It was interesting to see how predictions from JPMorgan Chase CEO Jamie Dimon went viral recently. In an annual statement to shareholders, Dimon claimed that the US is heading into "a bad recession combined with some kind of financial stress similar to the global financial crisis of 2008." Everyone was thinking it, Dimon just happened to say it.
It's worth noting however, this was the man that two years ago claimed he does not view a recession as a bad thing. "It's bad for America. It's bad if you are unemployed but it's usually an opportunity for JP Morgan," he said. This probably didn't win him too many friends but if his recent predictions are right and we are heading into an economic trough that makes the credit crunch look like a minor inconvenience, then there needs to be significant change.
Some companies will feel they have been here before but for many, this will be a new experience. Not everyone will remember the dotcom crash or felt the force of the global financial crisis in 2008 but in the months that followed the demise of Lehmann Brothers, in the UK alone, approximately 27,000 businesses went to the wall.
Economists and commentators like Dimon are expecting much worse. So, what can businesses do about it? Where should they focus energies now and post-pandemic, to ease the pain and feed recovery?
According to McKinsey's Leadership in a crisis article, recognising that your organisation is facing a crisis is a necessary first step. The article goes on to offer other advice about leadership and the need to rethink decision making processes.
"To promote rapid problem solving and execution under high-stress, chaotic conditions, leaders can organize a network of teams," it says. "Although the network of teams is a widely known construct, it is worth highlighting because relatively few companies have experience in implementing one."
For more specific ideas on how to build a network of teams, McKinsey has released a new article, To weather a crisis…, which is worth a visit.
So, what do other experts think? Should organisations speed-up plans to automate, increase cloud adoption, strip away hardware costs or plough on with digital transformation?
Accelerate automation
One aspect of the Covid-19 lockdowns has been the rapid shift to working from home but this does not work for all industries. Manufacturing, for example, demands factory environments, so will we see increased automation in the next 12 months and how will this impact the workforce and business continuity? We will almost certainly see increased adoption of AI bots and agents and the deployment of Robotic Process Automation (RPA) in factories.
"The Covid-19 pandemic has accelerated the adoption of automation across sectors by forcing even risk-adverse industries like healthcare to invest in AI solutions that can overcome supply chain barriers or fill labour gaps," says Faisal Abbasi, IPsoft's UK and Ireland MD. "I'm confident that after this pandemic, businesses are going to emerge more resilient and digitally clued-up than ever before."
Abbasi suggests that the rapid change in how a lot of people work could also lead to a shift in perception of automation.
"I predict that the fear of automation taking jobs will start to dissipate," he says. "As the public sees how AI-powered digital employees are helping the Covid-19 effort - whether that's directly helping patients through symptom screening, or in helping businesses maintain vital operations, such as customer service call centres - they will begin to understand how cognitive technology can support them both as consumers and in the workplace."
According to Dan Bieler, an analyst at Forrester, the level of automation post-pandemic will really come down to who you are talking to, certainly in geographic terms. In the US and parts of Asia, for example, automation is already being used significantly in factories and this will only accelerate post-Covid-19.
"The situation in Europe is quite different," he says. "The tone is quite different, because the expectation is that businesses that received a state subsidy, like the big manufacturing companies, need to protect jobs, especially after receiving Government funds during the crisis."
This, adds Bieler, will lead to increased automation but alongside employees, helping them to facilitate certain processes, "to improve productivity but not to automate away certain positions."
Cloud and digital transformation will spread
A recent report from DivvyCloud entitled 2020 State of Enterprise Cloud Adoption and Security, suggests that most enterprises (85%) believe embracing the public cloud is critical for innovation. Post-Covid you would expect this figure to rise. Cloud computing has been one of the few positives to take out of the pandemic crisis.
"Access to cloud-based solutions has been very helpful in maintaining a flexible dynamic workforce," says Bieler from Forrester. "I would assume there will be an even greater momentum in the next few months, if not years, towards bringing applications into a cloud environment, as it provides flexibility and scalability."
That's certainly the thinking of Selina Yuan, president of international business at Alibaba Cloud Intelligence.
"Enterprises now feel the sense of urgency of quickening their cloud adoption, in order to integrate their online and offline businesses, so that pandemics like COVID-19 will not halt their operations completely," she says.
"In such crises, business should rethink how they can leverage cloud computing technologies to connect their customers and workers remotely, timely and safely. Migrating critical business applications to the cloud does not only help reduce operational risks, but also lowers infrastructure costs. The flexible, scalable and secure nature of cloud technologies are the essential elements for business to survive and even thrive in uncertainty."
Chris Murphy, CEO at software consultancy ThoughtWorks North America believes that organisations which weren't caught flat-footed when the COVID19 crisis began, were those that had already invested in digital resiliency, tolerance and adaptability. There is a lesson here for post-pandemic recovery.
