We are currently in the middle of a world-changing event. The COVID-19 pandemic is going to change our lives in so many ways. From a personal standpoint, individuals are practising social distancing, staying indoors as much as possible and social interactions are practically non-existent. As humans, this new paradigm is not something that is alien to us but to maintain it as the new normal is quite jarring, to say the least. So, imagine what all this means for businesses the world over.
Everything is literally grinding to a halt, and governments are just raring to reopen everything again, but the health experts are recommending against it. So where does this leave all of us? Kevin Sneader and Shubham Singhal of McKinsey and Company wrote a thought leadership article on this very topic and it’s a very timely piece. While most businesses are only worried about near-term survival, it is also possible to consider the lessons of the past, both distant and recent. Only then, can organisations truly think constructively about the future? The authors of the article believe that three areas in particular – digital commerce, telemedicine and automation – could prove to be decisive turning points for enterprises during this pandemic.
Companies may not need to just tweak their business models, but, instead, they might actually have to start rethinking their entire paradigm towards commercial operations. One example cited by the authors is that supply chains with just-in-time inventory and distributed component sourcing may have to be reconsidered. Backups and safety plans might need to be built up. The rise of the contact-free economy, namely in digital commerce, telemedicine and automation is very real. In the US, the Federal Communications Commission is spending USD$200 million to improve connectivity between patients and virtual-healthcare providers.
Greater automation was already occurring before COVID-19. In late 2017, the McKinsey Global Institute estimated that 60 percent of all jobs could see more than 30 percent of their key tasks automated, affecting 400 million to 800 million jobs around the world by 2030. According to the Brookings Institution, over the three recessions that have occurred over the past 30 years, the pace of automation increased during each. The report also highlighted that as of April 10, governments across the globe had announced stimulus plans amounting to $10.6 trillion—the equivalent of eight Marshall Plans. Most spending is directed to three areas— supporting citizens’ basic needs, preserving jobs, and helping businesses to survive another day.
The authors of the article did go to great pains to highlight some positives that may be emerging from this blanketed sense of sadness that envelopes us in this COVID-19 pandemic ravaged state of affairs these days. Firstly, it is the human need to communicate. Every generation is now learning to use software like Zoom, Skype or FaceTime, and for businesses, we are all getting to grips with remote working. For the disabled or for those who prefer nontraditional career trajectories, this new way of doing things is a boon. In short, business leaders are now more astute about what can or not be done in this new operating environment. The article ends on a very pragmatic note and its imperative that all businesses realize that speed is everything these days. Companies are going to be forced to do more with less. We are all going to find better, simpler, less expensive and faster ways to get things done.
Source: McKinsey & Company
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