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The future of business in the new normal

Without a playbook for thriving and surviving through an unprecedented crisis, business leaders are faced with many questions about how to comport themselves to ensure that their organizations survive.

Linda A. Hill, cofounder of business consultancy Paradox Strategy, has been observing and advising a vast network of global business leaders over the past few months. As a professor at Harvard Business School, head of the school’s Leadership Initiative, and coauthor of Collective Genius: The Art and Practice of Leading Innovation, she has much wisdom to share. We talked with Hill about what she has learned so far during the pandemic, and what she predicts through 2021 and into 2022.

Gathering data

When discussing the effects of COVID-19 at a high level, Hill is quick to quote a trusted advisor, president of the Ford Foundation, Darren Walker, who states that we are dealing with “three colliding pandemics” in public health, the economy, and society. This confluence creates a complex set of ever-evolving circumstances that leaders are struggling to make sense of in order to make data-informed decisions. In the words of the CEO of the Cleveland Clinic Abu Dhabi, Dr. Rakesh Suri, leaders must think about “how they can build an agile organization within which everyone is prepared to be an innovative problem-solver.”

This is where sophisticated modeling and data-visualization technology come into play, Hill observes. The most advanced organizations are taking public data platforms like the Johns Hopkins COVID-19 map and combining that information with their own proprietary data in real time to make bespoke data-backed decisions.

And while business leaders and their teams are leveraging data gathered via technology to understand what’s going on, they’re also relying on the original data source—word of mouth.

“Leaders with global operations are increasingly turning to conversations with their staff overseas to better understand what’s going on,” says Hill. She points to one U.S. pharmaceutical company she works with that was able to prepare for the crisis sooner because many of its managers had family in the regions first affected in China.

In the end, leaders have to compile proprietary data, public information, and informal news from in-person conversations to shape the many difficult decisions ahead, she advises.      

Leading with morality

Most business leaders will have to make difficult choices about the future of their company as we learn about the behavior of this unprecedented virus—such as how exactly the virus spreads, the mortality rates of different populations, and the effectiveness of various treatments.

Because so much is still unknown, and business plans and budgets are out the window, Hill says that it is fundamentally difficult to make predictions and plan for the future right now. As such, for any given company, even if it is growing, risk management has to be at the heart of any strategic planning efforts. To make crucial decisions in our present circumstances, Hill feels that leaders must act with what she calls “moral imagination and courage.”      

“There’s no such thing as overreacting when the stakes are so high and the consequences of inaction are so dire,” she says. “You have to act courageously to protect as many of your employees and customers as possible and ensure your company’s survival. Maybe that means carrying more inventory, investing your resources to help suppliers stay afloat, accelerating the adoption of emerging technologies, or shepherding a major strategic pivot. You have to be ready to be unpopular, if it means mitigating what you understand to be critical risks.”

Leaders of companies that employ large numbers of essential workers—who risk their health and that of their families by coming to work—are grappling with moral dilemmas they could never have imagined. One leader in Latin America described how a third of his workforce had come down with COVID-19 despite their efforts to follow public health guidance, leading him to wonder whether it was right for him to expect his minimum-wage employees to come to work.

An increased moral sensibility among business leaders is also informing how companies connect with customers. “This isn’t the time to sell,” Hill says. “It’s a time to understand what your customers are going through.”

As the pandemic has progressed, many companies are engaging up close and personal with customers. This is not the time for customer surveys—it is time to engage in conversations with them and learn about their evolving needs, with an eye toward getting them through the crisis and thriving in the new normal. For some, that has meant offering new online experiences, or adjusting business as usual to accommodate new and evolving ideas of personal safety. For others, it has meant acquisitions to get the new capabilities necessary to meet current customer expectations. Regardless, to get customers to return, companies have to meet people where they are, in ways that they’re comfortable with.

Trying new approaches

Some leaders have adapted better than others, and Hill says that they have a few things in common. “They’re not trying to take control and steer the ship, because they have to admit they don’t have the answers,” she says. “They start by managing themselves, taking care of themselves, so they can be present to support and collaborate with their customers and teams to co-create the future.”

They are also reaching out to their networks of suppliers, clients, and government partners—even to people or groups ordinarily thought of as competitors. And while unorthodox, these conversations can offer up new insights and resources that can help leaders hone their vision, Hill says. “I’m seeing partnerships among competitors that are really innovative.”

One such example is a consortium of Boston-area biotech companies that decided to keep its labs open during the lockdown this spring. Despite the winner-take-all global patent system in biotech, the companies came together to create a COVID-testing facility for all of their employees—some of whom were direct competitors.

“I’m seeing leaders with bigger ambitions than just the success of their own companies,” Hill explains. “They’re dealing with the crisis, but also looking for ways to make a positive impact on the future, the country, and the world as a whole.”

Looking ahead in an uncertain moment

Hill has seen some consensus begin to develop about what to expect in the months to come. Here are her predictions:

1. The coronavirus will be a major factor in daily life for at least another 12 to 18 months, perhaps into the first quarter of 2022, by which time most people believe a vaccine will be widely available. The present state of business—with widespread working from home and limited capacity in retail stores, restaurants, and public places—will continue for at least another year. 

2. As revenues fall for a great many businesses, there will be more layoffs. Things could be especially difficult for small and midsize businesses over the coming months. “They may not have the resources to ride this out,” she says.

3. For growing companies, the work-from-home trend is creating significant challenges, such as how to onboard people virtually and instill in them the sense of shared purpose and culture required for collaboration. Cracks are beginning to show in the remote-work story, and it’s a sign that working from home may not be a long-term magic bullet. People are also getting burnt out because they are “living at work” and miss the social support that comes from face-to-face interactions.

4. On the other hand, increased reliance on teleconferencing software has leveled the playing field for many remote employees around the world and given them a new voice. This could ultimately result in a more geographically diverse talent pool within global companies. But on the flip side, there are also people who don’t have access to the technology or personal space required for remote work, which widens the gap of opportunity.

Each of these challenges, in any other time, would be noteworthy. Taken together, they represent a sea change for businesses. “As things unfold in the coming months, leaders will need to stay flexible. They—we all—have to act and be ready to pivot based on what happens,” says Hill. “This is not a sprint, it’s a marathon. So even if one leader has gotten a good start, it’s still unclear who will emerge victorious.”