COVID-19: A Catalyst for Change
“None of what we are going through is comfortable, or fair. And while things will likely get worse before they get better, has America, perhaps, just gotten the wake-up call it needed to get to a better place?” asks Mary Meeker in her recent “Coronavirus Trends Report.”
As board members, there are clear insights that apply to the companies we oversee and seek to challenge management to future proof. Despite the clear negative impacts we are facing due to the current novel coronavirus outbreak, the rapid changes to our everyday lives has shined light on the necessity for automation in our society. Amidst the pandemic, technology has emerged as the crutch for workers, businesses, healthcare and the government.
Unlike pandemics of the past, automation has allowed for widespread awareness of the matter thought global connectedness. In April, Meeker wrote there were around 3,000 published coronavirus papers; 20 times greater the amount of published papers for any other infectious disease.
With teams of the best medical minds in the world having the ability to share thoughts and information in real-time, coronavirus has undoubtedly been the fastest scientific response in history thanks to technology.
This automation suggests greater transparency and accessibility to information all over the world in real-time moving forward. This macrotrend of accelerating automation and transparency has implications for legacy business models. Boards may want to ask management to share what their learnings have been.
The virus has also shined light on the business models that work best through the struggles associated with the pandemic. The companies doing the best at the moment are those who had already began the offline-online digital transition prior to the outbreak.
Meeker suggests that when looking back on the spring of 2020, the businesses that were the most well-off have:
- Cloud-based business functions.
- Products that are always in demand (even better if their demand increases during uncertain times).
- An easily accessible and simple to maneuver online presence for consumers.
- A limited contact method of efficiently distributing and delivering products.
- Digitally efficient products.
- A widespread or emerging presence on social media.
For example, colleges and universities have been forced to transition to digital classes through the use of business-type apps such as Zoom or Microsoft Teams. A survey and sample of college-aged perspectives found the technological foundations already in place make the transition to remote learning easier. The collection of classes and materials through technological education companies such as Blackboard or Sakai allows for students to have access to their work from wherever they may be.
As traditional sports in America are halted, live streaming of esports and gaming emerged in its place. Professional basketball players, soccer players and motorsport racers have streamed virtual games and races for fans to watch. In March, the streaming technology Twitch hit an all-time high of daily users at 4.3 million, along with simultaneous users at 20 million March 15. The live-streaming approach offers an example to other businesses to follow in order to engage and connect consumers.
When observing the top American “market cap growers” (Microsoft, Amazon, Apple, Alphabet/Google and Facebook), a consistent trend is shown in their planning. Meeker pointed out, “They have short and long-term (10-20+ years) visions and business plans focused on data, execution, iteration, engineering and science.”
Coronavirus has emphasized a need for aggregate data-driven planning and operations. In terms of forward building and refreshing corporate boards, this means a greater need for understand and bringing in scientists, engineers and domain experts’ voices to be heard when forward planning.
A technologically savvy, digitally contemporary board may become more viable for your company as digital transformation of management and the business “stick” as the new normal, including remote work. This may be the answer for some or most of your employees even after the pandemic is over. CEOs and management should tell their boards their plans to evaluate their employees and teams to see who works best together in-person, and who works better remotely to maximum your company’s overall efficiency and production.
While managing the forced remote work environment (and if distributed work continues into your company’s future), using effective written communication and documentation — more specifically the “Amazon Way” — helps foster intelligent, productive input and decision-making while working remotely. I suggest asking management to make it a priority to share their systems to oversee and gauge productivity and efficiency.
Other business models that are thriving during the pandemic are on-demand, to-the- door delivery services. While some on-demand services are struggling through these times, such as Uber and Airbnb, other companies such as DoorDash and InstaCart that provide to-the-door deliveries have experienced drastic increases in demand. The rise in demand has accounted for a surge of job opportunities for displaced workers. Along with the evident benefits to consumers having food or groceries delivered directly to their house, and the benefit to local stores/restaurants having their products bought, these on-demand services allow workers to maintain flexible schedules around their personal lives while also having the ability to work on multiple platforms. Meeker wrote that she believes these “on-demand and to-the-door delivery services may be gaining permanent market share in these unusual times.”
While the virus has emphasized the need for automation in current business models during the pandemic and moving forward, it has additionally exposed the structural flaws and necessity for automation in our government and healthcare system.
The government’s day-to-day operating systems and technologies are outdated and vulnerable. Around the world, countries such as Singapore and Korea have used technological apps to keep their citizens informed and safe. I am optimistic that the current outbreak will force much-needed upgrades and restructuring of government technologies. In response to the virus, the government has moved away from paper checks for their stimulus payments and transitioned to companies such as PayPal, Inuit and Square to move forward with the CARES Act, thus displaying hope for greater connectedness between the government and its taxpayers, voters and citizens. The public/private partnerships have been a proof point and a template for different responsiveness.
Much like the government, healthcare delivery is far outdated as well as it has seen little change since the Spanish Flu of 1918, despite accounting for 8% of U.S. GDP and $1.2 trillion of federal spending in 2019 (28% of the federal budget), according to Mary Meeker. On average each year, U.S. primary care offices have around 500 million visits. Additionally, the electronic health records (EHR) stored lack connectivity and interpretation due to the overloaded schedules of many medical professionals. Advances in technology such as telehealth, connected monitoring devices, and rapid point-of-care diagnostics could slow the spread of contagious viruses and diseases by reducing the necessity for face-to-face appointments and exposure. Automation and artificial intelligence also allow for greater opportunity to analyze and build connections and insights on EHR data while reducing the workloads of medical professionals. I believe that telehealth is here to stay and the health care sector is poised for more rapid digital transformation. Boards in this sector may want to ask management how they will accelerate these changes.
My belief is that COVID-19 can be a catalyst for change in our current world for the better. These difficult times are merely providing us with the opportunity to advance our society, businesses and lives in becoming more technologically driven because that is the post-coronavirus world we will soon be entering. Public and private company boards may be very well served to ask management at their meetings to articulate how their businesses will be changing this year and for the next 24 months based on their adaptations that have been made in these past five months. Questions to ask are what will change permanently, what needs to be prioritized to accelerate into these future trends, what is the boards’ role in “future proofing” the company, and how management will see around the corner. We are here to help assure shareholders and stakeholders that our companies are innovating, adapting and embracing the present and the future.
Betsy Atkins is a three-time CEO and founder of Baja Corporation and author of Be Board Ready. Betsy is a corporate governance expert and is currently on the board of directors of Volvo Car Corporation, Wynn Resorts and SL Green Realty.