"Organizations that have modernized core business applications on public cloud platforms like AWS, GCP, and Azure are able to rapidly spool up and scale not only new capabilities, but also existing foundational capabilities under new constraints and radically increased loads with customer demand," says Murphy. "Companies who endure under extreme constraints such as the present are essentially stress testing their core infrastructure and capabilities which will lead to evolvability and adaptation to the new world, post COVID-19. We expect companies that were slow or not taking the shift to digital seriously, to move with a new post-Covid urgency."
Data vision will drive recovery
According to Michael O'Connell, Chief Analytics Officer at TIBCO Software, the companies that are doing better through this pandemic are those that have already modernised their core infrastructure and integrated systems so they can turn their data assets into actionable insights.
"They're built to be adaptive and can react to anything the world throws at them," he says, "from start-ups threatening market share, or rivals changing business models, to macroeconomic events and, as we have seen, even a broader global phenomenon such as a pandemic."
But even if your company isn't currently the most flexible, O'Connell says you need to look at ways to increase automation and self-service tactics to make employees more flexible. For example, through greater use of cloud, mobile and platforms that can react to where you are and what you need to do, regardless of the device or platform you're using.
"More than anything, rely on data to inform your decisions: while this is an emotional time, your actions need to be based on hard evidence," adds O'Connell.
It's the sort of sentiment behind Rolls Royce's data science alliance, combining data from a number of different industries to try and find new, faster ways of supporting businesses and governments globally as they recover from the economic impacts of COVID-19.
"We want the global economy to get better as soon as possible so people can get back to work," says Caroline Gorski, Global Director, R2 Data Labs, the Rolls-Royce data innovation catalyst which started the alliance. "Our data innovation community can help do this and is at its best when it comes together for the common good. People, businesses and governments around the world have changed the way they spend, move, communicate and travel because of COVID-19 and we can use that insight, along with other data, to provide the basis for identifying what new insights and trends may emerge that signify the world's adjustment to a ‘new normal' after the pandemic."
The future of work
"Post-pandemic, we will see a complete overhaul in attitudes and approaches to the workplace," says Abbasi at IPsoft. "Having witnessed the power of technology to enable millions of people all over the world to switch to working from home, employees will have more appetite for flexibility and will look to intelligent solutions to help automate routine, low-value tasks that keep them tied to their desks. This will not only change the nature of our jobs, but also give us more freedom in how we work, who we work with (both digital and human colleagues), where we work from - and may even help us take the first steps towards a four-day working week."
It's a bold view. But as a Gartner study of HR managers revealed recently, remote working is expected to increase post-pandemic. This will bring new challenges both in terms of technology and security but also individual attitudes to work.
Tom Cheesewright, futurologist and author of Future-Proof Your Business, says the tech bit is arguably the easy part.
"The fact that tens of thousands of dance teachers, yoga instructors, and families have suddenly learned how to keep things going via video link tells you that bigger businesses should be able to get a handle on it," he says. "Of course, in a corporate environment there are greater complexities over security and reliability. But fundamentally it's a question of adoption not invention."
It's a great point and Cheesewright adds that perhaps the much harder question is one of culture.
"You don't extract maximum value from remote or flexible workers by trying to extend office behaviours into the home environment," he says. "More importantly, you also don't offset the negatives of being isolated from your colleagues with benefits for those workers that make their roles more rewarding. If you really want to make the technology investments pay in a post-pandemic world then you need to fundamentally rethink your culture of work. People need autonomy and responsibility. They need to be focused on delivery, not effort, outcomes not outputs. Very few companies have addressed this yet."
According to Matt Middleton-Leal, general manager EMEA & APAC at security firm Netwrix, the main issues will be around staff motivation, guidance and governance but there are also important tech challenges than need addressing.
"A significant challenge is the fact that many organisations still operate with legacy systems that were never designed for enabling remote access, or supporting new technologies such as IoT devices and therefore may be a long way off being suitable for remote teams," he says. "Added to which, staff being allowed to use their own personal devices to access corporate networks and data presents a very real security risk, which could well be compounded if this practice is continued post-pandemic."
5G and fibre - connectivity for all
Covid-19 has certainly challenged thinking on infrastructure. While governments continue to invest heavily in transport links (the UK for example has given the green light for work to start on its HS2 rail link project despite the lockdown and considerable costs, estimated at £100bn), digital infrastructure has come to the forefront. As Mark Chillingworth writes, "we must ensure that Coronavirus brings about an outbreak of realistic infrastructure building," to connect essential workers but also reduce strain on transport networks, stress on the workforce and fixed, office overheads.
Bieler at Forrester says that the crisis has demonstrated that many businesses can actually operate pretty well with a widely distributed workforce, working virtually together, via all sorts of different platforms, and therefore a key technology is connectivity.
"I saw a few stories that governments are pressing the telcos to speed up their 5G rollout, to ensure that broadband coverage is more widely available," says Bieler. "Interestingly though, fixed line voice minutes have gone up by 50 percent and fixed line broadband connectivity has gone up by roughly 40-45 percent. This could mean that the need for fibre will be strengthened and calls for greater digital infrastructure to enable home working will be reinforced, as workers will need good connectivity to access tools such as Salesforce or WebEx."