Novel-Coronavirus Pandemic will define the “Next-New-Normal” (3N Era) - Part 3 Final

Part 1, Part 2

Again... I cannot say enough about the sacrifices that our First responders and Healthcare professionals are making to get us out of the current COVID-19 pandemic. I want to call out some exceptional people who have gone above and beyond in responding to the COVID-19 pandemic. My physician friend @Sumeet Bhavsar who is on the front lines to help fight the pandemic and my pastor friend @Dio Pouerie who jumped in to help and feed the needy during the times of pandemic. Both are Kellogg alums!

Forty-eight hours since publishing Part 2 of this article, something very unprecedented has happened. The US oil prices DROPPED to historic lows on 4/20/2020 into negative pricing as oil supplies overwhelm the world's storage capacity. It hit $0.01 a barrel before falling eventually settling at negative $37.63. It is the lowest level recorded since the New York Mercantile Exchange began trading oil futures in 1983. I took the 2015 production costs of the major oil-producing countries and superimposed them on the US Oil prices. At 2015 production costs of oil $9 ppb (42 US gallons) and the price, on Monday hit -$37.63. While this historic move was due to the fact that the oil storage was already full to accommodate any more inventory of oil, which further indicates an expected slump in the future demand.

Based on the forecasts from the EIA, the price at the pump for the next couple of quarters is expected to be low indicating that there will be a slow start in the economic activity (refer to the chart above). I don't want to sound pessimistic, but these movements of Oil futures say lots about the future of consumers' sentiments. Oil is an important input for the global economic engine for producing goods and services.

The great news is that many countries have started to open up by lifting the restrictions. Within the US more than half of the states have decided to ease COVID-19 restrictions starting May 2020. But what remains to be seen is if the decisions will prove to be safe to the public or will it complicate the overall situation further. Historical and simulated data suggests that we may be too soon to lift restrictions while others think that with rising summer temperatures the spread of the viral infections may slowdowns. While some experts believe that we may never be able to find a vaccine for the Novel-Coronavirus, while others believe that we will be better off finding a medicine that could potentially reduce the lethal nature of the viral infection. Whichever path we head down, we will learn to coexist with this virus by changing the way we live, the way we interact and do things. This will for sure leave a very deep impact on human society for generations to come shaping our Next-New-Normal.

Now pivoting to the objective of this article, I want to close this 3-part series of the article by highlighting a few notable trends in which the business leaders should start to track and take action as we plow through the COVID-19 pandemic. Business models archetypes that will significantly influence the Next-New-Normal will be a combination of Touchless, Cashless, Humanless, and Hyperautomated business processes. Let's define these archetypes:

Touchless - Business models whose business processes can be executed with a minimal human touch. An example could be a warehouse where the materials are handled by robots or human-assisted handling during processing and last-mile delivery. Touchless is NOT the same as Contactless. Contactless essentially means humans do not come in contact with the customers while fulfilling the last-mile delivery. Dominos quickly changed their mobile app to allow its customers to enter instructions as to where the Pizza may be left when the delivery arrives at their doorstep. This was further complemented with digital pre-payment and pre-tipping on the app makes the delivery a contactless business process. Over the past decade, Amazon's Fulfillment Center has perfected Human-led and Machine-driven automation of its package sorting process. They are taking it one step further for automated picking, retrieval, packing, sorting, loading, and drone-based delivery of the packages making it truly a Touchless business process.

Cashless - Business models whose business processes do not use hard currency as a mode of payment for commercial transactions. They either collect the payment in advance or the user alternative means to process customer's payments like a QR or Barcode or Near Field Communication found in most smartphones. Mobile apps already offer these capabilities, such models will be more widely adopted across the supply chain. With the current technologies, most businesses can technically manage their AR and AP business processes using digital cash transactions. Cashless archetype reinforce Touchless and Humanless archetypes.

