In 2008/2009 we lived through the Great Recession.
One way to frame the impact of the Covid-19 tragedy is to think about it as the start of the Great Re-invention.
Of Business, Of Government, Of Society.
And of our ourselves.
I believe the impact of this crisis will be greater than the ones I have lived through including the the dot.com bust, 9/11 and the Great Recession because it is a human, economic and social shock happening to everybody in the world, at the same time, for an extended period ( 8 to 12 weeks or more).
Peoples habits change if they repeat or stop a behavior for 60 or more days.
People’s mindsets change when they go through a severe shock.
Peoples relationships change when they get the opportunity to see, feel and think in new ways.
All this is happening to all of us.
Over the past few weeks I have read, researched and thought about the implications of our current tragedy in the future and will be publishing them here on this blog.
Predicting has always been a risky business and all futurists need to be humble since the tomorrow will prove them often wrong. This is particularly true today given the unprecedented circumstances. So in order to ground my observations I am beginning with what I believe is a key to understand and frame the way forward.
The first thing we all need to do is to address the reality of Fragility.
Human Fragility: If there was ever a doubt about the frailty of our bodies and minds and the reality that we all are carbon based feeling filled creatures with limited life spans and parts that go wrong, Covid-19 has brought us clarity. Never have so many people been so anxious, fearful and uncertain for their futures. Even the well to do who are working from home with financial reserves are stressed. As I remind people we are not working from home. We are working under duress in homes filled with children who should be at school, worried about parents and loved ones and our jobs, while being scared out of our wits via our television and social feeds and dealing with toilet paper shortages and the grocery trip as a hazardous life risking endeavor!
Economic Fragility: Tens of millions of businesses and hundreds of millions of people all over the world have less than two or three weeks of reserves after a decade of a booming economy. Huge corporations including airlines spent all their reserves buying back their stock and would go out of business without government help . The CEO’s who believed in free enterprise and told government to back off are going hat in hand and pleading for help.
Social Fragility: In the US about 16% of the population are immigrants but over 25% of the people who are working on the front lines whether it be delivery, warehouses, drivers or nurses are immigrants. In Chicago as I write this African-Americans are dying at a7X rate to the general population. The harsh downturn is impacting labor particularly gig workers, poor people and young people. The walls we put up thinking that we could live compartmentalized lives are eroding as it is becoming clear that we are all connected. Boris Johnson the Prime Minister of the UK is in intensive care as I write this
The Great Re-invention: Think Different. Feel Different. See Different.
As businesses and a society we need to think, see and feel differently to ensure that we work to re-invent our world in the light of the learnings of our fragility. This is likely to mean that successful businesses and leaders will acknowledge the following in all their behaviors, product development and messaging : Society, Safety and Security:
Society: We live in a society where we are all connected as people. We have to ensure we are optimizing for society and not just for consumers or businesses.
America is different from Europe with a rugged individualistic streak that is part of the national character but today when we see CEO’s who were capitalistic in boom times turn socialist when they run into trouble ( or as Professor Scott Galloway says they want to individualize the gains in good times for themselves but socialize the losses for everybody when things go wrong) or politicians who claimed had no money to address infrastructure or social issues but now have unlimited money will give people pause on nonsensical ideologies.
The days of pooh poohing government or causes that focus on common good are likely to pass. I anticipate a new found appreciation of blue collar workers and people on the front lines and would not be surprised to see increased unionization particularly among gig and warehouse workers.
Safety: This crisis has shown the most important asset is our health. It has placed a new spotlight on the importance of safety and the people who keep us safe.
Funding for some form of Universal Healthcare will become essential and new found appreciation for medical staff, first responders will remain long lasting. Too many people are too vulnerable and there will be a hunger to keep oneself and one’s family safe.
And Climate Change will be taken seriously for the first time by many deniers.
For a few months and maybe longer messaging will need to emphasize safety. Why is this conference safe. Why is this theater safe. How does our company keep you safe.
Security: A joint survey by the Financial Times and the Peter G Petersen Foundation released this morning indicated “how widespread the pandemic’s economic impact has become, with almost as many families making more than $100,000 a year reported a hit to their income (71 per cent), as those making less than $50,000 (74 per cent). Similarly, 53 per cent of those making less than $50,000 said they would lose their pay if illness forced them to stop work, while 47 per cent of those making more than $100,000 were in the same boat.”
People all over the world at all income groups will feel far more financially insecure after Covid-19 than before it. The Millennials burdened with student debt and facing a constrained market for employment will feel particularly vulnerable and older retirees are facing lower retirement balances, zero to negative interest rates on savings and the possibility of higher inflation as 6 trillion dollars in the US flows through the system.
As businesses restart up they will have limited to no pricing power since their customers will watch their spending and will be needed to be incentivized to re-start behaviors they may have given up.
Society. Safety. Security.
In conclusion a key to driving the Great Re-invention will be to focus on society and how you are serving society while helping peoples ( customers, employees, stakeholders) need for the safety of their and their families health and the need for financial security.
Rishad Tobaccowala is the author of Restoring the Soul of Business: Staying Human in the Age of Data which has been published globally by Harper Collins.