The world will fundamentally change in the next decade
Whether you are listening to McKinsey, the IMF or the Economist, all modern-day prophets of doom agree that COVID-19 is having a devastating impact on our society and the economy. This impact will be felt long after this pandemic has passed.
Although I am not an incarnation of Alvin Toffler, the famous futurist and author of ‘Megatrends’, merely by observing the news and talking to clients and colleagues, I see a couple of clear trends and tipping points, which lead me to believe that the ‘new normal’ will look different than the ‘old normal’.
- An increased sense of vulnerability – Especially in Western Europe and North-America, people will feel more vulnerable. SARS and Ebola happened in different continents, but COVID-19 is happening in their cities, streets, or even homes. In countries where the governments do not seem to have a firm grip on dealing with the consequences of COVID-19, trust in governments and other public institutions will significantly decrease.
- Consumers will become more prudent – The spending pattern of consumers in the Western world will change. Having the memory of the Financial crisis still fresh in their minds, they are now witnessing another crisis (‘A black swan’) with far-reaching economic consequences for their financial situation. It is highly likely that, as a result of this, they will become more prudent in the way they spend their money.
- Virtual reality is the new reality – More than before, the internet will make geography less relevant. Two quick examples to illustrate this point: first of all, the business travel industry will shrink. Not only do we currently have more business conversations virtually; the type of topics we discuss also changes. The custom practice of having relationship-related discussions face to face, and transactional discussions over the phone or platforms like Skype and Zoom, has gone. Relationships are currently being built, maintained and developed in a virtual way.
The second example concerns the world of academia. If students need to virtually attend lectures at their local university on a walking distance, why could they not, for instance, attend lectures at Harvard or Yale on another continent? Working groups could continue to take place in virtual break-out rooms. Exams could be taken in one of the many Pearson VUE testing locations across the globe, for instance.
- Humanity is the new norm – Humanity becomes part of the new normal. On average I have been on Zoom or Skype 5-6 times a day with colleagues and clients in the past couple of weeks. During that time I have seen a CEO in a tracksuit, a client in pajamas, loved ones bringing tea or coffee to the people I talked to, young children screaming in the background in the home office of their parents, and other stuff you would normally not see in a clinical office setting. Does this ‘unprofessional’ setting have a negative effect? No, it does not! On the contrary, it creates a sense of connection on a more human level, and a desire to do meaningful things together.
- Supply chains designs will be reviewed – In the past decades, all businesses opted for ‘lean’ supply chains with JIT inventory management. Buffers were deemed to be considered the work of the devil, and using multiple suppliers for the same category old-fashioned. Looking at how many companies are struggling with their supply chains at the moment, makes you wonder how future-proof these concepts were or will be in the future…
What will customer demand look like post COVID-19?
However massive and cruel COVID-19 is, it is not the only crisis mankind has faced. A short and incomplete list of major crises that affected the lives of millions of people in the 20th century include Yellow Fever and HIV, World War I and World War II, as well as the great depression in the 1930s, the 1973 oil crisis, the 1997 Asian financial crisis and the Credit crunch crisis in 2007-2008.
If there is anything we can learn from these crises, it is two things:
- Every crisis will eventually pass. Fortunately, there are already signs that the Chinese economy is slowly improving, and that the curve of COVID-19 cases in Asia has started to flatten.
- More often than not, crises have a lasting impact on our society. The 1973 oil crisis, for instance, changed the face of the US car industry forever and created massive opportunities for Japanese car manufacturers.
This means that, just like in any crisis, businesses should do three things to meet their responsibilities concerning their stakeholders:
- Ensure the survival of their company in the short term
- ‘Do the right thing’ for the society in which it operates. If not out of idealism, then at least from a well-understood self-interest
- Address the key question: what do we need to do in order to stay relevant in a post COVID-19 world?
In addressing the third question, businesses need to think first and foremost about their customers: what will their world look like post COVID-19?
Based on this understanding, businesses will be able to judge whether it is realistic to expect a quick rebound, a slow recovery, or whether the future demand of customers for their products and services will be structurally lower, or even completely disappear. This understanding will help businesses to react in an informed and measured way.
Three questions we need to ask ourselves
Not only businesses will have to ask themselves the question if and how they can stay relevant in a post COVID-19 world; we as individuals need to do so as well. A large number of people have already lost their job, and the outlook is grim. The ILO for instance expects up to 25M job losses due to COVID-19, and some US economists are even more pessimistic.
This means that we need to ask ourselves two questions to determine our position in the post COVID-19 labor market:
- How well is the company I work for positioned in the post COVID-19 world?
- What will the likely demand be for someone with my competences in a post COVID-19 world?
If the answer to one, or both, of these first two questions, is a negative one or a question mark, it is time to move to the third one:
- Which actions should I take?
The graph below shows the different options we can follow:
- Upskilling – Improving the level at which we master our competences
- Reskilling – Acquiring a new set of core competences
- Networking – Expanding our network in order to enable us to move to a different company
If you do not know what you should do yet, no problem, you are in good company. In this video, Simon Sinek says that he does not know yet how to ‘put himself out there’ without a stage. However, he also says that he does not worry about what he does, but why he does it, and that he will find a job that will help him do that. Something I wish for every reader of this post!
Photo credits: DutchAperture