Reality Reimagined: The Post COVID-19 Corporate

The world is at inflection point. The COVID-19 pandemic and global events point to the intense stress faced by the existing social-economic political order. The global economic slowdown, environmental degradation, anti-globalization rhetoric and rising populism are symptoms that the current system is finally reaching its growth limits. Despite this, the advent of the sharing economy and boom in the startup ecosystems has shown positive indication of a brave new world.

During the past several decades, the world has never moved so quickly… and it will never move so slowly again. The knowledge or information revolution has unfolded and there has been breakthroughs in computing and the Internet; giving birth to the Information Economy.

The world has never moved so quickly… and it will never move so slowly again

The next phase is now upon us and in this new era, digital cognitive-based technologies including artificial intelligence, robotics and autonomous vehicles will power the Intelligence Economy. The leap from Information economy to Intelligence economy will flip the roles of workers and machines from system of workers as the primary operators of machines that propel the economy, to an automated organism where machines are the new operators – albeit invented, engineered and optimized by innovators.

I would like to point out that the Information or the Intelligence Economies are not simply technological advancement, but a major paradigm shift of human behavior and mindset. One of the fundamental imperatives of this new era is trust. First and foremost let’s understand the science of trust.

The Neuroscience of Trust

Organizations spend huge efforts to try to engage and motivate their employees. Consider Gallup’s meta-analysis of decades’ worth of data: It shows that high engagement – defined largely as having a strong connection with one’s work and colleagues, feeling like a real contributor, and enjoying ample chances to learn – consistently leads to positive outcomes for both individuals and organizations. The rewards include high productivity, better-quality products, and increased profitability. It’s quite obvious that creating an employee-centric culture can be good for business. But how do you do that effectively? Culture is typically designed in an ad hoc way around random perks and benefits. While such efforts might boost workplace happiness in the short term, they fail to have any lasting effect on talent retention or performance.

I’ve found that building a culture of trust is what makes a meaningful difference. Employees in high-trust organizations are more productive, have more energy at work, collaborate better with their colleagues, and stay with their employers longer than people working at low-trust companies. They also suffer less chaotic stress and are happier with their lives, and there factors fuel stronger performance.

How Trust Creates Joy

Experiments show that having a sense of higher purpose stimulates oxytocin production, as does trust. Trust and purpose then mutually reinforce each other, providing a mechanism for extended oxytocin release, which produces happiness. Thus joy on the job comes from doing purpose-driven work with a trusted team. The Harvard Business Review has done several researches and experiments and the result can be summarized as follows:

When compared with employees at low-trust companies, employees at high-trust companies...

74% have less stress

50% have more energy at work

13% fewer sick days

76% more engagement

This clearly demonstrates the importance of trust in raising the employee engagement and satisfaction. Ultimately trust is cultivated by setting a clear direction, giving people what they need to see it through, and getting out of their way. In other words, give your teams the purpose, clear direction, empower them with the tools and trust they will do an excellent job. This may sound too good to be true. If you believe your teams are not trustworthy, then why have you recruited them in the first place? This is a typical problem in hierarchical organizations, where managers are expected to micromanage their teams, hence low level of trust and accountability.

If you believe your teams are not trustworthy, then why have you recruited them in the first place

This doesn’t imply that hierarchical organizations and micromanagement are necessarily bad or doesn’t deliver business values. The main takeaway here is that in this Information Economy, trust is the foundation for organizations to be able to form dynamic, agile, self-organizing, and high performance teams.

Trust and Information Economy

One of my favorite authors on how trust works in the modern world is Rachel Botsman. https://rachelbotsman.com/ . Rachel has authored 2 books What’s Mine Is Yours and Who Can You Trust? Check out her TED talk https://youtu.be/kTqgiF4HmgQ with the title “The currency of the new economy is trust”

She has predicted that the future of the Information Economy will be based on sharing, exchanging and collaborating with strangers. I first met Rachel in Rome, Italy in 2017 during the Project Management Institute EMEA congress. She was the keynote speaker and it was so inspiring to hear her elaborate of how the sharing economy have transformed the way we trust with each other. Applications such as Airbnb, Uber are based on trust. You stay in an apartment that you booked on Airbnb from a total stranger. You get in to the car of a stranger when you order an Uber. When we were children, our parents warned us not to talk to strangers, however technology has changed this and created trust to the extent that staying in an apartment of a stranger is the new norm.

