What We Have Learned So Far From the Great Pandemic

Twenty months have passed since the beginning of the pandemic in the US. If we’re lucky, we have about six months more to go if this disease follows the course of the Spanish flu pandemic 100 years ago, which, without the help of vaccines, lasted about 26 months.

Here is an updated article in the pandemic series I began in March 2020, when the outbreak broke out. Part 1 focuses on the impact I am seeing from broad society and marketplace issues. Part 2 focuses more narrowly on the world of Stakeholder Capitalism, Enterprise Engagement and Total Rewards, covered by the Enterprise Engagement Alliances media properties:?ESM at EnterpriseEngagement.org and RRN at RewardsRecognitionNetwork.com.

Note that while this installment’s discussion covers issues on the national scene, the EEA is strictly non-partisan and nothing in these observations should be construed otherwise. In fact, the principles of Stakeholder Management and Enterprise Engagement argue against a partisan party-system, as that combination generally does not favor facts-based, sensible decision-making. See:

ESM: Special Report—What Our Nation’s Party System Tells Us About the Dangers of Office Politics.

Part I:?Macro Trends

Part 2 (below):?Trends in Stakeholder Capitalism, Enterprise Engagement, and Total Rewards

PART I: Macro Trends

1. Truth has Become More Relative Than Ever Now That Any of Us Can Be a Media Authority

While there has always been plenty of loud disagreement on every possible subject, what’s different this time is that there is no longer any center of gravity provided by a once respected media that was held accountable by threat of libel. Remember the authority and respect for Walter Cronkite, Tom Brokaw, the Wall Street Journal, the New York Times, Time magazine, the National Review? Agree or disagree with them, before social media, the business model of media once demanded a degree of support from multiple sources before an idea could gain mainstream attention and most mainstream media adhered to a general respect for citing recognized, substantiated sources that created some benchmark for truth. Today, anyone, including me, can be an authority, do his or her own research, and authoritatively share their own conclusions as facts if they lack journalistic training or ethics. The social media platforms are not legally liable for this misinformation, so anything goes. ?What is worse, the media often follow social media to determine what to report on in order to gain more views for their own content.

The implications. The ordinary solution to a climate of misinformation is to double-down on training students at all levels on how to weigh the validity of research and sources and how to consider conflicting views. Now that how we teach our kids about the dark sides of our history or protect them from Covid has come under such fierce debate in many school board meetings, even the notion of teaching children how to find qualified sources for information could come under siege. There is no precedent I can think of to predict how this will work out. It took a generation after the Civil War for some notion of unity to return to the US.

Ironically, the business world remains one of the last bastions of true facts-based discussion because the consequences of being wrong are costly to the bottom line and one's standing.

2. Freedom, Patriotism, and the Definition of Law and Order Have Become Redefined

The people generally located in northern or so-called liberal urban areas—that is, those often associated with free-thinking, lawless radical views about social policies, drugs, or gay rights—are the ones now who are more generally submitting to the authorities on issues such as vaccine mandates and mask compliance. In many cities, it is the keepers of law and order and the first responders who are putting up the most resistance to what others consider law and order. The folks we generally associate with being most concerned about the sanctity of life and law and order are those who are showing less concern for the elderly and infirm dying of Covid and appear more willing to defy the mandates.

This redefinition of the borders between individual rights and community obligations would have been largely unthinkable in the US after Pearl Harbor, when most Americans accepted significant restrictions on their freedom to combat another foe, or when the polio vaccine was introduced. One would have hoped that, like an enemy attack, this pandemic would have united us. Instead, it has tore us asunder with no end in sight.

The implications. This is a shift almost equivalent to the transformation of the South from a generally Democratic region before the Civil Rights era to one in which Republicans now dominate with difficult to predict implications. The definition of patriotism and good citizenry is now up in the air.

3. Scientists Join Meteorologists in the Minds of Many Skeptical Americans

People have taken pot shots at meteorologists for years, since it is quite difficult to accurately predict the weather and the predictions are often wrong. Now scientists in general are in question to an extent not seen in a generation. First it was the debate over climate change, a phenomenon that is hard to prove in many minds. Then came the pandemic, a once-in-a-generation crisis that would challenge any expert and which of course led to mistakes and incorrect predictions, further undermining the credibility of science to many.

To me, it’s amazing that science was able to develop a vaccine so fast based on years of previous work and that the experts generally did predict what was going to happen in terms of the spread of the disease related to the mobility of people and their relative resistance to masks and vaccines. I share the general view that scientists are not perfect and that many mistakes are made, but also believe that a consensus of verifiable experts probably is a more reliable source of guidance than anything most Americans can come up with based on their own research.

The real questions boil down to beliefs about personal liberty versus public safety and the risks one is willing to take—the answers to which there is no clear consensus in the US.

The implications. Unless something radical occurs, any policy issues involving science, such as vaccines or climate change, will continue to involve a long slog.

