Editor’s Note: Grant Stanley is a seasoned Business Coach and a Sales & Marketing Expert with a 20+ year outstanding Sales and Marketing record. He is also an author on Flevy, where he has published materials from Business Fundamentals to Management and Leadership Excellence. Take a look at all of Grant’s Flevy best practice documents here.
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Business and life will never be the same after COVID-19. We’re already seeing how this dire situation is affecting the way we work, communicate, buy, bank, learn, play, and even consult with doctors. Managers and employees are working and meeting online when normally they have to go to their respective offices.
I’ve written previously about the sweeping adaptation to business continuity management practices, as well as the potential changes of how we work and play but it seems reality is unfolding much faster than expected.
In financial services, local banks have been heavily promoting their digital banking apps. Central banks are even starting to encourage digital transactions to avoid the spread of the virus. Donation campaigns are also being done digitally as well.
For non-critical health issues, tele-medicine is encouraged and used. For those not having access to exclusive platforms dedicated to this, some opted using live streams via FB or IG Live to communicate. Both are used for official and unofficial use by our healthcare front-liners.
In the area of learning, companies and institutions have stepped up to provide free e-learning content and access to learning management systems.
In the coming months perhaps even days, people and organisations will be forced to adopt digital technologies to conduct their businesses and everyday lives. This will be the new normal.
Reviews will definitely be done to various systems of governance, education and healthcare
For us in the midst of the COVID-19 crisis, build back better means making good on the commitments to stakeholders that everyone was so energetically talking about last year.
Even short-term evidence indicates that a more socially responsible approach might also be a more resilient approach. According to an analysis by Just Capital, companies that have prioritised workers and customers during this crisis are doing better in the market. Scholarly research in finance has shown that investing in corporate social responsibility (CSR) creates greater social capital—norms of trustworthiness and the propensity to reciprocate—which leads to greater resilience, because being trustworthy is more valuable in times of uncertainty and upheaval.
Yet, even before the crisis, one-third of Americans thought technology companies and banks had a negative effect on the country, and more than half had a negative view of large corporations overall. The trust isn’t there . . . yet.
What would it take? To build back better, companies need to redesign, reorient, and realign.
Redesign Work for the 21st Century
Companies need to radically redesign work. Here, workers are guiding us to solutions. A living wage guaranteed sick leave and care leave, and increased safety will address many of the deep inequalities that the pandemic has brought even more clearly into focus. For many years, companies have resisted attempts to provide these benefits.
But we have now seen that it is possible. Aldi, Anheuser-Busch, Danone, and Nestlé, among others, have increased pay to essential workers. Dominion Energy, SimpliPhi, and S&P Global are offering more paid sick leave; and even Uber is now offering two weeks of paid sick leave to its drivers. Now that the previously unthinkable has been accomplished, it seems hard to return to old ways.
Even when workers might not have much power, given soaring unemployment rates, they are conducting walkouts and strikes to improve their precarious situation. They are unlikely to stand down as the economy recovers.
The 1918 Spanish flu pandemic holds some lessons: One of the biggest waves of labour protest in U.S. history occurred just after that pandemic peaked. Twenty percent of the total workforce went out on strike—police officers, steelworkers, dressmakers, coal miners, shipyard workers, and even Broadway theatre actors—and they got better working conditions as a result.
Today, essential workers are being applauded for risking their own personal safety to supply food, transport goods, and care for the sick. Yet they have historically been paid notoriously low wages with few benefits. Do we think we can go back to an old normal when grocery workers, home health assistants, farmworkers, and delivery drivers can barely scratch out a livelihood? Should we want to?
The pandemic has forced many of us who still have jobs into completely new methods of working. Disability advocates have long asked for accommodations such as work-from-home options, requests that employers often denied as too expensive or too complicated to implement. Now that abled people must work from home, organisations are finding that it is indeed possible to hold meetings, teach classes, and brainstorm remotely. Why wouldn’t we continue investing in these types of more flexible accommodations?
Modern capitalism has long rewarded the “ideal worker”—available at all times, dedicated to the job, without family encumbrances—but this is likely to change as people, in quarantine, rediscover the simple joys in life: time with family, friends, gardening, baking, crafts, hiking, DIY, etc…
But it all boils down to childcare. Many men working from home are now finding out just how intensive childcare is. Work has needed to adapt to deal with parents taking shifts with the children. As the economy reopens, women are disproportionately going to be held back if adequate childcare options and work arrangements are not available. Childcare has always been a rate limiter in women’s advancement. Companies now have a clearer window through which to see the challenge.
Reconfiguring Corporate Governance
Corporate boards will need to prepare for this new normal. The COVID-19 crisis has shifted the conversation: More attention is being paid to companies that offshore their profits to avoid taxes but then seek bailouts, to the need for universal healthcare and childcare, to the impact of reduced activity on air pollution, to unnecessary consumerism, to the possibilities created by a Green New Deal.
Saying you want to create value for all stakeholders is one thing, but doing it is another. So, if companies are going to make good on promises to pursue “purpose,” then boards of directors will have to create new standard operating procedures.
The most obvious step is to create mechanisms for these stakeholders to have a voice in oversight and decision-making. This requires an honest assessment of who stakeholders really are. It’s not just the usual suspects (for instance, customers or employees): Companies need to think about the communities in which they operate, the environment and their impact on supply chains.
Then stakeholders need a seat at the table. In Germany, labour is represented on the supervisory boards (aufsichtsrat). In the U.S., they are seeing increasing pressure to do the same, with a recent shareholder proposal at Walmart and a variety of legislative efforts in Congress. Other companies are creating stakeholder committees on their board (Airbnb is an example), charging individual board members with representing different stakeholder interests, or creating separate stakeholder advisory groups.
Some of these actions could be mere plasters (band-aids) on deep wounds if they’re not done seriously. Governance processes will need mechanisms for understanding trade-offs created by stakeholder interests and finding innovative ways to address them.
Building back better may also amplify forms of governance that are better attuned to diverse stakeholders. Cooperatives—with their democratic management processes and economic participation by members—may be best suited to a post-COVID-19 world. Or perhaps companies should be required over a period of years to qualify as B Corporations, which are legally obliged to address the impact on all stakeholders. These are more radical approaches than merely creating a board committee, but it is worth pointing out that these models already exist and may be better guides for our new understanding of 21st-century business.
The COVID-19 crisis shows us that corporate “purpose” cannot just be a fancy bow that companies tie on top of their operations to dress them up. Taking care of all stakeholders will require real transformation. In this moment of upheaval, we should be envisioning how we can build back better.