeframe for businesses to invest and deploy automation has jumped from years to weeks since the pandemic started. Zoom meetings, online doctor consults and ‘click and collect’ have gone from fringe to mainstream. Businesses have done the unthinkable in terms of problem solving, agility, collaboration, embracing technology, focused goals, breaking rules and recognising what highly motivated people can achieve when put to the test.
For companies, re-imagining their future has become critical in order to build resilience. We see transformational leadership and vision being the difference between success and failure; these leaders are likely to excel in the following seven ways:
– Developing a deep understanding about their customers changing needs
– Mastery of being able to create and communicate a compelling vision
– Setting clear goals in both the short and medium-term
– Giving license to their teams ‘do things differently’
– Embracing technology and innovation, at speed
– Forging new collaborations to achieve objectives
– Using structured data as the ‘compass’ to evaluate progress
For all individuals this will be a time of risk and uncertainty. In our book we outlined three key steps for people who may have anxieties about their jobs, income and futures; we suggest that this is now an urgent task:
- Planning for new ways of working
Managing risk for individuals starts with evaluating options for transition and planning. Diversification of income streams and work activities is an important component of planning in order to reduce risk. Relying on a salary from a single company is risky. Establishing a portfolio of income generating activities includes monetising assets, as well as work related activities, which would need to be included as part of a comprehensive approach.
- Skills development
We outlined in our book the importance of adopting a ‘growth mindset’ and belief that abilities can be developed. Identifying what skills will be needed beyond the horizon will enable individuals to take a more entrepreneurial approach to achieving their personal objectives
Both virtual and physical communities are critical for social connections and as a means of both social support and networking. Identifying and planning how networks and communities can be utilised is key for individuals to develop their own ‘brand’ and stimulate a flow of potentially valuable ideas and opportunities
No one knows exactly when and how the Covid-19 pandemic will end. It is likely that a vaccine will be available in 2021 but uncertainty remains around timing and its effectiveness. The age of ‘hyper-uncertainty’ will be with us for some time yet.
Businesses and individuals need to adapt to this ‘new normal’. In spite of the tragedy and misery for many people that Covid-19 has brought, this event will open up new opportunities and it will have an end. For those leaders and individuals with a vision, who are both agile and fortunate, they may see this time as a pivot point in their lives.
Please contact us at email@example.com if you wish to be amongst a core group of innovative companies that are pioneers in the Flex Movement.
Dr Tony Felton, Robby Mol, Professor Arturo Bris – May 2020
RTA Consulting would be happy to provide consultancy support for your organisation on these topics, speak at your events or engage with you to expand the conversation.