Doug Fulton is a VP of Marketing at Uponor, a company involved in delivering water infrastructure in municipalities, commercial construction and residences. I asked him about how his business was doing. While he may be working from home, he and his team are definitely working. Business is being impacted, but things have to get done to position Uponor for the other side.
Doug said that it is like racing under a yellow flag, a simile I have shared with many since. It makes me wonder what it will be like when we see the green flag again, or whether it will actually be lemon-lime, then chartreuse, then maybe PMS 374.
I’ve talked to lots of people who, like me, are considering the consequences of what we are experiencing. We can all act as amateur economists, and I will venture there in a moment. But something I’ve been thinking about is whether the new behaviors we’ve adapted as we’re cooped up in our homes might stay with us in a future “normal state.”
Eventually, we will overcome our current dread of cozying up to a bar and rubbing elbows with a stranger as we down an IPA or a rainbow roll. That’s because we will sorely miss being around others. But some things that we are getting used to might just stick, because we find they are better than the way we behaved in the past. Here are 7 guesses at changes that will be with us after this crisis ends:
1. Retail has changed forever. We are not meandering through the aisles of grocery stores or C-stores, picking up impulse items. We go with a mission and a list. And we stick to it. Thirty percent of Americans have shopped for groceries online for the first time in the past few weeks. We are climbing down Maslow’s ladder. And we might find we like the results. This might have a profound impact on winners and losers in the green flag consumer economy.
2. Teleworking is here to stay. There are some bumps in the road as people have gotten used to this. But we like how Zoom conferences work. And a tidal wave of 5G is close behind, making cell telecommunication much better. Being out the office will not be such a big deal. I suspect business travel will never be what it was before. The face-to-face of a video conference will suffice for a lot of the meetings we’ve spent a couple thousand dollars on.
3. We may be witnessing the death of command and control. This could be a bit of a stretch. But remote working and videoconferencing makes decentralized decision-making really easy. And the autonomy of decentralization is hard to give up. Just consider whether your VP of sales on the other coast has always followed your direction! Even if you try to revert to form and centralize decision rights, you may just find that you are at a competitive disadvantage.
4. A hiring frenzy and a bidding war for talent will break out. It’s simplistic and wrong to think that employees will just return to whence they came. Many more Boomers will bolt from the corporate scene, either for retirement or for entrepreneurial pursuits dreamed up while sheltered in place and funded by near-zero interest loans. Filling the vacuum becomes the corporate prime directive, and it will be expensive. Companies will hire high-priced leaders without ever meeting them face-to-face (as many have started right now), with a lot of missteps.
5. We will worry about supply chain security. True story: I received a LinkedIn message that asked if I were interested in purchasing 3-ply medical masks, 4-ply medical masks, disposable masks, infared thermometers and swab kits. The sender is an area sales manager for a medical supply manufacturer in Hubei, China, right around the corner of COVID-19’s origin. Now, if I were a hospital administrator, I would be a little leary about PPE from Wuhan Province. Just as organizations have learned to secure their data, they will develop contingencies and redundancies for the flow of goods. Great logistics people have become much more valuable.
6. Economic whack-a-mole. National Geographic has published curves of deaths by city during the 1918 Spanish Flu epidemic. In New Orleans, Denver, St Louis, Birmingham and others, a relaxation of restrictions led to a second spike in deaths. Eager to restart the economy, some places will go back to work, only to shut down quickly again. Even today, factory workers in critical industries are afraid to go to work and afraid not to go to work. Even with robust demand from consumer and industrial sectors, local healthcare concerns will mean a rebound will come in starts and stops.
7. A fiscal crisis will emerge. Remember when politicians worried about the national debt? In recent years, this has been replaced by concerns about the legacy of climate change we will leave our children. Well, budget hawks will return with a vengeance, as we consider the consequences of a $2T stimulus package and others to follow, including a big infrastructure plan I foresee in 2021. The tax base will be reduced by a drop in the number of employees, marginal tax rates will rise and hard decisions will be made on government expenditures. Some new programs may emerge but only through the elimination of sacred cows.
Our lives have already been disrupted over hundreds of thousands of reported COVID-19 cases. We know the situation will get worse. Much worse. And we must do all that we can to buy time for equipment, treatments and vaccines to come to the rescue. It will take a long time, and during that time our habits and our circumstances will permanently change.
But we will find ourselves on the other side of this. That other side will be different, in some ways seemingly inevitable and in others unexpected. Over the next weeks and months, I will revisit this list. And I welcome your take on what our light at the end of the tunnel might look like, as you make plans for your business.
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