By Valerio Sordilli
Amidst lockdown, furloughs and distancing, the crisis has finally imposed on companies a revolution of organisational models. While that has been threatened for years, we are a long way from understanding the implications. A recent study published by McKinsey outlines some of the consequences. This pandemic will force every company from one-man-bands to multinationals to make drastic, complicated, often uncomfortable, choices.
60 million jobs in danger?
The study “Safeguarding Europe’s livelihoods: Mitigating the employment impact of COVID-19“, Caused a stir with its headline finding –
The coronavirus will put at risk about 60 million European workers, from the loss of temporary or permanent employment and from working time or pay reductions.
McKinsey notes that almost 80 per cent of the positions at risk are carried out by professionals without university qualifications. Unsurprisingly the largest sectors at risk are those with direct physical contact with the public: customer service, retail sales, hospitality and construction.
“Two dimensions will drive how bad the economic fallout of the current crisis will be: the economic impact of the virus spread, will depend on the effectiveness of the public-health response, and the economic impacts of the knock-on effects, which will depend on the public-policy responses to mitigate these effects.” – McKinsey
Beyond the numbers, the study offers food for thought as academics, HR managers and business leaders debate the implications. An early consensus is that we cannot separate economic recovery from a new organisational model, and remote working is only the tip of the iceberg. Businesses must adapt.
“It is not the strongest of the species that survives, nor the most intelligent; it is the one most adaptable to change.” – Charles Darwin
Only as we are slowly taking our first steps out of lockdown, do the full implications hit home. Companies will have to apply effective protocols, and the impact will change depending on the nature of the business, as well as local regulations and advice.
There will be a cultural impact.
Shift separation, staggered shifts, may become a reality even for workplaces that traditionally have had fixed hours. Expect rules restricting hours of access to the workplace for activities not strictly related to production. Another pressure on this is the desire to ease commuting traffic. Social distancing within limited space can reduce capacity – some employers are looking at staggering time in the workplace and working from home on rotation. This may be more even more complicated than it first seems, with some of the calculations feeling like complicated maths problems.
Some organisations are considering workforce segmentation based on the vulnerability.
Safety of employees and customers is a priority. That is in tension against business efficiencies and tight margins. To be safe, we may need to change the measures of efficiency. In short, the Gospel written by Taylor in the early 1900s, useful for a century, is on the verge of being shelved because the scientific fragmentation of the work no longer guarantees the optimum solution. And if a less vulnerable workforce is also more profitable, does that justify discrimination on a safety basis?
Acceleration of change
Business ecosystems have always been in flux. The ‘disruptive’ 21st century has washed old certainties away – probably the pandemic is just accelerating a process already begun. Remote working is the most immediate example. Coping with the sudden knowledge and authority loss of key figures through illness and furlough is another.
How does the structure of the organisation changes around that? The post Covid-19 archetype (or more correctly, as a vaccine is not guaranteed, the “post-peak Covid-19” archetype) may no longer have a central brain. We may see organisational structures that define an articulated decision-making process, which involves multiple intelligences and therefore, does not have bottlenecks.
Just as the internet was designed to be nuclear proof with multiple network paths – businesses may build resilience with multiple decision paths. What is under discussion today is the very concept of subordination in the organisation of work, where every brain becomes a resource, at any level.
To do this, even as we are working apart, we need to be moving in the same direction. It’s essential to produce in the company the sharing of a common goal and, above all, maximum modularity: no longer the ‘breakdown of the activities’ as Taylor theorised, but an ‘aggregation of components’ as interconnected modules.
Recruit, Repurpose, Retrain
A different approach to human capital “frozen” by the emergency is in Skills Exchanges, and labour repurposing. McKinsey cites several examples of pivots – such as apparel manufacturers moving to PPE production, and distilleries moving to create hand-sanitiser.
Skills exchanges can allow companies to borrow furloughed or reduced talent into a new role. While great things have been done in quickly rolling out Remote Working, further investment is likely to pay off in the long term. Companies that can think ahead strategically to their future model skills-gaps, and retrain from existing human capital, may gain benefits and advantages.