8 ways the business world will change after COVID

A glimpse at the new normal, from regulation to radicalism.

by Rob Goffee and Gareth Jones
Last Updated: 09 Jun 2020

Making premature predictions for a post pandemic world is risky – though this hasn’t stopped social media being awash with confident pronouncements about the future.  In these early stages of fallout there is a lot we just don’t know.  What’s more, generalisations downplay the inevitable differences in what is “normal” – according to who you are, where you are and the particular business in which you work.

But are there some emerging fundamentals that might shape the new world of work?  We think perhaps there are – and we have summarised these in the 8 Rs:

Risk management

Any list of R’s should begin with risk. Identifying and managing risk became an industry after the financial crisis, when many major banks had no idea of their real liabilities. Global businesses have  systems and procedures for addressing risk. But have they been sufficient to handle a global pandemic? A review is inevitable. 

And what about smaller and medium sized businesses whose lack of preparation has been exposed?  Organisations - large and small – may need a fundamental shift in risk mind-set. Expressed in supply chain terms, for example, there will be a greater focus on “just in case” rather than “just in time”. In societal terms the issues of climate change and sustainable development may come to occupy centre stage.

Rewards

The crisis has highlighted issues of inequality and contribution. Those at the front line of vital services have made a major contribution, yet they are typically amongst the least well rewarded of workers. And many will lose their jobs in the inevitable explosion of unemployment that will follow from shutdown. 

As businesses and economies gradually recover, expect a discussion about the distribution of rewards - such as high levels of executive pay - and the extent to which the inequalities that have grown between those at the top and those at the bottom are either sustainable or justifiable. Modern capitalism is much more unequal than, say, 1950s America.

Regulation

It seems unlikely that issues around risk and reward can be satisfactorily addressed without adjusting regulation and governance. Worker-directors, for example, may be an idea whose time has finally come. Regulatory issues will form part of a broader discussion concerning the relationships between business and society. With an extraordinary 27 million UK citizens reliant on state support as of last month, how could it be otherwise?

Rationale

It has become fashionable for organisations to obsess about their “purpose”. We don’t expect this to disappear any time soon. In fact, we think the discussions will intensify and deepen. We may question not just purpose but necessity. For example, we might ask how far airport expansion or motorway development is really what we need.  And though we might all agree that a robust health and care service is essential, will it be structured the way it is now?

Relationships

The crisis has us talking about the value of relationships – in our communities, our networks, our neighbourhoods. Organisations are held together in differing combinations by both sociability (friendship, affection and helpfulness) and solidarity (acute awareness of shared interests). We have missed face to face sociability during the lockdown; but arguably societal solidarity has been strengthened by the shared virus threat. In a potentially more remote post- pandemic world – with less of a sense of imminent shared threat - how can we build resilient communities at and beyond work?

Rebuilding

Economies all over the world will require major rebuilding. If we do not do this billions of peoples’ lives will be forever damaged. But rebuilding is a long-term task – if we are lucky, a ten-year haul. And yet, our organisations, especially publicly quoted companies, are often trapped in a vicious cycle of short-termism. The injunction is – “let’s make the quarterly numbers look good”.  

In stark contrast, in the new world, organisations, managers and leaders will need to take a much longer time perspective. They will need to rethink how they really measure value and who their real stakeholders are. We will come to value people who get things done – competence over charisma.

Radicalisation

The pandemic offers the opportunity for radical change. However, it is worth recognising that, after the financial crash of 2008, many predicted that the domination of financial capitalism was over. Twelve years later, many of the same financial institutions are still in place. From a UK perspective, it is true that in the immediate post-war period we created the National Health Service, many of the elements of the welfare state and, at least, aspired to higher levels of social mobility. 

Post-COVID organisations may need to embrace radicalism in ways that seemed inconceivable even 20 years ago. Perhaps business schools have a role to play here. They have, in the main, been repositories of techniques about business – finance, strategy, marketing. In the new world they will have to embrace societal, cultural and ethical issues and put them at the centre of their curricula, not as interesting peripheral subjects for a minority.

Real leaders

We have been slightly obsessed with leaders in organisations for quite a long time. The business sections of bookshops are stuffed full with accounts of the life and times of heroic CEOs (many of whom turned out to have feet of clay). 

The pandemic has taught us that truly great organisations have leaders all over the place – of course in hospital wards, but also in horribly under-resourced care homes, in local authorities ensuring that our rubbish is collected, in supermarkets making sure that we can still feed ourselves. Maybe now we will fully understand that leadership is essentially a non-hierarchical concept.

What doesn’t change

The pandemic has given us the opportunity to rethink many aspects of our working lives. Radical change may follow. But, just as high rates of scientific and technical change have the potential to remake the world of work, they do not change the constants of human behaviour. 

Work remains a species-defining characteristic and high levels of cooperation between human beings, like the unprecedented cooperation between pharma companies produced by the pandemic, remain our best defence against peril. 

Rob Goffee is emeritus professor of organisational behaviour at London Business School. Gareth Jones is founding partner of Creative Management Associates and Visiting Professor at the IE Business School,  Madrid.

Image credit: Daniel Leal-Olivas/AFP via Getty Images

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