Prepare For The Next Normal

COVID19 has upended our lives, families and businesses. Every pandemic teaches the same lessons and we learn every time.?We revolutionize the world of commerce but show very little or no progress in our personal lives. Hope this time is different.

Despite the headwinds created by the catastrophe, the US economy is robust, though the rebound is expected to be uneven across countries. The legislative responses in the past couple of years, substantial fiscal support, and the widespread vaccinations led to growth in consumer spending, the main engine of US Economy. This pushed the US GDP bigger than it was before COVID.

The challenges and opportunities around us are the best learning and test environment for all of us. Those that successfully demonstrate their ability to respond to the Covid-led-realities, survive and grow and for others, the future is as lethal as Omicron for ‘unvaccinated’.

Emergence of new variants and the uncertainty of the future economic conditions push businesses to be ready for the next normal. Especially in the IT services industry, I see a few conditions that we should be prepared for.

1. Workforce disruptions that lead to labor- and skills-shortage, wage inflation, vendor price increase, remote/distributed workforce, and geo-political tension.
2. The surge in the demand for productivity growth through digitization, automation, agile processes and long-term workforce optimization.
3. Design for superior customer experience by adopting innovation through new technologies.
4. An employee-centric culture that is nurtured to deliver the customer value proposition.

There are serious consequences if we are not prepared for the next normal. The top-2 in my mind are:

1. Never in the past we had the scarcity of labor and skills at the level we see now, while demand for products and services is very high. Since supply hasn’t stepped up yet, the only tradeoff is that the consumer price index is continuously raising. The bubble has to pop sometime sooner, else the gap in the economic profit will continue to widen among companies, challenging an inclusive economic growth.
2. Control your destiny or someone else will – Remember this first of six rules of Jack Welch? ?2021 has seen a massive increase in startups. In the United States alone, business startups have grown from ?3.5M in 2019 to 4.4M in 2020 and another 21% increase in 2021. In NY City alone, investments in tech startups tripled to $55B in 2021. ?All of these prove the facts that (a) there are new entities emerging to solve customer problems and (b) innovation is happening at a fast pace around us, challenging our current businesses to change faster than we want/have to.

I like what James Manyika of McKinsey said in the IMF report on “Life Post-COVID-19” - ?“Choices made during crises can shape the world for decades to come. What will remain critical is the need for collective action to build economies that deliver inclusive economic growth, prosperity, and safety for all”. Let us all make the right choices in our personal and professional lives. Good luck everybody.