Episode #86:
THE SILVER LINING ON THE PANDEMIC

Long term positives from COVID-19

Although we are still in lockdown mode in many parts of the world to stem the tide of the COVID-19 pandemic, we can start to look at the long term benefits that we are likely to see when we come through the other side.

Indisputably, there is incredible pain for some, uncertainty for others, and for all of us, a change in how we view our world. But, eventually, we’ll emerge better for the experience (as humans have done over centuries). 

It’s now fast approaching the time when leaders should think about doing what they have signed up to do - to accept the cold hard facts for what they are, and work out how to take people beyond that, calmly and confidently, so that value emerges from this crisis.

Episode #86 transcript

Hey there, and welcome to Episode #86 of the No Bullsh!t Leadership podcast. This week's episode, "The Silver Lining on the Pandemic: Long term Positives from COVID-19". Today is a really simple episode. I want to give you 10 things that I think will be long term benefits from the COVID-19 pandemic, and this is by no means an exhaustive list. Indisputably, there is incredible pain for some, uncertainty for others and for all of us, a change in how we view our world. 

But we will emerge eventually better for the experience, as humans have done over centuries. There's always plenty of doom and gloom to immerse yourselves in each day -just turn on the TV news - but although no one really has much hope at this stage of predicting the long term impacts, we will certainly have some reasons to be positive. When I talk about the positives, I'm not being naive. Those of you who know me well, would realise that I'm a believer in an approach called optimistic pragmatism. Although I don't want to downplay the very real risks that face every economy and most industries, we will have quite a few reasons to be grateful for this black swan event in the coming years and decades.

Before we start, I want to send my heartfelt thoughts and wishes to the people most impacted by this crisis. Among these, the healthcare workers on the frontline who risk so much personally so that we might receive treatment when we need it. Those whose livelihoods have been threatened or destroyed, and most importantly, those who've lost loved ones both as a direct and an indirect result of this pandemic. I don't want to in any way diminish the very real impacts that the current events are having on so many. But, it's fast approaching the time when leaders should think about doing what they've signed up to do. That is to accept the cold hard facts for what they are, and work out how to take people beyond that calmly and confidently so that value emerges from the back end of this tragedy. All right, let's get into it.

Today I've got a list of 10 reasons why we should be positive about the long term impacts from the COVID-19 pandemic, so I'm going to whip through them in no particular order. Reason number one, complacency is largely gone. Just looking at Australia where I live, we've had almost 30 years of uninterrupted prosperity and economic growth, and the kids coming through have no sense of anything but full employment and unbridled consumer confidence. As leaders of the future, it was very much like these people were going to be entitled and naive. I think now though, it's fair to say, that coming out the back end of this pandemic, they will have a new appreciation for what can go wrong and it will give them a completely different grounding and sense of perspective on the world that they're dealing with. Having that as a foundation for our future leaders is an entirely positive thing.

Complacency is also being shaken out of the business market. Prior to this tragedy, there were an inordinate number of businesses that were cruising in a buoyant market - and no doubt, some still are - with access to cheap capital and laziness around competition in many industries. In times of crisis, many businesses react by becoming more efficient, and the question I always have is, well, if that efficiency was there to be taken, why didn't you take it in the good times? Because that would've made you more competitive. And when it comes to leading people, I'm sure you very often heard that platitude that many leaders come out with, "People are our most valuable asset". Well, in most cases that's simply not true. It's much more likely that people are your most under-utilised asset, because putting the attention and focus onto leadership and culture, that's going to get more out of your people, is simply something that hasn't needed to be done before. So complacency is largely gone.

Reason number two, why we should be positive long term. The reality of developing countries is now much more tangible. Access to healthcare in the OECD is pretty much taken for granted. But in non-OECD member countries, it's a very different story. So in India for example, around 300 million people live below the poverty line. And 300 million people, that's not far off the total population of the US. 70% of people in India live in rural areas where access to medical services is quite limited. Not having access to high quality healthcare there is a fact of life. So we are now seeing in the Western world the unthinkable, where we know what it's like to be faced with the prospect of not enough hospital beds, healthcare workers and equipment to cope with a spike in demand. Now where as this might not be entirely desirable, it does give us an opportunity to see the world through the eyes of those less fortunate. I'm a firm believer that one of the key leadership capabilities is to view the world through the eyes of others. Leaders are learners, so this perspective is going to shape many people's view of the world.