?4. The Concept of ESG, aka Stakeholder Capitalism, Gains Traction, But the Jury Remains Out

The level of interest in and debate about Stakeholder Capitalism remains high in intellectual business circles, but hardly an American or citizen anywhere in the world has ever heard of it or understands how it could affect their lives. Some opponents still confuse it with “Woke” capitalism, which is a completely different phenomenon related to the involvement of businesses in social and political issues. Stakeholder Capitalism is about creating returns for shareholders by creating value for customers, employees, distribution and supply chain partners, the community and environment, and has nothing to do with politics.

Implications. Given that much of the talk about Stakeholder Capitalism remains just talk, the breakthrough is only coming because of increasing pressure from investors, employees, and communities who prefer to invest in and do business with organizations that care about the environment. The big question is what actions companies will take when it comes to a strategic and systematic approach to stakeholder management and reporting.

?5. The Huge Upward Flow of Wealth Is Still Widely Accepted

Despite the usual unequal impact of economic downturns on many low-wage workers, and the belief of many Americans that the playing field isn’t level, a large percentage of Americans even on the lower income scales still largely favor low taxes for the wealthy. Even the Democrats are going easy on tax increases for the rich in their latest effort “build-back better” bill.

Implications: Overall, the US remains one of the most business friendly countries in the world, giving us a significant advantage in terms of lower costs and fewer regulations in general.

6. The Flaws of the US Legal System Have Become Exposed for All to See

The ability for politicians to indefinitely stall all government procedures through perfectly legal use of the courts has laid bare a process that the wealthy have used for years to avoid responsibility or to attack competitors. Exposed to the public is a system that enables those with means to indefinitely delay the consequences of their actions or to bully opponents.

Implications. There is no end in sight to these practices and should be a warning to all people to carefully consider the risks of doing business with any companies known to be litigious.

7. Work at Home Is Now Inevitable with Enormous Long-Term Impact

Even the companies most desirable to work for are mostly recognizing that they will not be able to get people back to work five days a week without angst and that it does not make sense for many people to commute every day. This will lead to a complete restructuring of corporate culture implementation; starting with office design; how office time will be used to foster collaboration, innovation, and community; and how we can use technology to better connect us and align our activities. How does one manage by wondering around, as the author Tom Peters used to say, when no one is around?

Implications. Over time, this reconfiguration of work life will reshape cities and rural communities. Office towers may become hybrid buildings housing both residents and offices. Many storefronts may become mini warehouses for local delivery or house inter-related business or consumer services. Office sharing likely will expand in suburban, exurban, and even rural communities in popular tourism areas.

8. The Great Resignation Will Gradually Resolve But Will Have Lasting Effects

It stands to reason that the psychological and work-at-home affects of the Covid pandemic eventually will work themselves out. That said, there is no reason to believe that people will go back to the old days of commuting long distances to jobs they hate unless they must.

Implications. It is likely that for years to come most companies will simply have to pay more for labor, provide better benefits and work-life balance, and find new ways to manage people to enhance productivity. ?

?9. We Have to Turn DEI From a Guilt Trip into an Opportunity, and It’s Easy

With birth rates down, baby boomers retiring, and immigration restricted, we must turn to our vast minority and under-privileged communities of all races to develop the “farm team” we need to power growth in the coming years. While the folks in the racial equity movement fight for justice, we business people can focus on the business opportunities to find new sources of talent, customers, and distribution and supply chain partners.

Implications. For industry, DEI is a business opportunity, not a compliance issue or compensation for misdeeds of our ancestors. Looking for a customer and talent development strategy??Support existing or perhaps new education programs for kids in your company's communities starting in elementary schools in a way that provides kids the tools, mentors, and ongoing support they need to find their niches in life, and perhaps a place on your company’s payroll. The reward is a pipeline of talent for the sponsoring companies and viral goodwill in the communities to drive more customer and community engagement.

?10. The US May Have to Rethink Restrictive Immigration Policies

Even if organizations suddenly awaken to the benefits of building a source of employees in minority and disadvantaged communities, it will take several years to have an impact and many more to fully tap the vast wealth of under-educated, under-skilled Americans eager to join the middle class or more. The only short-term alternative is to open immigration to the literally millions who wish to come in and define once and for all the status of the “Dreamers.” This is not likely to occur in the current climate.

Implications: Expect the labor shortage to continue for years.

11. The Supply Chain Issue Will Get Resolved With Lasting Implications

Free enterprise is well equipped to address the supply chain issues, because the profits will be significant for those who do. That said, change takes time in business, and it could be up to three years before we know the full extent of how business sets itself up to reduce their vulnerabilities to supply chain disruptions.

Implications. It appears safe to predict that more companies will simplify their supply chains; bring more production back to North America and increase their inventories of key components.

Part 2: What We Have Learned So Far From the Pandemic

Tactical trends related to Stakeholder Capitalism, Enterprise Engagement, and Total Rewards.

1. Online Shopping and In-Home Entertainment Have Probably Peaked

The pandemic rapidly accelerated online shopping and in-home delivery and entertainment, but there are signs this has peaked, as nearly everyone was pushed to those services during the pandemic. People clearly still wish to go out to dine, shop, and attend events, and that desire will only grow as the pandemic recedes.

