While it’s impossible to know the full effect the coronavirus will have on the global economy, the lessons large companies learn are likely to have a lasting impact on the workforce and corporations of the future.
The average tenure of a c-suite executive at a Fortune 1000 company is 3.5 to 6.9 years depending on role. On average, top leadership at large organizations were not in those roles during the last significant economic downturn of 2008-09, and even fewer were in their seat for the instability caused by 9/11. This is likely the first time many of today’s leaders have had to lead company-wide pivots on corporate strategy or make difficult decisions on workforce reduction.
The lessons these leaders learn during the current crisis will have a lasting impact on how they’ll lead going forward. Once the economy stabilizes, most leaders at large organizations will be looking to improve many areas of their business but are likely to specifically be thinking about:
- How to pivot corporate strategy quickly
- How to enable a digital workplace
- How to use a flexible workforce
Pivoting Strategy Quickly
Almost every major company in the world has gone through — and will continue going through — massive shifts in their strategy. Strategic planning processes are time consuming and labor intensive…many of those carefully laid plans were wiped out in the instant the COVID-19 pandemic took hold, leaving executives to pivot their strategies and operations to account for the new normal. With so many moving parts and so little transparency into how those strategic plans cascaded through the organization, it is very time consuming to unwind and redeploy in a new direction.
Not only is the strategic direction of many companies shifting, the world around them has shifted as well. Momentous changes put a strain on nearly every part of the business, from IT ensuring it has the technology and equipment to support a fully remote workforce to supply chains diversifying to guard against the impact of national quarantines, to automotive manufacturers being required to pivot their manufacturing operations to build ventilators.
Executives will be looking for new tech-enabled ways to pivot strategy quickly and to reprioritize their initiatives in response to dramatic macroeconomic change. The key to this is ensuring that corporate strategy exists in a system of record and that leaders have the visibility they need to understand the status and resources available to them as plans change.
Enabling a Digital Workplace
The vast majority of the global corporate workforce is now working in a remote capacity. For some, this is a very significant change to the status quo and is impacting leadership’s visibility into what their employees are doing, how they are doing it, and how aligned that work is with their strategic direction.
Leadership’s visibility into employee productivity and alignment is only part of the problem. Employees are less connected and more distracted by the news, their children, parents, roommates, or even pets. An entire workforce has new distractions and demands on their time during the workday. Tools like Slack and Zoom have improved remote workers’ ability to communicate and collaborate, but they are not enough to truly enable a digital workplace.
To help employees stay focused, it’s critical that they understand why their work is important and how it contributes to the company’s strategy. This is only possible when strategic work is digitally orchestrated to align to strategy, giving employees transparency into the strategy, the important work needed to achieve those goals, and how their own work contributes.
Many leaders are also going to realize that in many parts of their business a fully or near-fully remote workforce actually works. Companies will grow again and employees will continue to embrace the technology to support remote work. Executives will question the real estate and overhead costs associated with an onsite workforce.
When this is over, CFOs will look at the 10,000 employees who were effectively working remotely for 3 months and wonder why they spent ~$5M over that period of time for the office, desks and chairs they weren’t using. Many will see a huge opportunity to come out of a bad economy leaner and more productive.
Capitalizing on a Flexible Workforce
The ranks of the unemployed are likely to gain many thousands of talented people in the next few months.
The recent crash in the stockmarket, current economic decline and uncertainty have not only resulted in significant drops in retirement savings, but will also result in mass layoffs.
With millions of people out of a job, and millions more extending their careers to wait out the market and pad their retirement savings, many will look to restart their careers as their carefully laid plans to retire in comfort have been washed away. The result will be a flood of highly skilled and experienced people looking not just for full time employment, but independent work that will cover expenses until the market rebounds and they can re-retire.
Business leaders are likely to capitalize on this by adapting to support a more variable workforce in which they can hire flexibly when demand is high, and reduce headcount responsibly when demand is low. When the economy stabilizes, these leaders will reap the benefits of higher revenue-to-employee ratios and permanently move to a more flexible workforce.