COVID-19 has disrupted businesses everywhere. Here are seven of the most pertinent trends faced by businesses worldwide and five steps leaders can take to move into the future seamlessly.
- Predictions are difficult to make for business, especially in the age of COVID-19 and global containment measures.
- However, HR and people-experience leaders at organizations can look for ways to take advantage of the trends COVID-19 has sparked already to benefit the people side of their organizations.
- From keeping digital integrations top of mind to emulating the entertainment industry's successful strategies, I outline five steps people-focused leaders can take to ensure agility and seamless pivots into the future.
As someone wise once said, predictions are hard to make – especially if they're about the future.
When we consider that COVID-19 and its effects are still very much present in many parts of the globe, this same logic becomes even more important. With wisdom and warnings fueling discussion about the future, however, I'd like to reflect on the implications of some key ideas for both the business and people side of organizations.
Here are a few of the most pertinent trends faced by businesses worldwide.
1. Localization will grow stronger.
Considering the many lockdowns and border closures in recent months, the concept of globalization has taken a hit. There could be a shift to local products or local consumption going forward – not only incentivized by the (temporary) situation, but also because corporations now realize the need to secure a local supply chain, even without restrictions.
According to The Economist, world trade could shrink by 10% to 30% this year alone, as the result of both COVID-19 and the ongoing tariff dispute between the United States and China. This shift toward localization is currently creating headaches for many companies, as restrictions are impacting free movement, travel and relocation. This could also affect the need for local services and talent in certain countries, therefore increasing the importance of fast and homegrown talent development.
2. Omnichannel experiences will dominate.
The idea of an omnichannel experience will be key for all companies. Whether you think of medical consultations (initial office visits transitioning to virtual in some markets during lockdown), the rise in online banking (and the 45% of consumers adapting to their banks' virtual offerings), or e-commerce increasing day by day (with new consumers beginning to browse and use online retailers in this crisis), it's evident that the online channel is now a permanent reality in almost all sectors.
Despite this, the need for interaction remains crucial as measures ease. In a recent webinar on the future of brick and mortar, Pierre-Yves Roussel, head of luxury retailer Tory Burch, argued for the integration of varying retail channels and discussed how physical stores must be an extension of digital offerings (and vice versa). All panelists in the discussion agreed that shopping would transform into a social endeavor – almost like visiting a restaurant for the experience despite having the choice to cook at home or order in.
This means that the omnichannel strategy as a one-channel integration will be a must going forward and that consumers will look forward to a seamless experience. Likewise, there will be a shift in focus from products and services to experiences. Companies with staffers who can quickly shift their mindset toward creating this experience for consumers will move ahead with client engagement.
3. Companies will need to work to restore trust.
Given that many well-known organizations took tough measures during COVID-19 – including layoffs, furloughs and salary adjustments – they will certainly need to regain trust among the working population.
These measures have relayed a certain message to workers: The companies they saw as caring and trustworthy for many years have let them down. Going forward, this will mean that companies must find ways to make their employees trust them again. This will require creating a consistent people-driven experience at all touchpoints.
4. On-demand entertainment will continue to skyrocket.
The success of on-demand virtual entertainment has been apparent in the marketplace. This is evidenced by Netflix's increase in both market share and shareholder value, the latter of which increased by nearly 33% between April 2019 and April 2020.
Netflix's main advantages have come from the way it produces and presents entertainment with a constantly updated catalog, series with binge-worthy episode threads, and the availability of films and series to suit all tastes. These ideas can be applied to other domains – especially corporate learning, company communication and even consumer interaction.
5. Companies must measure up to increased scrutiny.
Through this pandemic, governments have been forced to intervene in a much greater way than before – providing funds for individuals, assisting businesses with cash injections, and providing easier access to government-backed loans.
It's only natural that this intervention will result in more scrutiny as to how companies work and perform, with regard to taxes and regulations as well as less tangible measures. The concept of shareholder value might also change, traveling in the direction of the triple bottom line framework. This will have a direct impact on the projects companies embark upon and prioritize as well as measures for improving employees' development, engagement, and well-being.
