The Panic: "Everybody has a plan until they get punched in the mouth." Mike Tyson

In February 2020, Covid 19 punched the economy in the mouth, turning the best economy in the last decade, into the worst downturn since the Great Depression. This drastic downturn caused most companies to rapidly contract their operations.  

Eleven months later, the virus’ detrimental impact on the economy has not lessened.  But the period of panic has passed. And while the “next normal” work environment hasn’t been defined; it will be significantly different than the old normal. With this realization, organizations are faced with a binary choice:

  1. Try to perform work like it was done pre-pandemic or
  2. Prepare for post- pandemic growth by transforming how the organization meet the needs of their employees who perform the work and generate organizational success.

The Possibility: "Never let a good crisis go to waste." Saul Alinsky

The pandemic creates a unique opportunity for leaders to challenge the assumptions of how work is performed, to determine if those assumptions continue to meet the needs of the organization and its employees. 

If those assumptions are outdated, then how work is being done must be replaced with how work should be performed for the mutual benefit of the organization and its employees. Then the organization must make a significant commitment to dedicating the time, energy and resources needed to create and implement those new approaches. The economic justification for a transformation about how work is performed is supported by the research done after the 2008 Great Recession.  

The 9% of organizations that reacted to the 2008 Great Recession by transforming how work was done, outperformed their competitors by at least 10% in sales and profits growth during the three years following the recession (https://hbr.org/2010/03/roaring-out-of-recession). Additional analysis by Bain (https://www.bain.com/insights/beyond-the-downturn-recession-strategies-to-take-the-lead/) and a study by McKinsey (https://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/bubbles-pop-downturns-stop) confirmed these results.

Seventeen percent of the organizations that did not take the steps necessary to strategically restructure to meet the realities of a new work environment went bankrupt, were acquired, and 80% had not regained their pre-recession growth rates for sales and profits 3 years after the recession.

A Proposed Work Transformation Plan: Based on my experience assisting organizations to re-structure after the 2008 Great Recession, here is a plan for organizations to transform how work is performed and be prepared to thrive in the post-pandemic marketplace: 

  1. Operational Efficiencies, Selective Layoffs and Investing in Employee Development: Organizations relying solely on reducing their workforce to survive the business downturn have only an 11% probability of achieving post-pandemic breakaway performance. Organizations that reduce their work force significantly less than their competition, improve operational efficiencies to reduce operating costs, and invest in developing their employees, have a 35% probability of achieving post-pandemic breakaway performance. 
  • Find Operational Efficiencies requires an exhaustive examination of every process, policy, practice and rule to determine if the status quo is still providing the most effective and efficient way to deliver the relevant outcome. To be successful, this examination must be must include those impacted by or required to use the process, policy, practice or rule.  

Suggestion: Start this strategic mindset approach by reading Tesla’s Employee Handbook. https://www.scribd.com/document/446927426/Tesla-Anti-HandbookHandbook#from_embed?campaign=SkimbitLtd&ad_group=35871X943606X58474f322b4f13448290bc6747de8c72&keyword=660149026&source=hp_affiliate&medium=affiliate

  • Selective Layoffs focus on recognizing and retaining the company’s talent, while eliminating the Bad Hires and The Walking Dead at all levels of the organization and from every work team.  Since only 18% of Team Leaders demonstrate a high level of talent for managing others Selective Layoffs need to include Team Leaders at every level (https://www.gallup.com/workplace/231593/why-great-managers-rare.aspx).  Suggestion: In most organizations this eliminates 20% of the work force.
  • Continuous Skill Set Development for Core Employees: Pre-pandemic, 64% of HR Leaders saw a skills gap in their company and 42% said the skills gap made their organization less efficient. Organizations that address existing skill gaps by reskilling and upskilling their Core Employees – 20% of the workforce who are actively engaged and committed to the growth of the organization - will be better positioned then their competition to succeed in the post-pandemic business environment. Suggestion: This is the opportunity to find Core employees talented enough to be leaders of high-performance work teams and train them for this role.  (https://edservices.wiley.com/closing-the-skills-gap-report-2019/),

 

  1. Decentralize Decision Making: Many organizations reacted to the pandemic by increasing centralized decision making.  However, firms that delegate decision making to Front Line Leaders, who can more quickly and effectively identify/fix problems and recognize and take advantage of opportunities provided by rapidly changing conditions outperform their more centralized peers by 20 to 25%.  

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2961079.

 

  1. Improve the Employee Experience: Only 17% of the 1,000 employees surveyed gave their company an exceptional rating for the Employee Experience (EX) (https://www.topia.com/adapt-survey-report-2020/). By not having an EX that meets the needs of Core Employees, organizations risk their disengagement now and the loss of their most talented team members post-pandemic.

To improve the EX, organizations need to focus on

  • Autonomy: 63% of employees in the Topia survey define a great EX as being empowered and trusted to do their job with little supervision. Suggestions: Begin the process of creating Self-Directed Work Teams and Decentralizing Decision Making.
  • Work Flexibility: The pandemic has proven that WFH works for the organization with increased productivity and for employees with increased job satisfaction. The 40% of employees whose jobs can be performed from home – knowledge workers – should be given the opportunity to continue to Work From Home (WFH). (https://www.pwc.com/us/en/library/covid-19/us-remote-work-survey.html). Suggestion:  Provide a WFH stipend to improve the WFH experience.      

Organizations need to institute nontraditional work schedules to address the needs of essential workers - the 60% of the workforce who can’t WFH. Suggestion: Use customized work schedules; job crafting; rotating shifts; night work; flextime; compressed work schedules.

There will be a Next Normal

Rather than wait and be forced to restructure how work is performed, leaders need to recognize the opportunity for growth and positive change the pandemic has presented and, for the mutual benefit of the organization and its employees, voluntarily create the “next normal”, based how work should be performed.