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Goodbye 2020, I Will NOT Miss You!

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“I never lose. I either win or learn.” – Nelson Mandela

For starters, wishing you and your family a very happy New Year.

For me personally this past year was extremely challenging. It was filled with professional and personal heartaches, along with some momentous positives. I will skip the details, but suffice it to say that in my lifetime I have never experienced the amount of stress, uncertainty, and angst that 2020 delivered.

Fortunately, every storm passes and the sun eventually emerges to shine again.

To say that I have gained a lot from 2020 is an understatement. This might sound horrible and insensitive, but in many respects, I am very thankful for the last 12 months. While I would not want to live through it again, I have learned and grown tremendously.

Here are some of the key lessons I learned.

Expect the Unexpected

So often in our personal and professional lives, we are surprised and caught off guard by an unexpected external force. Something we did not anticipate, or even imagine possible.

Whether it is an insensitive comment from a friend, a political move by a co-worker, losing a job, a direct assault on our business from a competitor, or, perhaps, even a global pandemic, the world of work is full of VUCA forces (volatility, uncertainty, complexity, uncertainty). These can cause a wide range of impacts from just “having a bad morning” to seriously jeopardizing your livelihood or the viability of your organization.

The best solution to any problem is always to prevent it from happening in the first place. While predicting unknowns is not always possible, developing a good situational awareness of your environment and marketplace is a great place to start.

You might be surprised, as I was, at how many “clues” you missed by rushing through your daily routine and not paying closer attention.

Developing a better understanding of your surroundings will help to better define possible threats. You can then begin to brainstorm their potential impacts, and your response, should they arise. This type of Scenario Planning is a key aspect of VUCA Strategic Planning, and doing it regularly will help to ensure you and your organization are more resilient against any threats.

External forces are very real. We cannot ignore them. However, we also cannot allow them to consume us.

When they hit us, we have to address them, learn from them, and then focus on moving forward.

Crisis Can Lead to Introspection

Another big lesson from all the VUCA forces that hit me this past year was this: The event does not define us. It is how we choose to respond that counts.

I have seen three common response patterns, and depending on the situation, each of them has merit:

  1. You can decide to hunker down and hide. Sometimes we get lucky and the storm will pass by leaving us unscathed. Unfortunately, for many issues in the world of work, hope is not a strategy, and the issue will still likely be there tomorrow.
  2. You can lash out. With the right strategy, fighting back can sometimes be effective. However, if you get it wrong, things can get messy in a hurry.
  3. Or, you can take it as a learning opportunity and figure out how to move on. Sometimes we have to accept the things we cannot change, and pivot.

There is a lot of value to be gained from detaching yourself (taking a neutral and objective view), reviewing what happened (being honest, not overstating it but also not sugarcoating it). This allows you the time and space to figure out what you could or should have done differently (if anything). Which hopefully will lead to internalizing the lesson (so you do not repeat the same mistake again), and then figuring out the plan to quickly move on.

Another lesson that 2020 taught me was I am often guilty of not taking enough time for introspection. I think it is a common executive ailment – everyone is so stretched for time, moving fast, and always focused on solving problems quickly. This merciless cycle does not afford the time we need to process and learn.

Like many professionals, the pandemic forced me to work from home and prevented any business travel since March. This has given me more time to think, to learn, and to strategize about the future than I have had in the past 20 years. As an added bonus, the time with family and a better work/life balance has been priceless.

Crisis can lead to healthy introspection, if you take the time to do it.

Introspection Leads to Reinvention

By allowing ourselves time for introspection, something magical happens. We not only gain clarity, but also a newfound confidence to revisit and challenge the status quo. I have found that the more profound the external force, the greater the potential opportunity for change.

As evidence, we do not need to look much further than what has happened in the world of work over the past 10 months. The global COVID-19 pandemic caused many organizations to make rapid and far-reaching changes to how they get work done. A few examples of this dynamic workforce and workplace reinvention:

  • As evidenced by the unprecedented spike in US unemployment, almost every organization cut headcount in 2020. While we can debate whether some organizations did not cut enough, and others perhaps cut too far, the reality is millions of jobs are likely not coming back in their prior form. Many of these roles will resurface as more flexible, contingent jobs.
  • Some industries (for example, travel) may never come back to the same pre-pandemic level, while others (for example, home delivery) will reach new highs.
  • In 2020 we proved that almost every white-collar role can effectively be accomplished working from home. Many studies I read actually showed an increase in productivity for these newly remote workers. As the pandemic recedes, it will be interesting to see what organizations decide to do with their remote workforces, and their need for traditional office space.
  • Many highly skilled professionals will take advantage of these radical changes in the workplace and reinvent their careers as experts for hire (like how I am helping some awesome growth minded organizations with my 1CMO Consulting services!), achieving new levels of career satisfaction and work/life balance.
  • The research firm Gartner, predicts that by 2024 only a quarter of workplace meetings will take place in person. The meteoric rise of virtual meetings will have far-reaching impacts. Not only eliminating the need for a lot of corporate real estate, but also changing the dynamic of field sales (and all the things that accompany it like business travel and entertainment!)
  • The Gartner Future of Sales 2025 report predicts that by 2025, 80% of B2B sales interactions between suppliers and buyers will occur in digital channels. In other words, not in person.

