Building Back Better After the Pandemic
In a recent webinar, Rotman School of Management professors Sarah Kaplan and Soo Min Toh, in conversation with Interim Dean Kenneth Corts, considered how organizations can build back, not as normal, but better than before—both to address the many structural inequalities implicit in the way we were, and also to take account of the many positive things we have learnt over the past weeks that organizations can benefit from in future.
Perhaps the first thing we have learnt from the COVID-19 crisis is that in a state of emergency organizations and governments can take radical action very quickly, and that people will follow them so long as they are trusted. Also, as Soo Min Toh points out, leadership comes to the fore in difficult times. While under pressure themselves—in fear, frustration, confusion and shock—leaders have been relied on more than ever to provide direction and to offer emotional support to the people they lead. She does not believe any form of leadership style—autocratic or more democratic—is best. The crisis reveals the importance of leaders being both firm and decisive, and at the same time caring and empathetic—characteristics to value going forward.
Sarak Kaplan points to how far the crisis has exacerbated some of the issues around inequality we find in organizations and society. For example, that more women than men have lost their jobs for a variety of reasons, and that low paid, often essential, workers have suffered most both from the virus and from its economic consequences. She, highlighted three interrelated areas organizations should focus on to build back better after the pandemic: workforce, strategy, and governance.
Sustainable recovery will need some broad systems thinking around the way we work. The crisis has highlighted how much a healthy business needs a healthy, cared-for, workforce. Employees have shown great resilience in managing to balance their work and home life. Organizations should learn from this and be explicitly prepared to offer flexible and remote working. Universal child care and four-day weeks are also areas governments should think about. The other key workforce lesson is that essential workers really are essential and should be paid and employed to respect that.
Normal for many companies has always meant ‘shareholder primacy’. In the new normal it will be important to have far greater consideration for all of the other key stakeholders, for society and for the environment. Kaplan suggests a good guide would be for boards to move towards realizing the UN’s Sustainable Development Goals. Business leaders need to reflect and listen to the needs of everyone involved in the value chain—customers, employees, suppliers, and of course shareholders—but with primacy going to society at large.
To be truly accountable to the full range of a company’s stakeholders, Kaplan believes board members should rethink the ‘business judgement rule’—the legal principle whereby directors are said to be motivated in their conduct by a genuine regard for the interests of the corporation whose affairs the shareholders have trusted them with. Governance after the pandemic should be broadened to build trust amongst all stakeholders and to address the company’s environmental and social impact.
Bearing these three areas in mind, it will be useful for leaders to frame their post-pandemic recovery efforts as an ‘innovation challenge’. Rather than returning to normal, now is a time to innovate new ways of working and new strategies that reflect the new post-pandemic environment. There will of course be pressure to turn profits again, but the message that non-traditional, socially responsible measures of business success, lead to long term sustainable success can be a central spur for innovation.
As far as what leaders should do now, the professors recommend that boards should urgently consider the lesson learnt from the crisis, reflecting on how radical change has been possible and how it can be possible in future to build better. They should take actions that address the needs of all stakeholders, fostering social good—as this will be key to economic recovery. They should look at how well leaders are trained to support those they lead. And they should follow up on the lessons learnt about how to accommodate remote and flexible working. Finally, Toh warned against recidivism—the natural tendency to slip back into bad habits. Now really is he time to build something better.
The real nugget of this article is the referral to the recorded webinar below:
This webinar was part of Rotman’s series ‘Managing Uncertainty: Adapting to and learning from the COVID-19 crisis’. You can view the original webinar here.
Rotman’s Interim Dean Kenneth Corts as welcomed Professors Sarah Kaplan and Soo Min Toh to discuss what it means for organizations to build back better after COVID-19. They discuss the inequalities in the current workforce highlighted by the crisis. They demonstrate how organizations, who can commit to creating a more equitable and socially responsible workplace, will improve their resilience over the long term. Explore the road to economic recovery as an innovation challenge, outline how you can lead your organization to invest in a better future of work.