Today we are in the midst of a Great Re-Invention of society, business and ourselves.
To successfully navigate this time we need to address fragility by recognizing that safety, security and society will be the three primary drivers of the near future.
In order to address the fragility that has been revealed and underscored in recent weeks, society, business and each of us will need to sculpt ourselves into more resilient forms.
A health crisis where every single person is at risk, with impoverished people at much greater risk, combined with an economic crisis that will leave over a quarter of the US population unemployed is going to change the mindset of the United States in three ways.
1.Government matters. Governance matters: As he set off what would be four decades of deregulation, former President Ronald Reagan said to great laughter :
“The most terrifying words in the English language are: I’m from the government and I’m here to help.“
Who is laughing now?
During this crisis we have seen the need for Government and importantly the difference in good versus bad governance at national, state and local levels.
Government matters. Governance matters.
It is a life and death thing.
2.Expanded Healthcare: Regardless of who gets elected in 2020 we can expect to see significant expansion of health care benefits particularly to blue collar service and gig workers.
We are likely to finally understand that in a world that will require more mobility and flexibility we have to decouple affordable and comprehensive health care from being employed. This is good for business and good for society.
3. Optimizing for society not just consumer and business: Over the past few decades whether it be the government or judicial system there has been a tendency to favor decisions which benefit consumers or business.
Consumer and business will remain key drivers of economic growth, but we will now see the importance of society stakeholders like community, environment and employees.
Make America Well Again may replace Make America Great Again.
Many businesses particularly smaller ones, may never recover from the shock of having to shut down for two to three months. Even, large established firms are going hat in hand for bailouts or imposing a combination of pay cuts, furloughs and mass layoff of employees to cut costs and drawing down every credit line they can to buy liquidity and time.
After going through such a near death and chastening experience business will re-invent the way they work in order to build in resilience in the following ways:
1.Re-architect to a smaller and/or different footprint: Bob Iger of Disney believes it will be very different in the future including have many fewer employees.
Companies will not bring back all the full time employees they have furloughed even if they can afford it because they will want to create a financial buffer for the future.
Anticipate a greater use of contract versus full time employees to allow one to flex staffing to changing circumstances.
Companies will also radically re-think all their real-estate needs and slash their travel budgets recognizing that not only many meetings can be done remotely but most business travel is not an efficient use of time.
Most importantly, companies will re-think their business models or be forced to do so because this great pause will lead to a great acceleration of change with any nay-sayers either seeing the light or the first to be let go.
2. Re-think supply chains: For the past decade off shoring and just in time supply chains have driven great speed and financial returns. The recent crisis has shown that the most efficient chain is the not the most resilient one and companies will now balance efficiency with resilience. They will carry more inventory and ensure multiple supply chains.
3. Hybrid versus Pure-breed: There is really “no digital “only or direct to consumer only. Majority of businesses will be a mix of analog and digital, direct to consumer and retail channel firms, full time and contractor businesses. For resilience you need optionality. To thrive one needs diversity of models.
4. Strong Balance Sheets will be cool again: With major well run Unicorns like AirBnb forced to borrow money at double digit rates of interest signal imply that lesser Unicorns dreams will pop. We will speak of “Pop”corns and not just Unicorns. The Soft Bank Vision fund will be revealed to be the Soft Bank Delusion Fund.
5. A New Set of Companies and Wealth Creation Opportunities will arise: In the debris of the Great Recession companies like Airbnb and Uber were forged as was Square, and technologies such as Blockchain and much more. One will see new companies being founded that are built using the current technologies and changed expectations of people.
Over a four decade career I have seen a lot of changes and adapted to a lot of changes. Some of my distilled advice as 10 Career Lessons remains my most popular blog post and remains even more relevant today.
Like never before I believe every individual must recognize that a part of the Great Re-invention it is imperative to spend time rethinking their own careers. Let’s utilize this down time to begin to up skill in ways that will allow for resilience in times where there will be fewer and different full time jobs.
1.Upgrade Your Mental Operating System: Spend at least a few hours a day learning new skills when you have the time and there is a world of free resources and training. And when the world returns never stop learning. Whatever you are good at will likely erode in market value unless your replenish yourself.
One of the keys is to also ensure that you become “virtual certified” and can work in a world of distributed work forces. We will get back to offices but less than before both in numbers and the time we spend there. Here is how to ensure that you are seen as capable, trustworthy, empathetic, vulnerable and inspiring will be so key to your career.
2. Build a Brand: In a world where full time jobs are going to be fewer at least for a while you need to make sure that you have developed networks and a brand so that you retain optionality.
A recession is not just a time where smart brands who continue to market gain market share but it is where you can stand out. This is not the time to go into hiding or expect that when you return things will be the same.
3. Face the reality that you are likely to have little pricing power and may need to cut your own costs : When the economy opens up most businesses will find limited demand from customers combined with millions of people looking for work. This will be true at least for a year or two if not more. Those temporary pay cuts may not be temporary and the big bonuses of the past may remain memories as companies husband resources and face cost conscious customers.
You must find ways to cut your cost base wherever you can so that may build your reserves . This will also allow you to afford your next career which may have you start at lower level in growth industry, join one of the new next-generation start ups which will pay you a lower base but lots of options or finally follow the career you wanted but did not do because it did not pay big bucks.
No longer should you price yourself out of your dreams because of your cost structure. Could it be that you should be doing something else? Could Plan B or “one day I will” be really Plan A?
4. Change sucks but irrelevance is worse: While today is traumatic in both human and financial and career loss and the path forward will be uncertain and sometimes difficult we are likely to come out as a better people and society.
Every day you see this with the way people are stepping up and helping their neighbors and finding new ways and approaches to cope.
Humans adapt. Humans invent.
Humans are resilient.
And you are human.
Rishad Tobaccowala is the author of the bestselling “Restoring the Soul of Business: Staying Human in the Age of Data” published by Harper Collins globally in January 2020. It has been described as an “operating manual” for managing people, teams and careers in the age we live in.