Reset, all change
Tuesday, 31 March 2020
We are all wondering what life and business will be like once the lockdown is over. Nothing will be the same, that’s for certain.
By Muhammad Seedat, Chairman: Institute of Directors in South Africa
War is being increasingly used as a metaphor for the fight against COVID-19, and it’s probably a good one. We should not forget that wars cause often unexpected changes that last after they are over. In a real sense, we are still coming to terms with the changes caused by World War II.
In short, we face the prospect of widespread changes we cannot yet foresee. It is a somewhat scary scenario, but it is also a tremendous opportunity to reinvent ourselves, our businesses and our society. While making predictions is risky, there are some big issues that we should already be considering:
Digital to the fore. Businesses that have paid more than lip service to digitalisation have found themselves in a significantly stronger position than those who did not. We can expect virtually all businesses to be taking digitalisation more seriously in the future.
To be successful, digitalisation needs to go beyond just moving existing business processes and ways of doing things online. The real benefits come when organisations seize the opportunity to rethink how they do things, to make the new digitalised processes better and more streamlined, and even to re-imagine the organisation’s strategy.
The digital divide needs to be bridged. It’s been an issue forever, but this crisis shows we have to overcome the digital divide as a matter of urgency. The drop in data prices that virtually coincided with the crisis was fortunate, but the question of devices is also pressing. A serious effort to bridge the digital divide in South Africa provides a real opportunity to make inroads into our high unemployment rate, especially among youth, by opening up opportunities in the gig economy while also providing the means to acquire the necessary skills.
New habits will be created. The enforced lockdown and the reliance on digital channels are likely to challenge established ways of doing things, with unforeseeable consequences. Consider, for example, parents who see their children accessing better teaching online than they can at local schools may consider different schooling models more readily—a huge opportunity for educational entrepreneurs with a big impact on the established but often dysfunctional educational sector. People who have begun shopping online may continue to do so at least some of the time, perhaps hastening the decline of the traditional high street and even the mall. Will we go back to eating out or going to the movies with the same frequency that we used to? Will companies demand as much office space as they do now? It’s likely that we will rethink business travel and how meetings are conducted substantially.
The key point here is that we have all been forced to change the way we are used to doing things, and some of us will not go back to the old ways. This could be the nail in the coffin for many businesses that have already been struggling—and the open sesame for new ones.
Priorities and goals will change. At a personal level, we are all likely to be reassessing the way we live our lives. A big impact will be the amount of debt we are willing to take on—people with lots of debt are suffering much more than their more frugal compatriots. This will in turn have an impact on our growth-hungry economies. Business will be making the same sort of reassessment. It could lead to a greater caution in investing funds in new plant, for example, particularly as we are likely to emerge into a recession. Alternatively, one could argue that building local plant could seem like a really smart move to derisk global supply chains.
Business’s social role will grow. For once, business is taking a leading role in South Africa’s fight against COVID-19, in partnership with government. We can hope not only that this partnership between the public and private sectors will strengthen, and provide the blueprint for tackling the other major issues we face. At the same time, we can expect to see business and its employees taking social responsibility more seriously, and the triple bottom line becoming a true measure of value.
The detail of the changes are ultimately imponderable, but one thing is for sure: Everything is in line to be reset. As Victor Frankel, the Holocaust survivor put it, “When we are no longer able to change a situation, we are challenged to change ourselves”.