The Order of Consequences
As we explore the effects of COVID-19 on organisations, some context to bear in mind is the accelerating rate of change within our interaction with the environment. We’ve seen the Cognitive revolution (70,000 years ago), the Agricultural revolution (12,000 years ago), the Scientific revolution (500 years ago), then 300 years later the Industrial revolution. Observing this time scale between periods helps us realise how this virus may serve as a catalyst, exacerbating this change even further.
The pandemic has revealed two types of people — ones that model a stagnant world (base-rate thinkers), and ones that model how the world can change (growth-rate thinkers). The failure of companies to predict such an event as COVID-19, the inability to efficiently adjust, followed by an uncertainty of the future, proves that while our current structures may be efficient, they are also old and maladaptive, with cultural manifestations seen through traditional physical office spaces, disciplinary silos and formal functional teams. Organisations are complex systems that are modular. They are composed of entities that are diverse, connected and interdependent. In dissecting this complex system, this article serves to evaluate the impacts of Covid-19 on an organisation’s culture and structure.
“The greatest danger in turbulent times is not the turbulence, but to act with yesterday’s logic.” — Peter Drucker
Possible Outcomes
Wearable technology may become mandatory, in an attempt for organisations to provide safety and assurance to its employees by monitoring their health indicators to gather insights and patterns. The same technology can also be used to track and trigger an individual when not maintaining social distancing rules. Already such a concept exists within the car insurance sector, where driving habits are tracked and incentives such as discounts are offered to encourage usage-based insurance. This certainly presents a risk of data protection obligations, and brings to light some unanswered questions:
· Should we still accept governance of new and unprecedented technology, by old data privacy and sharing laws?
· With changes already seen on legislation around cookies, will there be any other changes to data privacy?
· As individuals, how do we hold very little accountability as to why we allow apps to have access to our microphones or cameras? Why do we accept cookies on websites without reviewing them? Why don’t we read the T&C’s when downloading programs?
The key will be for organisations to anticipate the unique barriers to change so as to deal with any challenges arising from employees or government regulators.
When we change our perception and realise that technology works with us, not for us, the conventional definition of an office will be forced to change. A workspace design is influenced not only by the objective characteristics of our work, but also the culture of the organisation. The new paradigms we expect to see driven in would be modelled on virtual work, resulting in the physical spaces being repurposed. The office space can be re-utilised in creative ways such as setting up wellness rooms or innovation hubs which are aligned to the business strategy. Doing so will reduce the occupancy rates for office space. There are potential risks to consider including, losing the brand marketing ability of the physical structures, an increase in costs of IT infrastructure, as well as a rise in cyber security risks as employees will be working remotely.
Changing the workspace into a hybrid design will then create two forms of employees. Remote workers will benefit more from networking due to less physical social interactions, but consequently losing those interactions reduces the opportunities of unplanned synergy that can result in innovative ideas. On the other hand, employees that work in the office will create informal groups, formed on varying basis — whether one individual trusts the other’s health state or hygiene. This will create culture fracturing, forming barriers of exclusion amongst employees. The same group of employees (that work in the office) potentially have the advantage of more formal and informal interactions with their leaders which may create objectionable habits like undue dependence or nepotism.
I’ll briefly turn you away from this internal perspective to consider a much more holistic view. With the world still dealing with the effects of Brexit and the US — China trade war, we have inched a step closer todeglobalisation with the awareness of China’s dominant role in the supply chain industry. The outbreak in Wuhan has caused major disruption globally. There are two aspects to consider, the implications of over reliance on global supply chains and the imminent implementation of automation as a measure of mitigating uncertainty posed by human capital. A disruption to resources has now forced organisations to reform their structure to a micro supply chain approach, to leverage on local manufacturing. This strategy, coupled with the influence of Digital Supply Networks (DSNs), will allow for organisations to have optimal visibility and collaboration with their supply networks. As part of business continuity strategies, some jobs within this sector will become automated, with bots being introduced to minimise impacts of disruption to production. Offshore service industries such as call centres or accounting services in India, South Africa or the Philippines may have to be brought onshore. This is after considering implications such as costs of setting up virtual workstations in developing countries, taking into account possible service disruptions like slow internet or power outages, or possible cultural barriers of having employees work from home. Another immediate risk presented is the increase in overhead expenditure from wages once services have been brought onshore. But, as some companies divest from the offshore operating model, what will happen to the job market in Asia?
The above possible outcomes serve as a caveat to understand that by using tools such as scenario analysisthis will put organisations in a better position to model out future possibilities. Generally, this concept has been widely ineffective within organisations, not due to lack of robustness, but absence of continued exploration. Common business practice has seen a lot of companies predict alternative future developments, only to defer any learnings from that. To help moderate instability and build a more adaptive structure requires elements of novelty and cognitive diversity, through strategies of exploration and exploitation within a complex system, such as an organisation. There is a delicate trade-off, as an organisation neither wants to be passive nor over-exploit its sustainable business model. To become more effective, companies need to realise one of the key advantages of scenario analysis, which is that interim viability is almost irrelevant. It is meant to serve as a template for the possibilities of structural or functional change in scenarios presenting volatility.
We can therefore infer that “normal” as we know it is now an illusory concept that we are fighting to hold onto. So, as this wisp of hope eludes us, instead of clinging to inertness, we should thrive to recover from this pandemic and consider strategies that look towards improving our current and future states.
