We know there will be some kind of normal on the other side of lockdown, but what will it look like?
In twelve weeks of lockdown, we have experienced twelve years of process alterations and digital adaptations. If covid-19 had not emerged we would not have undertaken such digitisation changes in such a short time frame.
Yet this pandemic has only just begun. The virus looks set to follow the course of the likes of HIV, which has just had its 40th birthday, and SARS, which has been around for 15 years – both complex diseases, neither of which have vaccines. We lack data right now and most of our actions are based on human hope and wishful thinking for better outcomes than the worst-case scenario.
A new landscape
It almost feels like over the past few years we have been living on the light side of the moon, able to see and understand the layout of the land, its structure, our infrastructure and our connections. The global pandemic has forced us to move to the other side, the side with no sunlight, where we cannot see the landscape.
We now find ourselves having to find ways to illuminate what is there so that we can build again. As such we are not creating a new normal, as many have commented, but we are instead discovering what already exists.
A new normal?
It’s important to recognise that the so-called “new normal” we’ve heard so much about during lockdown was always there, we’ve just been compelled to face up to it now. The global lockdown and near shutdown of economies worldwide has given it immediacy. How we choose to emerge is being defined by our collective biases – the baggage we carry forward from the prevailing thinking, commercial references and the language we applied to the market we had.
What did this market look like? The dollar signs of our individualist, consumer-driven economy were shining so bright that everything else paled in the shade. We ended up with the unintended consequences of a market driven by profit at any cost.
Stop, look, listen
However, the isolation created by covid-19 has forced us to stop and question our model. This moment of reflection could help us to move to a sustainable place where we can thrive and prosper; living out meaningful and useful lives.
Here is a fact we need to face, the economic depression/recession we are experiencing is caused by us being able to buy only what we essentially need. This does not enable everyone to participate in the economy. The health of our economy depends on activities that are not essential to life like travel, holiday, luxury, entertainment, pleasure, sport and much more.
The post-covid economy we create should therefore be more resilient than the old one. Beyond exposing the brittle nature of global supply chains, top-down monetary policy, and a vanquished domestic manufacturing sector, the covid-19 crisis is also unleashing a powerful drive by local and networked communities to rebuild business from the bottom-up.
In the economic system we just left, the outcomes justified the means and this led to a specific set of behaviours. If we are to create sustainable prosperity and not be driven by profit at any cost, we have to first understand what profit with purpose means, and how to distribute profit to the ecosystem within a framework of trust and transparency.
Is digital more global or more local?
Our digital strategies have hitherto been based on being global in scale and personal at the point of implementation. As this “Global Village” cascades and tumbles towards its re-invention is there a power shift to local? Are we seeing the emergence of a “Local Loop” digital strategy?
It is apparent that the brittle (if highly efficient and effective) economics-driven global supply chain used to be a strength, but has now become a weakness. In fact, on closer inspection, it was enormously wasteful of unaccounted for resources, and only managed to be efficient because it could ignore the cost to the earth and humanity. The ‘more, faster, cheaper’ strategic driver created dependencies that worked, but only whilst the parties in the supply chain were able to deliver. Our capability to deliver was an assumption that we did not challenge until covid-19.
From fragile to flexible
As the market demands a move to more flexibility, resilience, and regeneration, local becomes a viable option as a new priority. In this context, we use “Local Loop” to mean where the source and use are elements in a locally grounded system.
We know that such local thinking changes the economics and this will affect pricing, which shifts demand curves, but we also know that the “at any cost model” resulted in fragility, which became our nemesis in lockdown.
Are we able and prepared now to shift from global supply chain thinking (start and end control) towards circular and regenerative models where the end becomes a new beginning? Local Loop will mirror how nature builds ecology, allowing complex, interlocking, local regenerative systems to thrive.
Policy and priorities
Local Loop thinking will have a varying impact depending on industry, country and context. In reality local, as a concept, is not new as a strategic option. However until now, it has lacked the model to compete at scale with global.
At WEF/DAVOS 2020 there were wide-ranging discussions led by the largest funds, such as Blackrock, who were proposing we move to ESG (Environmental, Social and Governance) based reporting alongside fiscal reporting to enable better judgment and decision making. A key impact of an ESG reporting requirement is to highlight the unintended consequences of the global model we have (or had). Awareness of proposed changes to a more balanced decision-making tool has been accelerated by the current global situation.
It is our belief that senior organisational leadership and boards who must be tasked with long-term development, under the stewardship of the chairperson, need to refine the board’s agenda and priorities.
Our strategic intent needs to take account of these newly emerging trends. This means that the board should request more data and invest time to understand and reflect on how the firm’s value, business model and performance creates resilience for a local mindset and not just a global one.
Further, we need more data, new analysis and better decision making to balance the organisation’s impact to determine the long-range effects on the wellness of the team, customers, and society.
Three questions to enable us to start such a re-assessment, are:
- Is this working for us? This being our global strategy.
- Who is us? How far, deep and wide are we considering the impact of our decisions.
- Of whom are we asking the question? Are we responsible and accountable for our decisions and by what mechanism?
However, in order to get there we first have to rebalance our race, gender and thinking in the boardroom. This will help us to close the gaps in the skills and perspectives we have access to, to enable us to deliver something new and not just wish for a return to the old.
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