It’s August: Four Lessons From The Pandemic
It’s August, we’ve been dealing with the pandemic for almost six months, and a few things are becoming very clear. Let me share four lessons you may not have considered. And this week I put this into a podcast, which I hope you enjoy.
1. Tech has been the savior of this crisis.
In fact, it’s so important that the Nasdaq hit a new high this week and the price to earnings ratio is now 36! This is nearly twice ten year average of around 20. Not only is tech on fire, but big tech is exploding. Right now the top 5 tech companies make up 28% of the entire S&P 500 index. This is bigger than healthcare and consumer discretionary combined! No wonder Congress wants to investigate monopoly power.
What does it mean to us? It means our tech is working well. Our Zoom calls, emails, Microsoft Teams meetings, and VR and online training programs are working exceedingly well. Forget the old “digital transformation” stuff – we’re all transformed overnight. That’s not to say there isn’t a lot more work to do – as I discuss in the podcast, Healthcare Providers and Manufacturers are still way behind in digitizing their work – but they’re learning fast. Last week I talked with 20 healthcare CHROs and the #1 issue on their mind was driving a cultural transformation around digital work.
2. Health and Wellbeing have become the center of the work experience.
I don’t need to belabor this topic, but every company now understands that if people don’t feel safe (that means customers and employees and channel partners), their business is dead. So we’re all spending an enormous amount of time focused on resilience, safety, hygeine, new workplace design, and business practices that create “low-touch” products and services.
Retailers (Sainsbury’s just detailed this in The Big Reset report coming out soon) are accelerating home delivery, touchless retail shopping, and new in-store experiences that are safe. I am on vacation this week in Lake Tahoe and the 7-11 near me looks like a world-class demonstration center for plexiglass and electronic commerce. I can walk in, buy a soda, pay (ApplePay), and walk out without ever getting near anyone.
And this is a long-lasting change. As I discuss in the podcast, health innovations have transformed our lives for hundreds of years. When we got rid of open sewers and started using indoor plumbing our health dramatically improved. Antibiotics changed our lives by eliminating the scourge of infection. We are now getting serious about public health safety and Pandemics, and I think we will take this with us.
I think it’s a little entertaining that Clorox is now out of stock on all cleaning supplies (they’re headquartered in my neighborhood) and United Airlines partnered with Clorox and The Cleveland Clinic to make flying safer. As a very loyal United customer, I’m praying this isn’t a publicity stunt because one of these days I’m going to have to get back on an airplane.
I also want to point out something else. The latest Deloitte Millennial Survey points out that Gen Z and Millennials are more comfortable talking about mental health than ever before. A new study just found that almost 83% of Americans suffer from loneliness, anxiety, or depression right now – and people are willing to talk about it and take action. This is a massive transformation in our work lives. Personally I remember decades of my career when my anxiety, fears, and imposter syndrome was my own problem. Now we can talk about this stuff.
Employers can do something about this. 87% of employees in a recent UK study said employer investments in wellbeing would increase their loyalty.
The next chapter is the integration of diversity and inclusion, citizenship, social responsibility, and ethics with wellbeing. They’re all related.
3. We operate in a cadence and we need time to reflect and regenerate.
The third big thing we’ve learned in this crisis is that we cannot operate on “high alert” forever. Human beings, businesses, and societies run in cycles. We need time to grow, innovate, and perform – and then we need time to rest, recover, and reflect. The month of August is a regeneration month for many of us. I know many of you haven’t had vacation yet, you’re not sure what will happen when the kids go back to school (or don’t), and we need to build this cycle into our businesses.
I just finished reading Lights Out, an amazing book about the recent history of GE. (I highly recommend it.) What the book teaches me is that Jack Welch and Jeff Immelt suffered from one fatal flaw: they never let GE “recover” from all its acquisitions, transformations, and trauma. For the last 30 years, we’ve watched GE go from “the business and leadership icon” to a company that is running out of cash and is divesting of most of its acquisitions.
This didn’t happen because GE didn’t have smart people. It happened because GE refused to tolerate a downturn or slowdown in its business when various segments matured, so they rushed into acquisitions, new ideas, and fads. I actually visited GE Digital several years ago (it’s discussed in detail in the book) and my entire reaction to the place was “these guys are rushing forward at a fevered pace but aren’t sure where they’re going.” As the book points out, GE Digital was not a “bad idea” but the pressure to immediately perform left the team unable to use their own “Lean Startup” methodology at all.
Apple, by contrast, is a company that goes through massive cycles of innovation and then long periods of incremental growth. Ditto Microsoft and others. This idea of companies operating in a cadence is important – so use the Pandemic as a time to simplify, reflect, and prepare for growth ahead. For us as individuals, take some time off now because the Fall and Winter will be here soon.
4. Empowering and coordinating the company is driving success.
The final lesson we’ve learned is that “central control” is not the best way to survive. At times we need strong central leadership, but in a time of violent and asymmetric threats like the Pandemic, we need to let people operate locally. Many companies understand this and they have built “globally integrated businesses” with lots of local control in the past – now it is essential to success.
I’ve been preaching this to HR departments for months: while we want a “center of excellence” for many things (safety, pay, recruitment, employee relations, etc), it’s the ability for people to react and make decisions locally that matters. No single CEO or CHRO can detect or identify all the problems happening around the world – right now some countries are “back to work” and others are “in a crisis.” So we need to assume our companies will be “federated” and design for coordination and communication, not interlocked decisionmaking and huge staff meetings before anyone does anything.
Last week I spent time with PepsiCo and we discussed in detail how quickly they developed an entire Pandemic response, education, wellbeing, and employee education program. Sachin Jain, the leader of the program, told me this was an enormous success – because they could act quickly and distribute the solution to business units in weeks. In the past, a program like that would have taken years of coordination to design. Now it’s designed to scale and flex at a local level – but remains coordinated globally through data and platforms.
As I discuss in the podcast, we are in the early stages of a global economic transformation and it’s not over yet. Just this week the UK CIPD (HR professional association) found that layoffs are continuing to accelerate and the gap between employers reducing jobs and those hiring has doubled (to -8%). So this is by no means over yet.
As it’s August I suggest it’s time for a break this month and I hope you’re taking a little time off. Listen to the podcast if you want more. Our Big Reset Research Report is coming out soon, and we’re now starting a new sprint. I’ll be here to share everything we’ve learned and if you have any questions please reach out to me.