Now that I have highlighted the importance of trust, I want to put this into the context of the impact of COVID-19 on the corporate environment.

The post-pandemic corporate environment

There has been probably huge number of articles, webinars and discussions of how the novel coronavirus known as COVID-19 will impact the world. Thus I will try to be more concise.

The past several years the buzzword in the corporate environment has been “digital transformation”. Digital transformation has created a big hype where organizations want to be digitally transformed, but in reality few actually what is really required. Digital transformation, unlike common perception, is not just using digital channels or deploying application or automating business processes. It is a change of culture and mindset. It is a common pitfall organizations think that by investing in technology or using social media channels, they are digitally transformed. In reality digital transformations is a journey and organizations need to set clear purpose and objectives of what to expect with milestones. More importantly organizations need to ensure that they have the right people with the right mindset, in order to capable of transforming their existing culture; and utilize trust and purpose as the foundation.

Check out my article “Business Transformation: The good, the bad and the ugly” https://www.dhirubhai.net/pulse/business-transformation-good-bad-ugly-thomas-mazejian-pmp-/

The COVID-19 pandemic has set off a new era which we will witness acceleration of digital transformation by the corporations and this will create a world of more virtual and less physical.

The main directions which will be impacted can be summarized as follows, although the below are not exhaustive and most probably there will be many other impacted directions.

1.      Evolving technology channels for customer engagement: Customer engagement is probably the most crucial part of any business. Corporations need to reassess their channels and need to take bold steps in transforming their sales and customer care channels. Do they really need to maintain the brick-and-mortar model or completely transform to digital channels? Organizations need to reinvent themselves by adopting existing and new technologies to serve customer event better while minimizing expenses. Amazon is the world’s largest retailer worth almost 1 trillion dollars and they don’t own a single shop (except for Whole Foods acquired in 2017). When Jeff Bezos, founder of Amazon first had the idea of selling books online, investors were very skeptical. How would buy books online? When Zappos (acquired by Amazon) an online shoe and clothing retailer started to sell shoes online, everyone was doubtful. Who buys shoes online? However after just 2 decades, the unthinkable happened, currently buying books, clothing and shoes online has become the norm. During the pandemic, e-commerce sites proved to be quite resilient and in fact they were working around the clock to fulfill customer orders.

2.      Digital processes, automation and AI as productivity drivers: Organizations who have not automated their internal processes faced a huge issue during the pandemic, as some of them they were completely paralyzed. Thus organizations will seriously thinking of automating their business processes by using cloud-based ERP or CRM systems. Small to medium size companies will also automate their processes as part of their business continuity and sustainability. Moreover technologies such as blockchain will become more widespread. Blockchain allows secure sharing of business processes (contracts, business records, business activities, or other records) between companies and partners (business peer network) in an encrypted manner. This essentially creates an accurate history of business transactions and activities. Embedded in all of these technologies will be Artificial Intelligence or AI, which will add intelligence to the processes with minimal human intervention.

3.      Data driven strategy and decision-making: One of the imperatives of digital transformation is the data-driven decision making. During the pandemic, organizations and governments realized that without having quality data and proper analytics they will not be able to make right decisions. Another important outcome of the pandemic is that the data becomes valuable when correlated across multiple sources. In other words, just by looking data from a single source will not be sufficient to gain powerful insights on global scale. Hence we will be seeing more creation of data portals whereby data from different industries will be hosted and exposed to the public. This in turn will create new ecosystem of start-ups and more organizations will make their decisions on insights by the multi-source data sets. For example, during any future pandemic it is so crucial to be able to know the mobility of the citizens for faster containment of the pathogens.