The third long term benefit I've identified is a return to strong leadership. During this crisis, we've needed to make tough decisions to survive. And people are now calling on strong leaders. I saw a research article the other day in the Australian Financial Review that was talking about now, the fact that strong leadership is in Vogue. People prefer it. And this has completely swung around in just a three week period. There's this concept of "the wartime leader", the leader that's there in tough times to lead us through and navigate through very, very treacherous and difficult waters. The soft, fluffy, kumbaya leadership approach has severe limitations, and this crisis has put a spotlight on what those limitations are. So the return to strong leadership is not a return to command and control. It's regaining the balance. Since we swung too far towards fluffy, lovey-dovey, ineffective leadership. One caution I'd leave you with though here is that I don't think it's the case that the leaders who've lead through this crisis have necessarily had to do the full job of a crisis-time leader. Because of the scale of this and the global nature, a lot of leaders aren't really having to step up too much, because a lot of the most critical decisions are taken out of their hands. So for example, governments will say, "Lock this down here, don't do this, please do that. Here's a financial rescue package". So a lot of stuff is being made outside of the scope of a normal corporate leader's role, and accountability for decisions aren't necessarily landing in your office. So just be aware of that because the next time you have a crisis that's localised, it may be a very different story.

Long term benefit number four, we are learning to work in different ways. You would not believe the number of people I now know who can use Zoom and Google Hangouts. But we are looking at ways to find efficiency because we're forced to. A more remote and fragmented workforce is a trend of the future, and this has all come rushing at us pretty quickly in the last couple of months. But to defray the cost of co-location and the cost of travel, this is going to become more and more the norm. Now I remember only a couple of years back, I actually flew from Brisbane to London for a single meeting. And yes, it was an important meeting, but these days would I actually do that? Maybe instead of taking four days out of my calendar to do something, I'd take four hours, that might be a little bit more efficient. But one of the really big positives about doing a lot more things electronically is it will really help us to value the human interactions that we do have. We'll be more empathetic, and more human, and the opportunities we do get to be face to face we will treasure those a little more.

Number five on the long term benefits list, is this is getting us to return to the opportunity of building our brand. When we think about it, sales are slumping for most industries at the moment except essential services, but when we're looking at not making revenue, how do we actually turn our time into customer value? How can we actually build our brand so that people realise what we do is driven by something more than just money? We were pretty fortunate here at Your CEO Mentor because given how recently we set the business up, that's how we started. We realised that the business model of the future is all about brand, trust and value, and if you can do that and reach enough people with it, the income will follow the impact. Now, the businesses that have been going really, really well and haven't had to think about brand building too much, will get the opportunity to do that, and I think in the future we'll see much more of a focus on the value that a brand can bring to its customers in the long term, as opposed to just the transactional sale.

The sixth longterm benefit to come out of this crisis is that we are really seeing now a catalyst for innovation. A lot of organisations are having to seek alternative revenue streams right now, in order to survive and what it's really doing is helping with a return to differentiation. Thinking about your competitors, thinking about where you're positioned in the market and if you didn't listen to last week's episode, which was called, “Strategy isn't hard: Don't over complicate it”, then it's really worth going back and having listened to that one, even if it's only to understand the difference between a differentiation strategy, and a low cost strategy.

The seventh long term benefit that I think is going to come out of this crisis is that once again we've shown the fragility of certain industries and companies. Now in the global financial crisis of 2008 it demonstrated in living colour how fragile some of the banks were, and governments had to come in with bailouts because those banks were too big to fail. What happened in the wake of that both governments and regulators decided that they were going to change the requirements for capital reserves. And so it was going to make the banks more robust, and more able to handle the shocks that came through. And it's this strength in banking system that's now going to provide a way forward for us, out of this particular crisis we're dealing with now. The industries that we're now looking at and thinking that they're very, very shaky, is things like airlines and we've always taken these for granted.