Humanless - Business models whose business processes that do not involve a DIRECT human intervention. This can be achieved using autonomous technologies or robotic supplementing the need for humans to perform physical activities in executing business processes. In the case of the services business models, these can be achieved through complete manned or unmanned digitization of the business processes using software-driven automation like chatbots conversational platforms, virtual contact center agents, robotic process automation (RPA), or artificial intelligence inspired solutions. Best Buy sells via self-service kiosks placed in strategic locations in airports, Redbox rents DVDs via self-service kiosks placed in retail outlets, Zip Car operates it business through complete customer self-service and rideshare model, Nuro’s R2 second-generation autonomous delivery vehicle can deliver anything in the last-mile delivery, EU commission launched Robot Fleets for Highly Effective Agriculture and Forestry Management for creating unmanned "Farm-to-Home" production process (conventional tasks such as tilling, sowing, harvesting of grains, can be performed using autonomous task robots and the self-driving vehicle for transportation), and Skoda's automotive car assembly plants use e-mobility coupled with autonomous self-aware technology for 100% humanless material movements with in the plants. Taking cues from these technologies, imagine CVS or Walgreens, delivering prescription drugs using Nuro's autonomous delivery vehicle to your doorstep or for that matter a Wymo sending an autonomous cab to pick you up. Amazon, Walmart, UPS, FedEx, Walgreens, Alphabet, and Dominos, are actively pursuing using autonomous Drones for last-mile delivery. The COVID-19 pandemic is a perfect opportunity for investing in such technologies at scale.

To complement the Humanless last-mile delivery I expect to see significant R&D investments in the areas of Surface finishing technologies and Contamination management solutions. Some of us are familiar with the Antifungal, Antiorder, Antimicrobial, Antibacterial, and Antiviral treatments applied to the various surfaces. For example, many sports apparel manufactures such as Nike, Adidas, and Under Armour treat their products with Antiodor chemicals that reduce body odor, different apparel manufacturers approach the problem of underwear microbes either by treating the fabric of the underwear with special chemicals to retard bacterial growth or use materials that have natural antimicrobial properties, such as merino wool or bamboo, Oxo cookware manufacturer market Antibacterial cleaning sponge and treat some of its cookware surfaces with antibacterials finishing, etc. Scientists from the U.S. Naval Research Laboratory have recently invented a class of potentially highly-mobile, self-spreading biocides that combine the wetting and spreading properties of silicone fluids with biocidal functionalities of ammonium salts. Many products will start using surface finishing technologies to keep consumers safe, for example, automobile interior treated with biocidal, laptop computers surfaces being treated with antimicrobials etc. Now, imagine last-mile delivery and packaging getting treated or made of such technologies which raise the confidence of the consumers and improves the hygiene of the overall supply chain material handling processes.

Hyperautomated - Automation can be either software-driven automation or mechanical automation. When business processes combine software and mechanical automation supported with cognitive and deep learning capabilities we can consider the business processes as Hyperautomated. It involves orchestrating various advanced technologies like Blockchain, artificial intelligence, machine learning, deep learning, robotic process automation (RPA), intelligent data mining, process mining, image recognition, conversational UX/CX platforms, IoT / IIoT, and self-aware technologies in a manner such that they can learn from their actions and orient themselves continuously. Hyperautomation will be instrumental in achieving Humanless, Cashless, and Touchless business models. The COVID-19 pandemic in 2020 will force the company Boards to relook the overall business strategy with a specific focus on Digital, this will force CIOs. CTOs, CDOs, and CISOs to reprioritize IT investments to support Next-New-Normal initiatives.

As businesses globally start to realize the change in the consumers' behavior, coupled with slow economic recovery, low demand, bankruptcies, cheap money, tax breaks, discounted valuations, industry structure change, and geopolitical power shifts, it will trigger waves of mergers, acquisitions, and divestitures across many industries. The COVID-19 pandemic will shrink the overall size of the pie of the markets. The competition will be intense since the pie is smaller and there will be too many to feed on it. Business leaders will discover new business models and changes to industry structure. In order to survive in a hypercompetitive environment, businesses have to rethink their business models and innovate using the four archetypes discussed earlier. One area where businesses will struggle will be acquiring the necessary digital capabilities to pace up with the post-pandemic hypercompetitive environment, which will further trigger M&A activities in digital space. A trend that was evident after 2000 and 2008 recessions.