4.      Lighter physical space footprints and WFH (work from home): Organizations during the pandemic realized that the office space is not really necessary for normal business operations. Organizations are rethinking of possible ways to reduce their physical space footprint. This will enable major cost reductions of rent, and other expenses. In parallel, employees will start working remotely from their homes or from their preferred workspaces. This will open a new market for shared distributed office workspaces which will allow employees to rent their own workspace. I call this RYOW (Rent Your Own Workspace). RYOWs will become the new norm, as corporate reduce their office size and ultimately phase it out. This immediate result of RYOWs will be minimal commuting to work, more productivity, and higher engagement. RYOWs equipped with all the necessary requirements for people to work, organize conference calls, meet in person, while enjoying their favorite drinks. Organizations may introduce RYOW as a workspace allowance to employees.

Work From Home (WFH) and RYOWs will force organizations to adapt to this new reality. The first prerequisites of successful WFH is trusting your employees. High-trust organizations will adopt WFH quite smoothly, however low-trust ones will struggle. The second prerequisite is for successful WFH is upgrading the organization’s managerial skills. Managing virtual teams is not the same as managing physical teams. In other words there are set of skills, managers need to learn which will help them to manage teams who are working remotely. The third prerequisites that organizations should understand that under WFH free time is not equal to work time. This is typical pitfall organizations need to avoid as work-life balance still exists in WFH.

5.      Improved strategy execution processes: As a consequence of point 4, it is evident that WFH will become the new norm. Organizations having clear strategy execution processes will smoothly adopt the WFH. Portfolio, Program, and Project Management (PPPM) are the basic blocks for any strategy execution. Organizations increasingly will start adopting PPPM standards in order to increase the likelihood of successful strategy execution and be able to close the gap between strategy design and strategy execution. Without clear standards, it will not be possible to manage virtual teams. This will pave the way to Project Economy which is defined by Project Management Institute (PMI) as “The Project Economy is one in which people have the skills and capabilities they need to turn ideas into reality. It is where organizations deliver value to stakeholders through successful completion of projects, delivery of products, and alignment to value streams.” Read more on Project Economy https://www.pmi.org/the-project-economy

6.      Hierarchical organizations will need to transform to flatter: In order to survive in this new era, organizations which have hierarchical structures will need to do transform their structures and mindset from hierarchy to flat. Hierarchical organizations are outdated and cannot keep up with the fast pace of the Information Economy. Organizations need to be fast and agile in their decision making process, otherwise they will be left behind and will meet their demise. In the Information Economy the winner is not the big fish anymore, but rather the fast fish. In this transformed agile organization, employees network with each other freely, while managers’ role will be mentoring, guiding and coaching their teams. Teams will be cross-functional, trusted, autonomous, empowered with all the necessary tools and self-organizing. The organization’s success will be based on the team performance and talents, rather on the managerial competencies.

7.      Employees need to develop their skills and capabilities by self-learning: Capability development refers to creating a new capability or enhancing an existing one. Organizations that fail to develop new capabilities and skills, will be left behind. The utmost priority for organizations will be to recruit talented people who are self-motivated and keen to develop their skills without relying on the company’s resources. Let’s face it, in this fast-paced world, it is impossible for organizations to be able to invest in educating their employees. The new approach will be self-learning, that is each employee is responsible for developing their own skills and capabilities. More employees will start using distance learning MOOC (Massive Open Online Courses) platforms to advance in their careers. There will be increasing demand on applications such as Coursera and Udemy, especially focusing on improving soft skills. Possibly organizations may even introduce education allowance, which will encourage their employees to self-develop their own skills and competencies.

I would like to state that there is no doubt that COVID-19 pandemic will be accelerating the digital transformation, however without changing the mindset and without building a high-trust company, technology by itself cannot transform organizations. Humans are complex, technology is simple. Technology is an enabler, while humans may act as hinderers. If you want to build a sustainable, resilient and digitally transformed organization, first learn to trust more; and the rest will follow.

Stay tuned and follow me. In my next article, I will be sharing startup tips and ideas for the post pandemic period.