Triage, Transition, and Transformation
As some parts of the country reopen from the Pandemic Lockdown, there appear to be three phases that the economy and businesses will move through. I’m calling the process “T-3”, which stands for “TRIAGE, TRANSITION, and TRANSFORMATION.
During the preliminary phase of triage, companies learned how to operate in new ways, as workers were sheltering in residence. Zoom, Skype, Slack and other technological solutions became commonplace. There was no playbook for anything like this before, so it was trial by fire, with plenty of missteps along the way, which was to be expected.
We are now entering the transition phase, where corporations will take a conservative approach that will put worker safety before anything else. Companies are preparing for a slow transition, where only critical workers will physically be in their facilities. For every firm, “critical” will mean something different, but for most larger service companies, the vast majority of staff has been told to prepare to work from home at least through the summer and in some places, like New York, the period could extend through the end of the year.
The final phase of the post-pandemic economy will be transformation. Businesses, both large and small, are devoting much thought and analysis on how they will emerge and transform after the pandemic.
Scores are trying to answer hard questions like: Can some employee functions be performed remotely on a permanent basis? Do we need as much office space? How can we reconfigure physical workspaces to ensure the health of our staff? Do we need to curtail business travel? Can we conduct effective meetings and conferences using telecommunications? Should we employ clusters of employees in geographically diverse locations? How should we diversify supply chains? Can we use robots and technology to do repetitive functions, which often put human workers at risk?
As they ask these questions, businesses are waiting for Americans to weigh in. Given that U.S. consumers account for more than two-thirds of the economy, they will be important drivers of the transition and transformation stages.
Just because some states are relaxing their stay at home instructions, does not necessarily mean that large numbers of consumers will be ready to resume their previous patterns. In other words, “If you open, will they come?” Some Americans may feel spooked, especially those who live in or near hotspots. Even with social distancing measures in place, or the fact that your favorite restaurant will not be seating you shoulder to shoulder with another diner, it just may not be enough for you.
While we don’t yet know how habits will change in the post-Covid-19 economy, NYU Professor Scott Galloway told me that the pandemic “is really more of an accelerant than it is a change agent” when it comes to trends that were already emerging. For example, he noted that before the pandemic, department stores were in “the seventh inning of their life. Now they are officially in the bottom of the ninth.”
Concurrently, online sales at places like Amazon, Walmart and Target are growing dramatically, especially as the vast majority of their competitors are shuttered. Galloway is not saying all of retail will succumb to the virus, rather only those brands that can provide a unique customer experience will survive. They must also adapt to a more pronounced move towards thrift, which was already occurring for millennials, along with a desire to purchase or create hand-made products.
Other sectors like fitness could be transformed, as people turn to at-home solutions instead of going to physical gyms; the concept of staying in a stranger’s home via Airbnb may take a long time to recover; and there is likely to be a more pronounced emphasis on technology’s ability to augment health care, which could mean a big boost in telemedicine. Additionally, there will be continued growth of e-sports and gaming, as virtual events replace in stadium ones.
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