Now, Warren Buffet, in his letter to the Berkshire Hathaway Investors in 2007 gave the airlines a little bit of a caning. He said it's the worst sort of business. It's one that grows rapidly, requires significant capital to engender that growth, and that it earns little or no money. Here, a durable competitive advantage has proven elusive ever since the days of the Wright Brothers, and he went on to say, indeed, if a far-sighted capitalist had been present at Kitty Hawk, he would have done his successors a huge favour by shooting Orville down. The question is, will this business model evolve? Will governments and customers alike look differently at this commodity product? Only time will tell.

Reason number eight to be positive about the long term impacts of coronavirus. It cleans out inefficient players from markets. Now, I've always liked seeing the cycles of the bear market come through because this is where we get a chance to see the strong survive, and the weak to fall by the wayside, and this is a really important part of business and of delivering value to a customer. Now, in this particular situation, the government stimulus measures that are being taken all over the world, will save some businesses that probably shouldn't be saved. They probably don't deserve to be. Because pandemic or no pandemic, they would have actually failed, but that's not really the point. The point that this is going to clean out a lot of the industries of the weaker players and make the ones that do survive much stronger, providing a much better pathway to productivity for the future. I know that sounds a little bit brutal, but it is a reality of life and a reality of business that we all need to pay attention to. This situation has just given us the opportunity to see it close up and personal.

Long term benefit number nine. Many businesses will now see value in an online strategy. Despite the amount of disruption we've seen in the last five to ten years from online players, some businesses still haven't really had to evolve. Well now, I think that's really coming to an end. And now even industries that haven't been severely disrupted by online players, are going to find themselves in that position. So for example, hairdressing salons have had to close down in Australia because those services can't be offered. But the smart ones are moving into selling hair straighteners and home colouring kits online so they can still get a revenue stream from online business. As I said in Your CEO Mentor, we were fortunate that we designed our business for the online world. Everything we do can be delivered that way, so we haven't had to scramble to put together any online content. It's already there. But what we're seeing is a lot of players who weren't geared up for this and particularly when we see schools that are closing and offering online education, the teachers are really struggling with adapting to that new model. They don't know how to change. The good ones are going to catch up and refine this over time, and the ones who survive, those strong organisations and those strong businesses, are going to be leading into the future with the newly acquired skills.

And finally benefit number 10 that's going to come long term out of this situation. Now I know I said I wasn't going to do this in any particular order, but I did want to save this one for last, and here it is. People now may just start to value their jobs a little more. And this is pretty important. We've just seen record low unemployment for a long period of time and that's now at an end. Job scarcity is back for a while. And this should feed into an increase in labour productivity, but more importantly with people who have jobs, be grateful. Don't sit around bitching and moaning about the work, and about what your boss is doing or isn't doing. Be grateful that you have a job and put your shoulder to the wheel and do it to the best of your ability.

Just to tie this all up. For leaders I said at the start, now's the time that you need to start looking through the crisis to what you're going to do on the other side of it. And there are many, many long term benefits that are going to come out of this. Sure, the world's going to be changed. We all know that. And as I sit here recording this on the 7th of April, 2020, I don't know what's going to happen. By the time you listen to this, everything may have changed significantly once again. What I do know for sure, is that leaders need to take charge and map a strong path forward that takes their people and their organisations to a better place. So you're going to be up for that?

Alright. That brings us to the end of Episode #86. Thanks so much for joining us and remember, at Your CEO Mentor, our purpose is to improve the quality of leaders globally, so please take a few moments to rate and review the podcast, this is how we improve the world of work. I look forward to next week's episode, where we're going to do something a little bit different. I'm going to do a live mentoring session, so if you want to hear that, it's going to be a change in pace and something I think you'll really love. Until then, I know you'll take every opportunity you can to be a No Bullsh!t Leader.

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