Implications. We might have reached the full impact of online shopping and in-home entertainment faster than ever would have occurred without a pandemic. The biggest lasting impact may be in retail, which we have already seen, and the movie business, in which new releases will probably be available in both theaters and in home at the same time, but with a premium price for streaming, as is now happening. My prediction that retailers would equip store employees with video cameras to support in-home shopping proved categorically wrong.

2. The Definition of Brands is Changing

The recent publication by Fast Company of a new Brands That Matter list indicates the degree to which people are judging brands more holistically in terms of how companies treat people and the planet. While Americans continue to prioritize their purchases based on appeal and perceived value and quality, when all else is equal, more people consider the treatment of people and the environment as well. The pressure is coming from investors as well as the Securities & Exchange Commission, which is expected to publish draft rules early this coming year requiring public companies to provide metrics on how they manage their employees in their 10-K disclosures.

Implications: Companies of all sizes will be under pressure to publish so-called human capital reports outlining their people practices and focus more on keeping their promises in marketing. It's not enough for companies to claim they care. There will be more pressure to prove it.

3. Experiences and Travel Will Matter More Than Ever

The explosion of travel this past summer reaffirmed the inevitable rebirth of travel, with an increasing focus on authentic experiences that make it worth it to get on a plane rather than enjoy travel vicariously on wide-screen TVs. The popularity of the Anthony Bourdain and Stanley Tucci travel series reflects the growing appeal of discovery or immersive travel, as do the unprecedented popularity of national and local parks.

Implications: Expect the travel industry to emphasize more intimate, authentic experiences that take people away from the crowds. The popularity of amusement parks will endure, but the popularity of the great outdoors, food, and culture accelerated by the pandemic shows little sign of receding.

4. Business Travel Changes Will Endure

I haven’t met one executive yet—except perhaps those in the travel industry—who say they can’t wait to go out and travel in the same way as in the past. Much of the travel used for training and even routine account maintenance can be effectively handled via video meetings, requiring much less time for both the suppliers and customers involved.

Implications:

• Business travel will gradually come back, but with a focus on meetings to build relationships, collaborate, develop new ideas, or just to get to know one another, and less for routine training and support.
• Hybrid events are here to stay with increasing production values. We have learned that hybrid events are not the enemy but can extend meeting attendance. Creative producers will find new ways to make business video as engaging as good TV.
• Trade shows and conferences can thrive if they focus on what people want to accomplish now when they travel—get to know one another, collaborate, get their questions answered from people they can trust. It’s time to end the difficult-to-defend practice of spending money on elaborate displays when what people want to do is collaborate or dedicate most of the conference schedule to speeches and panel discussions. People will flock to conferences that enable them to spend the bulk of the time collaborating and sharing, rather than getting lectured to.

Areas in Which Big Questions Remain on the Long-Term Impact of the Pandemic

?1. Budget Increases Are Underway for People, But Will the Bright Shiny Objects Continue?

Clearly, many companies will be hiking pay and benefits and looking for new ways to address morale. At the same time, there is plenty of evidence that companies will again be looking for quick fixes, such as glitzy technologies, surveys, contests, rather than using a strategic approach that addresses the root causes of engagement in a measurable and reportable manner.

Implications: There is increasing evidence that senior management will be looking for a clearer return-on-investment on people expenditures, but to what extent is difficult to guess because most CEOs have little training in formal human capital management and analytics.

?2. Will Enterprise Engagement Technology Become the CRM (Customer Relationship Management) of the 2020s?

Expect more investor dollars to pour into engagement technology but it remains to be seen in which direction. Will it be for more glitzy reward platforms or will the technology address the real need for organizations to support their purpose and goals through a seamless, smart-phone integration of all their engagement tactics, i.e., communication of purpose, goals, and news; DEI; assessment and feedback; learning; innovation and collaboration; rewards, recognition, and loyalty; reporting and analytics, etc.

Implications. Companies looking for bright shiny objects will gravitate to flashy technologies, attention-getting benefits, or other short-term fixes rather than taking a strategic and systematic approach to addressing all of the issues that go into fostering the proactive involvement of employees and other stakeholders.

3. Will Marketing Shift From Making Promises to Delivering Them?

There is little sign that the advertising world has embraced the need to keep promises. It simply is not in their culture or wheel house to address the issue. At best, agencies are supporting efforts to make brands look wholesome and people-focused.

Implications. We cannot expect advertising agencies to lead the way in Stakeholder Capitalism as they are showing no signs of focusing on the need not just to make honest promises, but to keep them.

4. Will Serious Human Capital Reporting Take Hold?

There is no doubt that more companies of all sizes will publish Corporate Sustainability Reports that include human capital reporting. The pressure is coming from investors, consumers, employees, communities, and even the US Securities & Exchange Commission, the European Union and in the UK. The real question is: will these reports remain essentially press releases with little information of value to a discerning reader?

Implications. As the pressure grows on public companies to disclose meaningful information, the pressure will cascade to the companies in their supply chains and to any company in a market in which competitors are serious about marketing their people management practices.

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