Privacy in the age of pandemic

Well... let me put this way.... all our privacy was already under attack by misusing social media data. Unbeknownst to many of us, it is a bit obscure and unorganized industry that only deals with Privacy data mining and Psyco profiling internet users. They use big data platforms to gather data from various sources (online and physical), run algorithms to match up various personal parameters, and then build a profile about you, more importantly, psychological profile - things such as your likes and dislikes, your decision making trigger points, your network, how you are related to others, your online discussions, your browsing pattern, shopping interests, etc. etc. With the power in today's computer and ability to write complex software code once can easily build a near accurate psychographic and demographic profile about you. There are many companies that operate on a global scale whose only business is to mine various publically available data about all of us and build a database that is further sold to several digital marketing and other companies.

In 2018 Reuters reported based on an investigation of a data mining company Acxiom Corp's database had 750 individual fields that collected personal data about individuals. Acxiom has similar profiles for 700 million consumers. Of course, most know about how the now-defunct infamous Cambridge Analytica used the Facebook data to influence 2016 American elections. While several states and countries have started to enact privacy laws like CCPR in California and GDPR in the EU, the problem is that there is already too much information about us out there that it is difficult to retract by these regulations. Why am I talking about privacy regulations from a COVID-19 standpoint?

COVID-19 has forced millions of users around the globe to work from home. The only way to work remotely is to use virtual collaboration tools such as video conferencing, chat messaging, electronic document delivery, e-mail, etc. to operate in the virtual world. We seldom pay attention to the fact that all these virtual communication medium collects tons of data about us, while it is in flight or in rest. Once your data is in the digital world it cannot be controlled and can be duplicated, transferred, shared, and massaged for all nefarious purposes. For example, the Video conference company Zoom claims to have grossed over 300 million users in the last 3 months since the COVID-19. Zoom CEO Eric Yuan, recently admitted that video calls got 'mistakenly' routed through China. I have been in Cybersecurity space for over 10 years, routing is a mistake that is not often made. The problem is not the routing of the data, but the Chinese laws on privacy. China's Cybersecurity laws give absolute power to the government to access any data that are residing or flowing through the networks in China. Now, think about Zoom's mistake once again. Is it a mistake or intentional? Well, my purpose of this article is not to talk about geopolitics, but to merely highlight that COVID-19 has already put our privacies at risk.

South Asian countries learned from their experience fighting the SARS and MERS pandemic and developed an approach to trace people who could have been potentially exposed to a virus infection. One of the reasons why those countries were able to tackle the COVID-19 pandemic relatively better than western countries. Contact tracing is the process of identification of persons who may have come into physical or proximal contact with an infected person also called "CONTACTS" and steps followed to trace all the contacts and gather their information to detect any potential contagious transfer of the infection. By tracing the contacts of infected individuals, public health officials could potentially take steps to proactively treat or stop further spreading by either reaching out and treating or quarantining the contacts. This process can be difficult and may not yield TIMELY benefit if done using manual follow-ups.

Technology comes here for the rescue. With the 7.77 billion world population, manual or semi-automated contact tracing is just next to impossible. However, with 9.82 billion mobile connections and 5.28 billion unique mobile subscribers, of which there are 3.5 billion are smartphone users a smartphone app can be used to perform contact tracing digitally using Near Field Communication (NFC) or Bluetooth Low Energy technology. Apple and Google recently teamed up to create contact tracing mobile apps for their mobile phone platforms. They call it "Exposure Notification". However, this comes at the cost of the users agreeing to share the location of their phones, which is essentially your physical location. Prof. Danielle Allen, of Harvard University, suggests using a combination of Tokenization technology and Public policy which could potentially ensure that personal data is not misused and also protects the privacy of the cell phone users. Harvard Business Review recently published how Contact Tracing was very effective in slowing down the spread of COVID-19 pandemic in South Asia.

