Lockdowns Spawn New Business Models – A New Era in Work and Trade is Upon Us
Both regular workers and management theorists have been wondering what work, shopping and consumption will be like once the lockdowns are lifted. Will our recent experience alter work practices and shopping habits for good? Will new business models emerge?
It has not been difficult of late to come across extreme views on remote work. I have seen home office enthusiasts who consider the events of recent weeks as confirmation of what futurists have been talking about for years: that working from home, or any other place for that matter, should not be a privilege reserved for the select few. In the day and age of readily accessible digital tools, everyone should be entitled to work wherever they want. Why stress and waste energy during your daily commutes? You can use the time much better for the benefit of your company: you can get to work earlier, get off sooner, and enjoy greater psychological comfort, they argue. It is just as easy though to come across diametrically opposed views. According to their proponents, the pandemic has demonstrated that mixing work and personal life has the potential to ruin both. You cannot live comfortably and rest well if you turn your bedroom into an office. Neither can you do a good job in your pajamas: corporate culture and etiquette are there for a reason and you can’t undo them overnight.
Let us put these extremes aside for a moment and briefly go over the lessons we’ve learned on work communications and work management during these months of using teleconferencing tools and working from our bedrooms.
Remote work: an invasion of personal space
I will start by quoting Jeremy Bailenson, a psychologist and researcher of remote work and communication. I think that anyone who has recently been forced to participate in a good number of video conferences will agree with some of his illuminating insights. According to Bailenson, video conferencing is unnatural and will drain your energy in the long run. How much time can you spend talking to your co-workers and staring into their eyes? You would never do this in a real-life office setting. It would be crazy to stare at someone in a face-to-face conversation in this manner. Paradoxically, conversing via cameras is an unnatural way of being near other people and an invasion of their personal space. On company premises, we hardly ever come so close face-to-face to a colleague. The experience is bound to induce stress.
What happens to creative energy?
It is also hard to deny that video conferencing is a damper on spontaneity and ideas that can only arise in the presence of other people. Video conferencing makes us control our impulses and watch the order in which we interact and speak. Such control may be necessary, but it can also be stifling. The camera is perfectly suited for reporting events, presenting rundowns, and assigning tasks. Much less so for spontaneous brainstorming. Perhaps we’ve never even realized the essential importance of seemingly irrelevant gestures, casual meetings at a coffee machine, and off-the-cuff digressions for what can be dubbed the shared work experience. It turns out that, although cursed by many, open plan office actually makes sense. It enables the flow of elusive creative energies that is so vital for the company. This flow is severely restricted in the space in front of cameras.
Lesson for leaders
We are all social animals that rely on non-verbal micro-expressions to communicate. Such expressions are severely weakened when interacting over digital media. Remote work limits our ability to make good impressions, which requires a variety of gestures, body language and non-verbal signals. This poses a difficult challenge for leaders and mentoring session moderators, whose attractiveness and effectiveness is based on the leader’s mental and physical charisma, among other things. However, arousing enthusiasm in workers and encouraging them to embark on new projects becomes all the more difficult when talking through a little window on our display. And yet, the leaders who like to discover their workers’ potential find the new system that has been forced upon them to be an opportunity to strengthen trust in relationships. Workers in that system gain greater freedom but also find themselves responsible for organizing their work. The experience can be valuable and positive for both the supervisors and their subordinates. More trust can also be gained if leaders momentarily step away from their day-to-day duties and change their pace of work. In many cases, doing so is an opportunity to take a better look at the workers, hear their opinions, and re-examine the company’s affairs.
New safety procedures
As we ponder about the pros and cons of remote work, we must not ignore security. Home workers have come to use office equipment for non-professional interactions quite often now. As a result, they may end up disclosing company resources – documents and data – to unauthorized third parties. For work security experts, redesigning work may entail spending extra hours developing new procedures and safeguards. Remote workers may be forced to use multiple distributed IT systems that have previously been accessed from office. This may require major changes in log-in procedures and authorizing employees to edit company documents directly from home. Much has been said about security in connection with the highly popular video conferencing platform Zoom. In time, the company was compelled to add extra protections against security breaches and user account hacking. What happened with Zoom may be relevant to other new platforms that experience a sudden surge in popularity.
