Return: A new muscle, not just a plan
Return is not a phase; it’s a way of operating. A nerve center can help build the capabilities that businesses need in the “next normal.”
By Mihir Mysore, Bob Sternfels, and Matt Wilson – In less than four months, COVID-19 has upended almost all expectations for 2020. Beyond the loss of life and the fear caused by the pandemic, businesses around the world have faced disruptions at a speed and scale unprecedented in the modern era.
Companies everywhere are now wrestling with the question of how to reach the next normal safely. Many talk about a return to the workplace as a plan that needs to be implemented: a series of systematic steps to reach some kind of stable operating model, in a world where vaccines are adequately available or herd immunity has been reached. In many cases, these plans suggest a return to some relatable version of the past.
Yet the intrinsic uncertainties that might scupper such plans continue to mount. Executives readily admit, for instance, that it is tough to write a deterministic return plan because of the likelihood of a resurgence, discoveries about how the virus is transmitted and whom it affects, the nature and duration of immunity, and continued changes in the quality and availability of testing and contact tracing. The best possible plan today is merely a strawman that will need near-continuous recalibration and change.
Another critical uncertainty is the future of remote work. Some feel that recent events have driven a real productivity gain they do not want to lose. However, they recognize that a wholesale shift to remote work has had many false dawns. Silicon Valley has experimented with it most extensively, but after many attempts to implement telecommuting, our research found that at 15 top firms, only 8 percent of the employees work remotely. These companies do not want to try this again only to roll it back in a few years.
Customer behavior is a third unknown. Companies see the clear shift to digital among consumers and its inevitable impact: online shopping has expanded by up to 60 percent in some categories, and up to 20 percent of online consumers in the United States have switched at least some brands recently. But it’s unclear whether once the pandemic recedes, these customers will return to their old ways or if the pandemic will create new types of consumers.
Given these and other uncertainties and the need for experimentation and fast learning to navigate through them effectively, we believe that the next step in the response of businesses cannot be thought of as a phase at all. It will be open ended rather than fixed in time. A better mental model is to think about developing a new “muscle”: an enterprise-wide ability to absorb uncertainty and incorporate lessons into the operating model quickly. The muscle has to be a “fast-twitch” one, characterized by a willingness to change plans and base decisions on hypotheses about the future—supported by continually refreshed microdata about what’s happening, for example, in each retail location. And the muscle also needs some “slow-twitch” fibers to set long-term plans and manage through structural shifts. more>
Posted in Business, Economic development, Economy, Education, Healthcare, History, How to, Net, Technology
Tagged Business improvement, Health, Internet, Jobs, McKinsey, Pandemic, Skills
The economic impact of closing the racial wealth gap
The persistent racial wealth gap in the United States is a burden on black Americans as well as the overall economy. New research quantifies the impact of closing the gap and identifies key sources of this socioeconomic inequity.
By Nick Noel, Duwain Pinder, Shelley Stewart, and Jason Wright – The United States has spent the past century expanding its economic power, and it shows in American families’ wealth. Despite income stagnation outside the circle of high earners, median family wealth grew from $83,000 in 1992 to $97,000 in 2016 (in 2016 dollars).
Beyond the overall growth in top-line numbers, however, the growth in household wealth (defined as net worth—the net value of each family’s liquid and illiquid assets and debts) has not been inclusive. In wealth, black individuals, families, and communities tend to lag behind their white counterparts. Indeed, the median white family had more than ten times the wealth of the median black family in 2016. In fact, the racial wealth gap between black and white families grew from about $100,000 in 1992 to $154,000 in 2016, in part because white families gained significantly more wealth (with the median increasing by $54,000), while median wealth for black families did not grow at all in real terms over that period.