Another trend that is rapidly accelerating is the Corporate Spying on employees. Many companies actually collect lots of matrices obscurely about their employees' activities. This includes things like the number of phone calls on the company provided cell phones, the volume of e-mails exchanged, instant messaging traffic, meetings, log-in/log-off time, access to various online resources, internet browsing, and location data, etc. However, the purpose of such metrics was used primarily for the capacity planning of digital resources or calculating employee productivity purposes. With billions of workforce working remotely, most employers are scrambling to figure out what is the best and least non-intrusive way to monitor and track the employees. Many companies were not set up to monitor their employees' activities remotely and that too in a pandemic situation. This has resulted in significant up-tick on the employers resorting to using spying or surveillance software to keep a tab on their employees' PCs. While they're trying to allow their employees to work from home but trying to maintain a level of security and track their productivity. The thing is that employee spying is not something new, there has been much research published that indicate the organization has been collecting under the guise of Productivity or Workplace analytics. In the 2018 survey, Garner found that 22% of organizations worldwide are using employee-movement data, 17% are monitoring work-computer-usage data, and 16% are using Microsoft Outlook- or calendar-usage data. In fact, Microsoft Office 365 provides personalized Workplace analytics add-on. It does this by collecting data on how the organization collaborates and spends its time. Information is gathered by tapping into Office 365 email and calendar metadata, to/from data, parsing subject lines/body text, and timestamps on employees' activities. In 2019, Accenture in a global survey on Responsible use of workforce amongst the C-level executives found that 62% said that their organizations are using new technologies to collect data on their people and their work to gain more actionable insights — from the quality of work and the way people collaborate to their safety and well-being — fewer than one-third (30 percent) are very confident that they are using the data responsibly.

Recently I was approached by several Private Equity firms to reach out to me for consultation on various employee surveillance software as a potential investment target. There are already many vendors (InterGuard, Veriato, Time Doctor, Teramind, VeriClock, innerActiv, ActivTrak, and Hubstaff etc.). All provide a combination of screen monitoring and productivity metrics, such as the number of emails sent, instant messaging tracking, cellphone tracking to reassure managers that their team is really doing what they should do. Another way to look at this is from an angle of TRUST in the employees. Working remotely does create inherent trust issues that cannot be easily avoided by the managers. Trust is a function of employee value, organization's health, culture, leadership, and HR practices. Perhaps organizations should redefine the definition of productivity, be transparent with the employees on the existence of the surveillance software, educate good remote working practices, cyberthreats awareness building, and most importantly encourage transparent discussions with the employees.

Employers should rollout "opt-in" policies that allow employees to agree to volunteer to have their digital activities tracked during the work hours. Having a transparent approach will help drive Trust as well as promote good working practices since you know that your employer is tracking you.  

Other privacy trends to watch for will include things like a significant increase in spending on the Data Security, Application Security Testing, Endpoint Protection technologies, Blockchain inspired security solutions, Distributed Security, Insider threat detection solutions, Zero trust authentication, App wrapping solutions, and Identity Access management, etc. etc. Business Leaders should strongly consider revisiting their existing CyberSecurity strategies and incorporate changes to fend off new cyberthreats.

Rise of the Blockchain as "Trust-platform" across the Global Supply chain

Let me start by stating that Blockchain is a complex technology to understand for a layman or a business leader alike. I have been studying this technology since its inception in 2011 with the advent of the Cryptocurrency and I have come across many business leaders who know the terminology but are unsure as to how to use it or relevant to their business. So, I am not going to write about how the technology works, rather I will focus more on sharing my perspective on why this technology is promising and will be very relevant to post-pandemic consumers' behavior as well as the global supply chain. Pre-pandemic the companies raced to create what was called the fastest, shortest, reliable, and peak capacity supply chain. Some of the top fortune companies took pride in stating that they have the fastest supply chain and took the shortest time to deliver products and services to the customer. Amazon's Prime subscription delivery model became the gold standard of global supply chains and other companies tried to ape their supply chains after the Prime model. One important highlight of this pandemic is that it exposed the critical failure points within the global supply chain where even the Prime supply chain slowed down significantly and the best laid out supply continuity plans either failed or brought the business to a standstill. This will create significant learning for the next few decades and will trigger a complete ground-up transformation of the global supply chain. In addition to the traditional features of a good supply chain, there will be some new expectations in the supply chains of Next-New-Normal that will be essentially around the following ideas:

1. Creating a transparent supply chain where all participants have clear visibility of the business transactions as well as the movement of goods and services.
2. The supply chain will move from being highly centralized and controlled to a decentralized digital model so that no one country or firm controls the flow of the goods, services, and information.
3. The supply chains will be self-governing where the participants will behave in a manner such that it will benefit all members of the supply chain instead of the essential few.
4. ERP systems that will control these supply chains will undergo significant foundational technical transformation to embrace more open-sourced and decentralized technologies. Large ERP vendors like SAP and Oracle will cease to continue in the existing model of creating large monolithic and rigid business applications. To be successful in the Next-New-Normal they will have to help their existing clients by providing a roadmap to move to the next generation decentralized application architecture to enable Hyperautomation.
5. Several new technologies will make deep inroads to create what will be called the "Intelligent-Flow-Chains". Data and Analytics will form the foundation for creating the "Intelligent-Flow-Chains", on top of which Artificial Intelligence and Machine learning will play a pivotal role in this transformation.

These ideas create a strong business case for Blockchain adoption, as the pandemic underscores the need for more robust global supply chains that are data-driven, decentralized, trustworthy, traceable, transparent business transactions, and an economic recovery enabled through trade digitization. At the same time, blockchain may create significant confusion among the supply chain participants that are unfamiliar with the new technology and its path to adoption.

To help better understand why Blockchain platforms will become a critical enabling technology in the global supply chain, let's assume that the business process is a series of transactions. Each transaction has a buyer and seller, there is a trust factor between the two parties, there is an exchange of goods or services, and there is a monitory value association. Imagine you are a buyer, and of some of the questions that might arise are if the seller legitimate? are the goods or services sourced using sustainable processes? where did it originate? has it clear all necessary protocols before reaching me? how do I know if this item is safe for me? how does anyone know that the product or the service that reaches the consumer has been through all the safety checks before putting into use? how do I know that the goods did not originate or manufactured in a region affected by COVID-19? and many other questions. We just trust the brand and assume that companies are doing the right thing and have safe business processes before the product reaches us. Typically sellers spend on establishing evidence either in the form of third party certifications of the business processes or establishing a legal framework to limit the liability in case something goes wrong. If a company screws up then they issue a recall, perhaps after some damage is done to the consumer. Each transaction is a transaction that happens when a seller trusts a buyer. However, trust by itself is notional and does not have any value unless it is supported with certain promises to perform an action. One way to know about is from the Brand identity or certification claims made by the seller. While it's true that large companies have necessary frameworks in place to ensure their suppliers are following process, the consumer seldom sees any pieces of evidence of such actions being performed other than what is imprinted on a label. There are costs associated with various transactions that happen when goods and services exchange hands, I collectively call these costs "Cost of Trust". Basically, it is a cost that businesses incur to ensure that they are buying what they think they are buying. Blockchain technology offers a way for untrusted parties to reach consensus on a common digital history. A common digital history is important because digital assets and transactions are in theory easily faked and/or duplicated. Blockchain technology solves this problem without using a trusted intermediary. Blockchain platform offers a promising technology that is a special type of database. Transactions are not governed by a single party, but rather the entire transaction history is recorded in a decentralized, distributed ledger that is unanimous. To ensure that the network’s transaction history is not manipulated by anyone, the community behind the network has to agree on a common “reality”. One of the Blockchain inspired solutions is the Smart Contracts that are making its way into Procurement business processes.

In the globalized economy that we live today, no country can just shut down trade with another country, but because of the epidemiological nature of the Novel-Coronavirus, countries have started to put restrictions on the cross-border trades and this will call for the global supply chain needing tighter control and transparency in the way the transactions will happen between the countries in the future. Blockchain’s unique digital architecture (Decentralized, Distributed, Immutable, Tokenized, Secure, and Unanimous), positions itself as an effective catalyst for establishing a safe, secure, and transparent supply chain will trigger rapid adoption of Blockchain platform across the supply chain to track, trace, and establish transparency in handling business transactions. For the Blockchain technology to thrive, the global economic systems have to undergo fundamental modification to the way business is done. This would involve changes to the financial structure, legal frameworks, economic framework, and most importantly the democratization of the technology itself.