Offices becoming a luxury
If the new trend continues, it may reshape market supply and demand. Companies will streamline their office space and cut costs not to waste money paying for empty premises. It is possible that in time, key employees and managers will be the only ones left working in company offices. Being “off to the office” may change its meaning to indicate being high on the totem pole. Company premises may transform from places of work to boosters of company image and status symbols. They can also accommodate conferences and special events. Meanwhile, co-working spaces may be high in demand, no longer the exclusive domain of start-ups.
Automation, loyal customers and social solidarity
As rapid changes continue, headway will certainly be made in automation. Much discussed in recent years, automation has now found fertile ground for growth. To keep their employees working from home, companies may be forced to automate operations extensively. Neither algorithms nor robots will ever take sick leave. And they can do wonders for logistics, customer service, marketing, shipping and all other areas previously operated by multiple people gathered together in a common space.
However, it’s not only about automation. Recent developments may consolidate all new business models. A flavor of that could be tasted in recent weeks as struggling restaurants became retailers that offered deliveries of food and other products to the customer’s doorstep. In an interesting trend, loyal customers would band together to crowdfund failing establishments. Although loyal customers are nothing new, the term has acquired the new meaning of people who keep companies afloat. Food establishments, beauty parlors, and retailers could end up being run like a cooperative, made up largely of some of their loyal customers. The crisis has shown how indispensable but also vulnerable the businesses that make our streets normal really are. We want them to stick around and continue to serve us.
The system needs workers
Jeff Bezos’ company has benefited greatly from the pandemic. His Amazon has been delivering much more than music and books to our homes around the world. Its customers would buy over-the-counter medicines, cosmetics and, for the first time ever, groceries. In effect, the behemoth rescued us, ensuring we would never run out of supplies. However, the resulting image boost would never be possible without the sacrifice of hundreds of thousands of workers who, just like our doctors, ended up on the front line. The most pressing problems of healthcare systems, i.e. paying its workers, or no strangers to giants like Amazon. While they benefit us enormously, the working conditions they offer leave much to be desired. The spirit of social solidarity that was sparked by the pandemic has helped doctors, salespeople, warehouse attendants, couriers, restaurateurs and artists survive both mentally and economically. All these people turned out to be system critical. Will this realization change the policies of giants such as Amazon and sway them to improve their employment models? Will such companies be legally obligated to share their capital with their workers who – as it turns out – greatly contribute to society even if they only run a small café?
Development of customer services
Food producers, restauranteurs and retailers find it very difficult to move a big part of their business online on a moment’s notice. Suddenly they also have to cater to a new segment of online customers, i.e. older people who buy basic goods and are less computer savvy. To make this work, they need extensive marketing and new user experience strategies. They must invest heavily in shopping convenience, and especially in chatbots, virtual assistants and virtual dressing rooms. The e-commerce industry needs bigger servers and more efficient logistic systems for home deliveries.
Good times for e-commerce
The companies that have adopted dual off- and online sales models need to think twice about the financial sensibility of maintaining store space and the high overhead that comes with it. Home deliveries and large e-commerce platforms such as Alibaba and Amazon, as well as Allegro and Empik in Poland, appear to be bound to flourish. Due to the health risks involved and gloomy employment prospects, many consumers have chosen to relinquish reckless compulsive buying and aimlessly hanging out in shopping malls for the fun of it. According to eMarketer, 75% of the consumers who have already been shopping online in the United States are determined to steer clear of shopping centers. In the first week after reopening, malls reported that their customer traffic was at 55-60 percent of pre-pandemic levels. The return to the usual 100% will most likely take a while.
Not all stores are doomed to disappear from our cities. A likely scenario is that of a “rebound” as we are going to miss the in-store shopping experience. However, the frequency of our visits and the level of our emotions will never again be the same. Shopping safety will have to come first. Any traditional establishment that will want its customers to return will have to invest in safety and sanitation. Store owners will need to set up automated touchless retail systems. While unmanned restaurants and stores have thus far been marginal, their future looks a whole lot brighter.
The upcoming changes will be global in scope and sufficiently profound to produce a new quality. These trends are unprecedented. It is likely that many of our views on the role of work and consumption in our lives will become irrelevant. The changes described here are the ones I think are the most likely to happen. However, I have a feeling that the implications of Covid-19 could be even farther-reaching. They are sure to be interesting although hopefully not terribly dangerous.