The Big Reset: Making Sense Of The Coronavirus Crisis
How fast life can change. One day, it feels normal. The next day we’re “sheltering in place” in our homes…distancing ourselves from neighbors when we go for a walk.
It’s a paradoxical time. In the middle of fear, economic crisis, and social distancing there is a growing sense of closeness. The virus doesn’t discriminate, it can get any one of us: our parents, our children, our neighbors, our friends. And this brings us all together.
And the paradox is happening in business. I’ve talked with dozens of leaders this week, and they’re all in crisis mode. But as they deal with their own individual workplace crisis, they’re also becoming closer to their people. As I discussed last week (People First, Economics Second), the only way to survive this virus is to make sure your employees are safe. And every executive understands: they could catch the virus too.
We’re still in the middle of this crisis, so the future isn’t fully clear. Will this go on for a few months, or are we going to have health and economic disruption for years?
Well regardless of how soon this is over, it’s clear to me we are in the middle of The Big Reset, a new way of thinking about work, life, business, and leadership, Let me explain.
How We Got Here
First, I think it’s important to put this situation in some context.
We just finished one of the biggest growth decades in history. Following the 2008 crisis, we experience 11 years of GDP growth and spent a decade talking about digital transformation, skills and jobs of the future, and how to thrive in a world of low unemployment. The stock market and job market exploded, CEOs got rich, and companies generated so much stock they returned it to shareholders.
As this hypergrowth went on, however, problems started to grow. Income inequality got worse; commute times got longer; people started to show signs of stress. Global productivity lagged the GDP for a decade and problems like anxiety, depression, and suicide have been on the rise. And perhaps the perhaps the scariest indicator of social malaise is the fertility rate: families in developed countries are not having enough children to replace us.
In my travels, I saw dramatic economic growth in India and China, explosive business momentum in the Middle East, and increased economic growth in Eastern Europe. I was hoping to go to Africa this year. Every leader I met with wanted to talk about the future of work, reskilling their people, and how to make employee’s lives better in this time of continuing growth.
In the market for HR technology, this has been the most expansive period in my career. More than 4,000 new HR tech companies were formed; venture capital was plentiful; and many new ideas were incubated. The promise of AI created a sense of wonder and reinvention, and lots of non-HR people jumped into the market.
All this is about to change. I call this The Big Reset.
A reset of our expectations. Reset in our priorities. And a Reset in how we spend our time.
Let me try to explain.
#1. Reset Work: Make the digital workplace thrive.
The first big Reset is that we’re going to make digital, remote work thrive… and we’re going to do it in a human way.
Over the last decade, we’ve all been through digital transformations – but somehow they didn’t make work life better. We struggle to commute into the office, then spend the day wrestling with emails, meetings, conference calls, and projects. We were never sure when to stop, so our productivity, health, and wellbeing has suffered.
Well now we’re going to make digital work thrive: we have no choice. New tools, rules, and norms will be established, and these will be with us for decades.
In my family’s week of sheltering in place, my wife had virtual workouts with her trainer, a digital piano lesson, a virtual yoga class (taught by my daughter), and two digital “tea parties.” I had dozens of video calls with clients and we conducted a two-day workshop with a global client which included people from 7 countries, with breakout sessions and strategy discussions. It was a tremendous success.
Working at home is pushing us to the edge. We’re arriving at the “end state” of digital transformation: making individual jobs and roles meaningful, productive, and enjoyable online. And we’re all learning it fast.
As I’ve traveled around and met with companies, I’ve always felt we were nipping around the edges of remote work. Companies ripped out offices, built co-working spaces, bought OKR tools, and set up whiteboards. And then they celebrate “We’re Agile!” and assume the transformation is complete. Well, it hasn’t really been true.
As we now understand well, remote work is more than getting a license to Zoom or setting up an open workspace. We need to build a set of rules, practices, and cultural norms that let people work remotely. When people are interrupted at home can they skip a meeting? When are cameras on and when are they off? What should people wear?
