Top Business Trends Shaping A Post-COVID Environment

Few would have predicted a year ago that 2020’s challenges would result in such dramatic changes. Global supply chains were interrupted, business and personal interactions shifted online, and remote work took off at an almost unimaginable scale.

In response, business leaders are making their supply chains more flexible and resilient—both to respond to this pandemic and better prepare for future disruptions. Digital strategy—both in manufacturing and online delivery—had already been moving quickly but was dramatically accelerated. And talent strategy and real estate footprints are already being planned for a different and more flexible future. With vaccines starting to rollout in many countries and with an end to the pandemic in sight, which of these changes will stick in a post-COVID environment and how?

As business leaders plan for the future, there is an opportunity to reimagine some elements of operations and speed the adoption of emerging trends that otherwise would have taken many years to unfold. Leaders are now asking how to permanently capture productivity improvements seen in recent months from rapid digitization. Leaders are exploring how to engage employees more deeply—particularly as burnout rates, stress, and mental health issues are increasing, and how to improve employee experience. As we reflect on the business environment over the past year, here are the top trends worth preserving, and even accelerating, in 2021 and beyond.

Supply-chain resilience becomes business-critical

Supply-chain disruptions are not new, but they are increasing in frequency and severity. In fact, production disruptions that last a month or longer now occur once every three to four years, on average. But many companies that had relied on traditional scenario planning did not fully assess their risks and global dependencies until this year; risks of global contagion and multiple locations being affected simultaneously appeared remote. Now they know better. Instead of optimizing supply chains for just-in-time delivery, operations leaders are emphasizing resilience and flexibility—increasing inventory, particularly of critical inputs and supplies, and assessing back-up plans with vendors and partners.

This has been a longer-term trend in the making, accelerated by the multi-month disruptions beginning in February and March of 2020. The events of the past several years, from the COVID-19 pandemic to trade tensions and climate-related disruptions, have changed the risk profile of global supply chains. As a result, supply chain resilience is now a top agenda item for many CEOs, boards of directors, and investors.

Some companies are pushing further in reimagining their supply chains for the future, building them atop Industry 4.0 technologies such as automation, advanced analytics, and the industrial Internet of Things. They are collaborating with partners across the value chain in new ways, with real-time monitoring, greater transparency, and aligned incentives, so that they can focus on their strengths—and scale production up and down much more seamlessly.

Digital capabilities speed forward

Rapid acceleration of digital capabilities helped save companies when in-person interactions and sales were no longer possible. Digital—often enabled by analytics—has transformed most industries now. Even interactions that were previously thought to be inherently in-person, such as car test drives and real-estate viewings, can now be completed virtually. And many of the consumer behaviors and habits that have started during COVID-19 are expected to continue: increases in online shopping, grocery delivery, and takeout delivery seem set to last.

Manufacturing has historically been ahead of the curve, as continuous improvement and lean management were applied to manufacturing decades earlier than in many other industries. However, manufacturers have faced challenges in developing a digital strategy: determining how deeply and how quickly to invest, which technologies to deploy, how to manage the operational transition, and how to best develop a skilled workforce to execute it. As we emerge from COVID-19 and enter the next normal, manufacturing and supply-chain leaders have an opportunity to use a combination of digital, analytics, and automation to create more flexible and effective operations. Scaling up and integrating small tests and getting past pilot purgatory will be key to drive the change at pace and at scale.

The future of work is here and now

Work is changing faster than before, and the skills required to navigate and effectively lead in this environment are rapidly evolving. Continuously building our own skills and helping organizations reskill at scale will be important to fully capture the value of the technologies that matter most to business in the future.

McKinsey Global Institute estimates that the need for basic cognitive skills and physical and manual skills will decrease over the next 10 years as the use of automation including things like optical character recognition (OCR) increases. In contrast, the need for higher cognitive skills (using judgment and experience), social and emotional skills (interacting with people and reading reactions), and technological skills (interacting with technology) will increase dramatically. The need for technological skills will increase by nearly 50 percent by 2030.

The most successful companies have defined learning journeys for different roles, and encourage employees to go above and beyond those journeys to explore their areas of interest. While many organizations typically try to use attrition to address workforce imbalances, employees can also shift into new roles, so long as at-scale reskilling efforts are in place—along with meaningful career paths. This change in mindset can help companies adapt to the new environment with their current people, rather than undertake hard-to-sustain levels of recruiting.

Flexibility is a new talent strategy  

Pre-COVID, flexibility was the number one thing that employees said they wanted from their employer. And, seemingly overnight, many employees who were not frontline workers started to work remotely. At first it appeared it would be for a few months, but as the pandemic continues to unfold, for many it could be for a year or more. With work-from-home becoming commonplace, and reductions and restrictions in travel likely to remain for a good portion of 2021, companies can now offer greater flexibility than ever.

Many people are questioning how long this will last after COVID-19. Instead, could we be asking, why shouldn’t it stay? Finding new ways to accommodate employees’ needs may prove especially critical at a time when stress, burnout, and related mental-health risks have all increased. What’s more, they appear to be taking a greater toll on women—particularly mothers of young children, Black women, and senior women.

McKinsey Global Institute (MGI) research shows that women’s jobs around the world are almost two times more likely to be impacted by the COVID-19 pandemic  than men’s. In the US, more than one in four women are contemplating downshifting their careers or leaving the workforce completely. In September 2020, just as many schools were reopening remotely, 1.1 million workers in the US left the workforce, 80 percent  of whom are women.

In December 2020, women accounted for more than 100% of the jobs lost—women lost 156,000 jobs while men gained 16,000 jobs. And since February 2020 when the pandemic began, women have accounted for 55% of the net 9.8 million jobs lost. This shows the significant impact that remote schooling has had on working mothers: 40% of mothers have increased their weekly workload by 15 hours or more, compared to a 27% of fathers. And this is off an already unequal base—women already did more than double the amount of unpaid care work, such as shopping, cooking, cleaning, and care for children and parents.  

Companies that make significant investments in building a more flexible workplace that can continue to develop their skills over time will be better able to retain the employees most affected by today’s crises. Those companies will also be better able to create a culture in which women and other diverse leaders have equal opportunity to achieve their potential over the long term. That’s important for companies to retain crucial skills and capabilities—and for social equity.

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In many ways, COVID-19 has accelerated some trends that would have taken years to work through otherwise. It has come at an unimaginably high cost of lives and livelihoods around the world. To ensure that pockets of progress can be built upon, leaders can accelerate the progress of those trends in 2021 to build a stronger path to equitable employment.

Source: https://www.forbes.com/sites/kweilinellingrud/2021/01/14/top-business-trends-shaping-a-post-covid-environment/