Bain uses cookies to improve functionality and performance of this site. More information can be found in our Privacy Policy. By continuing to browse this site, you consent to the use of cookies.

We have limited Spanish content available. View Spanish content.

Forbes.com

Four Questions (and Answers) About Covid-19’s Lasting Impact on Business

Four Questions (and Answers) About Covid-19’s Lasting Impact on Business

This time of great upheaval has led to a rethinking of how we do business, now and in the long run.

  • min read

Article

Four Questions (and Answers) About Covid-19’s Lasting Impact on Business
en

This article originally appeared on Forbes.com.

This is a moment of questions. So much of how we have long operated, managed people, sourced materials and served customers has been upended by Covid-19. Some of these changes have accelerated trends already underway, such as flexible working and the importance of cultivating resilience. Others are shedding new light on the value of things like empathy and authenticity in leadership, and diversity and inclusion among teammates.

I recently was asked to reflect on some questions about where we stand today, eight months after global health officials began tracking this threat. The four I share here hit on some critical areas in which the pandemic has pushed our thinking forward.

Can companies come out of Covid-19 stronger?

I’m hopeful. What’s different about Covid-19 compared with other recent geopolitical, environmental or even health shocks is that, this time, the business world realizes it isn’t a onetime event, but rather the start of a new status quo. Businesses increasingly operate in an environment of constant crises—be that a pandemic as we are in now, trade wars, natural disasters, terrorist events, data breaches, social unrest, etc. The job of business leaders today is to build organizations that will thrive in a world of unpredictable and accelerating change. Flexibility and agility are now king.

Many organizations are moving quickly to tackle the current challenge, taking very deliberate steps to come out of the pandemic stronger. Based on what a number of companies are doing, a smart model might begin with a first step called “reflection.” This would be a conscious effort to collect and share stories from the front line. (One that sticks out in my mind is the story of a manager redesigning supply chains on her dining room table.)

After reflection, a second step would focus on “purpose.” These are the values employees have demonstrated during Covid-19 that are so powerful executives want to harness their energy and embed them into how the company works going forward. At that point, the company would be ready for a third step toward its broader ambition, possibly even a full strategic transformation, with a set of portfolio moves designed to make the business stronger coming out of the crisis.

Competitively, where can companies expect to find themselves once this is over?

Data suggests that organizations that are able to adapt quickly to these new ways of working will outperform their competitors. At Bain & Company, we call an organization’s ability to change its Change Power. Change Power can be measured across industries and regions, and those with more of it report higher levels of growth, profitability, and employee satisfaction relative to their competitors.

Covid-19 has put this to the test. Since the lockdown of a majority of advanced economies this March, the stocks of companies with high Change Power have outperformed those with lower Change Power, with correspondingly higher results in terms of management approval and culture ratings.

What is Covid-19 teaching us about leadership?

There’s a certain humanizing element that Covid-19 has brought to the surface, which I hope will take hold and propel us as a society to do better. The times when empathy and authenticity are most needed remind us of the difference one person can make in the lives of others. Remember the management maxim that during times of stress people need to know that you care before they will care what you know.

Beyond the current pandemic, we see technological, demographic and macroeconomic disruptions that are changing our world and spurring a call for greater corporate and civic responsibility. The days of sole focus on shareholder returns are over. Organizations that use the Covid-19 crisis to reflect, learn and adapt will be best positioned to emerge stronger, with purpose, and ready to respond to the challenges that certainly lie ahead.

Will the pandemic end up having a positive or a negative effect on corporate diversity?

Many organizations have been forced to use the pandemic period to experiment with flexible ways of working, producing some interesting and, I think, encouraging early results. For one, most employees report that productivity has either stayed the same or increased, according to a recent study by my Bain colleagues, and many report increased engagement, dispelling the myth that flexibility undercuts results. Individuals cite greater team agility, zero commute time and better ability to focus as reasons for their improved productivity.

There are challenges around technology access and caregiver options that must be addressed as well, but many companies have been innovative in helping their employees navigate those obstacles. This will be important in the long term because we know flexible work supports diversity and inclusion. It unlocks caregivers’ workforce participation, taps into a broader talent pool and helps achieve gender balance in leadership—which, research repeatedly shows, markedly improves business profitability. Covid-19 has proven that roles and industries previously considered unsuited to flexible work can, in fact, be adapted.

Tags

Ready to talk?

We work with ambitious leaders who want to define the future, not hide from it. Together, we achieve extraordinary outcomes.