By the way the market for “work at home (WAH)” is huge. In 1997 the Bureau of Labor Statistics believed 37 million jobs were WAH-capable. Today that number is almost twice as high, estimated at over 50 million. While many workers (restaurants, manufacturing, healthcare, logistics) will never WAH, the growth rate is still enormous. And we have yet to see the huge impact this could have on the commercial real estate market.
The tools are getting better every day: now let’s make the future of work thrive. Rather than just throwing tools at employees, let’s make remote work positive, productive, and satisfying for every employee. And let’s bring people together in the process.
Upwards of 50 million Americans could possibly work at home.
(This week we are launching The Remote Work Bootcamp to help you with this Reset.)
#2. Reset budgets: Simplify, do less with less, make work easier.
The second Reset is also clear: the economy is taking a nosedive. Your budget is going to get cut. And this may mean a smaller team, but it definitely means redefining what you do.
This raises a lot of important issues. The first is that layoffs, while they may be necessary for survival, can be deadly. Read this article in HBR if you don’t believe me. The “survivors” of a layoff lose 20% of their productivity, but I won’t belabor that topic right now. (The Brookings Institute estimates that 24 million jobs are highly susceptible to loss, roughly 16% of the US workforce. A big number.)
One of our clients in Aerospace, which has been through layoffs during many cycles, shared that “30% of employees laid off would never come back to work for your company again.” Think about that.
The second and much bigger issue is simplification. We now have an opportunity to clean up our mess. Let me explain.
During the last ten years of growth, we created bureaucracy, complexity, and lots of overhead. Every time you hire a new manager, launch a new product, or grow into a new geography you layer on more “stuff.” Nobody ever takes anything away.
In my research on employee experience, I found companies with 52 steps to order a credit card, $24 million a year wasted on talent reviews, and dozens of leaders telling me “It’s just too hard to get things done.”
We now have the right (and mandate) to fix this. I like to call it “doing better with less.”
And this doesn’t mean just cutting headcount. It means carefully applying the Marie Kondo principle of business. Say “goodbye, and thank you” to every process, committee, meeting, conference call, and email you don’t need. And you can be ruthless.
I have written a lot about the Process Shredder, a cool application Pepsi developed with Waggl that lets any team crowdsource processes to be obliterated. You should launch a process shredder in every department.
One of the most famous tech companies in Silicon Valley (a hyper-growth brand) told me their growth has created “barnacles.” Lots and lots of systems that you can’t remove, that “slow the ship down.” I thought that analogy was perfect.
A big pharmaceutical company I just talked with told me their people complain of a lack of “collaboration.” But when we dug in and explored we found that the real problem was bureaucracy. There were so many committees that people just stopped showing up. Now you have an excuse to clean this up.
Start your redesign from scratch. Use design thinking for everything you do. And don’t add new programs unless you throw something else away.
#3. Reset leadership: A new focus on empathy and understanding.
The third Reset is a radical shift in management culture. A shift toward empathy, compassion, and understanding.
I think Jack Welch’s recent death was poignant. the leadership principles he pioneered in the 1970s and 1980s have now died too. Remember forced ranking, cascading goals, and competitive evaluation? These principles of management have drifted away, now replaced with listening, empowerment, growth mindset, and a strong dose of curiosity.
High performing leaders of today are different. They’re empathetic, they think about people and society, and they really listen. There will always be financially-driven executives, but they’re getting pummeled and wont be effective today. (Boeing and Wells Fargo are prime examples.)
Why? This crisis is teaching us an important human lesson. It’s a health and safety crisis first, and economic and business problem second. It’s as if we’re running a company that just had a massive explosion that blew up half of our facilities. We can’t just talk about fixing it buildings, we have to talk about making people safe first.
Did you know that companies like Chevron and Exxon put safety as their top goal? They do this because they understand that their business will not function if people don’t feel safe (plus, of course, the economic cost of accidents is enormous).