Sustainability and Climate change will be a priority board room discussion

Perhaps this is the first time nearly in a century that the economic activities across the globe have slowed down significantly and rapidly (faster than 1929 great depression). Scientists across the globe, weather satellites, and imaging satellites are collecting mountains of data to see how climate change will be impacted due to a significant reduction in human activities. I believe that post-pandemic we will have hard empirical evidence to show how the reduction in human activities will create a regenerative impact on global climate change. So far we have had most evidence that shows how climate change is affecting the planet, but not data that would show us the impact of stopping what we are doing at a global scale. Hence the environmental data that we collect during the COVID-19 will be instrumental in driving global climate change policies.

Business leaders should plan to anticipate such changes and figure out what it means for their business operations. In the last ten years, there has been a significant focus on ESG initiatives, however, only global fortune 150 companies took somewhat positive actions to change their business operations to show quantifiable contributions to the climate change. While most of these fortune companies focused on carbon footprint measurement, carbon reduction / neutral initiatives, and contributing towards community focused ESG initiatives, none really committed to a goal that involved rethinking the way they conducted their business or manufactured their products or rendered their services until recently when Microsoft came forward and launched the Carbon Negative initiative in January 2020.

On the 50th year, Earth Day is focused on two crises

1. COVID-19 pandemic and the irreversible damage that is being done to our climate.
2. A massive reduction in global air pollution during a difficult and challenging time is an unexpected sign that human activity is the source and can be a solution to a large part of global air pollution. 

While many organizations are doing various Sustainable Development Reporting as part of their initiative to show to the world that they are engaged in improving global sustainability, through community contribution and charity support, very few organization is taking concrete steps to really peel layers of their supply chain and business practices to determine the areas where they can truly contribute to regenerative climate change practices. COVID-19 for sure will push this boundary where the Board of Directors will have to seriously think to create Carbon negative outcomes from the way their companies conduct business.

2019 annual report of the Carbon Disclosure Project reported some startling figures about the environmental impact of Corporate purchasing behaviors across their supply chains (Source: CDP 2019 Annual report).

• Over a billion metric tons (equal to emissions of Brazil and Mexico combined) of emissions would be saved if suppliers to just 125 multinationals increased their renewable electricity by 20 percentage points
• Supply chain emissions are on average 5.5 times as high as a corporation’s direct emissions
• Just 4% of suppliers (292 companies) report having a renewable energy target
• 31 major buyers with combined purchasing spend of US$741.6 billion are actively engaging suppliers to switch to renewables
• Suppliers report climate change risks could have a financial impact of US$906 billion on their revenue

In conclusion ...

COVID-19 pandemic is an eye-opener for the entire mankind and its implications will not be taken lightly for generations to come. There will be numerous implications and what I have covered is just the tip of the ice-berg.

History has witnessed that human beings always learn from adversities and brave it to emerge stronger and have proven to be ROBUST and not just being RESILIENT. However, what makes this pandemic an interesting inflection point in the history of the world is that it affected everyone holistically and that too in the age where are in the cusp of the digital revolution. During this pandemic pretty much every part of the globe has experienced the power of internet and data and has lived the digital life in some form or other. As we emerge from it that rate at which the Next-New-Normal will dawn upon us is faster than we think, think about this... in the last 2-3 months, the world has digitally transformed across all demographics and regions at a rate which otherwise would have taken 2-3 years. As CEO Satya Nadella of Microsoft eloquently put it in the recent quarterly earnings call, 2 years of digital transformation in 2 months - "We’ve seen two years’ worth of digital transformation in two months. From remote teamwork and learning to sales and customer service, to critical cloud infrastructure and security—we are working alongside customers every day to help them adapt and stay open for business in a world of remote everything.” Coming out of this pandemic we will most likely experience exponential growth in technology adoption across the board. What remains to be seen is if we will learn from our mistakes and as we prosper, will we do it in a sustainable way such that our future generations can enjoy mother Earth, as did our preceding generations did.

We are in this together!!! Divided we will fail miserably. The choice is ours and only ours to make, do it so wisely and respectfully to everyone.

Data disclaimer

The data in this three-part series have been thoroughly researched and all sources are available. I have used data from reliable sources, used my analysis and judgment to arrive at the conclusion. Please do not hesitate to send your feedback to [email protected] or [email protected].

Thank you!