The widening racial wealth gap disadvantages black families, individuals, and communities and limits black citizens’ economic power and prospects, and the effects are cyclical. Such a gap contributes to intergenerational economic precariousness: almost 70 percent of middle-class black children are likely to fall out of the middle class as adults. Other than its obvious negative impact on human development for black individuals and communities, the racial wealth gap also constrains the US economy as a whole. It is estimated that its dampening effect on consumption and investment will cost the US economy between $1 trillion and $1.5 trillion between 2019 and 2028—4 to 6 percent of the projected GDP in 2028. more>
Posted in Business, CONGRESS WATCH, Economic development, Economy, Education, History, How to, Net
Tagged Business improvement, Capital, Jobs, McKinsey, Racial equality, Skills
By Nancy Gibbs – Our nation is not healthy enough to handle this much pain. A cascade of crises has brought us to our knees and to the streets: a pandemic that locked us down and ravaged the population, especially communities of color; an economic convulsion that flattened small businesses and hurled 40 million people out of work; and the three horrific killings of unarmed black Americans during this spring of despair.
What will it take to end the pain, to stand up again together? Let’s start with accountability — an end to the impunity that defines our age.
The 21st century has been generous beyond belief to those who came to the table already set up for success. I count myself among them. We can shelter in place, take a hit to our routines and even our savings, and expect to recover. The pandemic has exposed how willing we as a nation are to send disproportionately black and brown “essential” workers out to do their jobs whether or not it is safe.
It has exposed the breathtaking speed with which our leaders will write trillion-dollar checks to protect corporate interests and shield financial markets. And it revealed the willingness of rich and comfortable companies to take as much as they can get. more>
Posted in Banking, Broadband, Business, Economic development, Economy, Education, Healthcare, History, How to, Science, Technology
Tagged Business improvement, Capital, Congress Watch, Health, Internet, Jobs, Pandemic, Racial equality
Personalizing change management in the smartphone era
By Alexander DiLeonardo, David Mendelsohn, Nikil Selvam, and Alexandra Wood – CEOs know that making organizational change stick requires convincing big groups of geographically dispersed people to think, act, and approach their work differently. And this is devilishly hard, as human beings are motivated by many things, have different fears and aspirations, feel varying levels of empowerment and commitment, and tend to be reluctant to change in the first place. Undifferentiated approaches that don’t carefully consider employees’ mindsets will fall flat and may even breed cynicism that saps morale and undermines progress.
The good news is that when it comes to personalization, senior executives have plenty of inspiration, courtesy of analytical pioneers such as Instagram, Netflix, and Spotify, all adept at tailoring products to meet individualized preferences via apps and other easy-to-use digital platforms. A large global manufacturer’s ongoing experiment in tech-infused mass personalization shows how this thinking can be applied to organizational change. The company’s experience suggests how smart combinations of digital technology, analytics, and behavioral science can make change more inclusive and persuasive—and help employees unleash their enthusiasm in ways not possible otherwise. The key is to use the available tools to better understand people and meet them where they are—a guiding principle that’s equally relevant for implementing long-term change and for leading a remote workforce through the current disruptions caused by the COVID-19 pandemic.
For a few years, the manufacturer had tried with limited success to implement cultural changes across a key region’s 7,000-strong workforce—for example, by promoting behaviors it hoped would break down silos, empower and motivate frontline workers, and bolster performance. Now the CEO wanted a fresh start. An assessment highlighted places where the company’s organizational health was poor or needed strengthening. From these areas, senior leaders focused on three management practices: operational discipline, inspirational forms of leadership, and the use of rewards and recognition to better motivate employees.
The company then formed a team to translate these broad cultural goals into specific mindsets and behaviors that would both generate the desired organizational outcomes and also help employees better understand how they personally contributed to the improvement. For example, the manufacturer wanted employees to think of operational discipline as everyone’s job. One tangible way to promote this would be to encourage shop-floor operators and supervisors to consciously review the company’s “golden rules of safety” before every shift. Likewise, the company sought to instill a mindset of valuing continuous improvement and celebrating small victories. One way of doing this would be to encourage people to speak up immediately when they saw a colleague do something positive (a motivational take on the mantra “if you see something, say something”).
The team now had a discrete set of behaviors they wanted to encourage. But they knew that to do so effectively, they needed to meet people where they were—they couldn’t simply tell people to change. The team needed to address any mindsets or beliefs that could act as barriers. more>
Posted in Book review, Business, Economic development, Economy, Education, How to, Net, Science, Technology
Tagged Business improvement, Change management, Internet, Jobs, McKinsey, Skills, Smartphones