Companies like Amazon, Wal-Mart, Kaiser Permanente, Starbucks, Southwest Airlines – they’re under huge amounts of stress. Some are hiring; others are furloughing. But the biggest issue they face is fear in the faces of their employees. I love that Workday is giving people extra pay and tools to help mothers teach their children at home. Every company can think this way.
Right now the CEO is the Chief Empathy Officer. If your CEO doesn’t think “people first” your company is going to have a tough time responding to this crisis. I just listened to Bill McDermott’s comments on CNBC, he gets it. Many of you have CEOs who “get it.”
I call this “people first, economics second.” You’re going to see some amazing leadership stories in the next few weeks, and mark my words, some of them will bring tears to your eyes. Empathy is in. Listening is in. Pushing people; creating competition; forcing growth – it’s out.
#4. Reset Trust: take it seriously and learn to live by it.
This is a big topic. The last decade has created an eroding sense of trust. Edelman’s research shows we don’t trust politics, we don’t trust the media, and we barely trust capitalism (56% of people think capitalism does not solve the world’s problem).
Our companies are the “most trusted institutions” in people’s lives. So we have to live up to this trust. Right this minute.
Trust is a complicated thing, but I’d suggest it is made of three fundamental things: ethics, competence, and voice
Three simple words. But three very complex ideas.
Ethics: Tell the truth. Give people the good and bad news. Make decisions that feel good for everyone. Take care of people, customers, society, and the environment. Don’t lie.
Competence: Do not accept mediocrity. Fix every problem as it comes up. Learn to be “great” at what you do. Hold yourself accountable for excellence. Give people a sense that “this company really cares.”
Voice: Listen to everyone. Pour money into your employee listening strategy. Create teams that search for stories. Share what you learn. And take action on every single piece of advice.
These three things make up the complex nature of trust. In this reset, we enter a new world of trust-centric business. Let’s hope this reset sticks with us.
#5. Reset HR. Come together and operate as the heroes we need to be.
The fifth reset is the rise and reinvention of HR. We really are the heroes now. Just as the nurses are the front-line healers in the hospital, we are the front-line healers in the company. We need to come together, get aligned and excited, and reprioritize your time.
The long-term programs (reskilling, employee experience, HCM platforms, etc.) have not gone away. In fact, they are more important than ever. But right now, you have to reprioritize these programs, make them simpler and more relevant, and make sure you use them to help people immediately.
Almost every HR department I have talk is in the process of transforming. Now is the time to “get on with it – and fast.” We have to shed our administrative history; automate ourselves faster; reskill our own internal teams; and reorganize ourselves into an agile set of experts.
I’m completing a new operating model for HR, and I’ll show it to anyone interested – but the big reset is that now HR really “is the business.” We no longer “serve the business” or “sit at the table.” We are central and critical to the company’s survival, response, and long-term success.
This Reset Is A Good thing.
The Big Reset came as a surprise, but in the long run it’s a good thing. We were feeling fraying of the edges of our companies, and now we have to act. It’s time to make work easier, bring people together in a digital way, and refocus our priorities on trust, compassion, and action. I know we are up to the task.
What We Are Doing
Let me conclude this on a positive note. Our team is working hard too, and we have some things to help.
- On March 31 at 11AM PST we have a webinar discussing the crisis: we’ll have five of the world’s leading CHROs tell you what they’re doing, and we’ll do Q&A as long as you’d like.
- This week we’re launching The Remote Work Bootcamp, a program we built just for the situation you’re in. Josh Bersin Academy members will get it at no charge (as will NGOs and health care providers), others can join for $5.
We Are Here To Help
Our entire team is working almost 24 hours a day to respond. If you want to talk, share ideas, or ask for advice – please contact us. We’ll jump on a Zoom call and help you think things through.
As always, I welcome your thoughts and feedback. I hope you’re all safe and I hope to talk with you soon.