6. People need to adjust to permanent changes in their daily lives.
Recently, people have put more focus on their health, including a broader interest in what it takes to remain healthy. This could mean that businesses will need to provide greater health-related support.
There has also been increased attention to the importance of savings. People have seen how crucial cash reserves are during a crisis, and this could lead to changes in consumption, spending or prioritization when it comes to personal decision-making.
In addition to the above, one of the biggest changes has been remote work, which countless companies have been forced to learn and do. This has disrupted the way people view meetings and one-to-one communication, and companies have adopted entirely new norms to adjust.
Although there have been mixed feelings as to the success of working-from-home measures (people long for social interaction, after all), it's evident that there must be greater freedom in the way people work going forward.
7. Companies will shift their views on office space and performance metrics.
From an organizational perspective, there have been many discussions surrounding the need for (and best use of) a corporate office, the importance of strict schedules and hours, and the best way to think about performance.
Many corporations will reevaluate the need to keep investing in prime location buildings to cater to all employees versus encouraging remote work. Business offices might become more of a symbol for organizations – a flagship location for the brand, with spaces for meetings instead of everyday work. As for performance management, we'll likely see companies shifting their focus from hours worked to truly outcome-based performance measures.
What does this mean for the people side of businesses?
As you already know, the COVID-19 pandemic and the trends it has sparked will have significant impacts on your business going forward. However, this is also an opportunity for HR and people-experience departments across all industries to work on the people side of strategy. In turn, you'll take steps to achieve competitive advantages or differentiation.
Here are some tips on how to do this.
1. Embrace digital integration.
As a people-focused leader, you will need to wholeheartedly embrace digital integrations in all you do, whether that's in the way you hire, onboard, assess, organize, reward, upskill or address performance. You'll also need to track the percentage of digital and virtual engagement in these activities and regularly examine their ability to help you make better, faster decisions based on management insights and data.
2. Reward competence rather than tenure (and focus on the right competencies).
Focus these competence rewards on employees' adaptability, as changes will be fast and unexpected. At the same time, you should make investments in the ability to think and integrate digital elements into your team's work. This includes engaging and growing talent, leading in moments of uncertainty, selling and working (and leading) remotely, innovating more quickly, and finding ways to integrate and work on both a local and global scale.
3. Carefully map out transitions.
There will be a transition phase to reach our new normal. You need to think about how you'll deal with the transition and guide your people through the process. Coaching at scale can not only provide people with the personalized support they need to transition, but also help them adopt mindsets that will serve them and your company. This will accelerate their ability to embrace the future.
4. Reconsider how you and your managers approach performance and results.
You will need to instill a different mindset in your company when it comes to performance and results. A greater focus on outcomes will mean a real change in the way businesses set goals and connect them to reward systems.
Managers must be guided and trained to consider how their daily work impacts business results and how key performance indicators connect to them and can be measured day to day. There must also be an acceptance that hard work is not always equivalent to performance rewards or success.
5. Engage by emulating the entertainment industry.
You will need to reengage your company, integrating organizational work and learning in a newer, fresher way. Find tools that enable connections and learning to take place in a gamified, impactful, and seamless way. These tools can be used on demand during the workday, either in person or digitally.
The entertainment industry has been very successful so far in providing personalized, on-demand, highly entertaining content through various devices – and its model could be worth emulating. The Netflix approach of "binge learning" should prevail when your employees want to continue learning and are encouraged to move on to the next stage in professional development.
As they usually say, a half-filled glass of wine can be seen as almost full or nearly empty. In other words, the way you look at things determines your wider outlook and actions. COVID-19 has certainly disrupted lives and businesses across the world, with some of the negative impacts already present and some yet to show. However, this disruption can be an opportunity for people-focused leaders to start doing things differently and find the route to differentiation through their people strategy, which is the closest link to success in business. In this way, you might just find a way to fill the glass with more wine.