These are just a few examples of how organizations, and the individuals who work in them, have been forced to challenge their historical assumptions when confronted by a crisis. The ability to test different approaches, see what sticks, and then quickly pivot, is the winning approach.

Reinvention Leads to New Opportunity

I am looking forward to seeing what the year 2021 has in store.

As we begin slowly emerging from our pandemic-forced hibernation, my prediction is that there will be many new opportunities (both personal and professional) in the upcoming year, visible to those who are paying attention to their surroundings and actively looking for them!

My practice of growth strategy consulting is certain to benefit from a rising optimism in the markets. And I suspect many readers of this article will be able to say the same.

With that, I say one last goodbye to the year 2020. I am very thankful and blessed to have survived intact, but I will NOT miss you.

-Onward

The Value of a Fractional CMO

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“Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat.”   —Sun Tzu

The responsibility for developing go-to-market strategy and ensuring sales alignment belongs to the Chief Marketing Officer (CMO).

High performing companies know that marketing enables sales, and that this strategic partnership is a proven ingredient to driving sustained growth. So, clearly, having a CMO on the leadership team is important for any organization that wants to grow. However, it is not an easy job to fill or perform. There are a number of common traps making it difficult for CMOs to be successful.

Adding to the challenge, there are also many different archetypes of the CMO role. This can make it hard for organizations who want a CMO to find the right one – the marketing professional whose background and experience match what the organization needs to thrive.

Despite all these challenges, progressive leaders of organizations often decide they need the expertise of a Chief Marketing Officer but then discover they cannot justify, or afford, to hire for a full-time role. Are they simply out of luck?

Fortunately, there is an emerging solution. Organizations can engage the services of a fractional CMO.

What is a Fractional CMO?

The concept of a fractional executive is not new. For years, companies have been bringing in seasoned experts to fill interim roles or do projects on a flexible basis. This type of role is becoming more common across all the traditional C-suite and senior leadership positions, including the CFO, VP Finance, CHRO, CIO, and increasingly the Chief Marketing Officer (CMO).

A fractional executive is a functional leader contracted to take a part-time or fixed-term position with a client organization. They are often very experienced former executives who want more flexibility in their working life, enjoy consulting, and like having a variety of clients.  

A fractional CMO, as the name implies, provides all the strategic value that a full-time Chief Marketing Officer brings to the table. They perform the executive function of a CMO without forcing the client company to commit to the full-time salary and burden of a person in that role.

Perhaps the best way to think of it is as a flexible, part-time CMO. To borrow a technology term, you might call it CMO as a service. 

Is a Fractional CMO Different From a Marketing Consultant or Agency?

The short answer is “Yes” – a fractional CMO is different from a marketing consultant or agency.

How? Well, it comes down to the difference between strategy and execution. A fractional CMO will develop a comprehensive strategy and execute, whereas consultants or agencies have their own business model bias:

  • Marketing Consultants – Consultants are the experts you engage, typically on an hourly or project basis, to develop a strategy or perform a specific tactic. Once the solution is developed, either you are on your own to execute the plan, or the service is narrow and not a comprehensive marketing solution.
  • Marketing Agencies – Agencies, on the other hand, typically give away the strategy so that they can sell you their services. The more services they provide, the more money they make. This creates a conflict of interest that is difficult to sort out if you do not have an experienced marketing leader on the team.

A fractional CMO is that experienced 360-degree marketing leader who you want on your leadership team!

They will work directly with the CEO and other functional leaders to develop a growth strategy, and a plan to execute it. The fractional CMO then takes ownership of the growth plan to manage the marketing program and team. Since the fractional CMO is not in the business of selling services, there is no bias in their recommendations – there is no risk that they will recommend marketing tactics that are not suited for the business.

What Does a Fractional CMO Do?

In short, a fractional CMO does everything a full-time chief marketing officer would do. They are the senior executive responsible for growth strategy, marketing execution, and for ensuring alignment with sales.

Great fractional CMOs will also get their hands dirty. In collaboration with the CEO and the Sales leader, they will take the lead on developing a growth strategy and plan. Depending on the needs and capabilities of the marketing team, an experienced fractional CMO will roll up their sleeves and dive into those areas or activities where they can add the most value. Powered by a strong bias to action, a fractional CMO always leads the implementation and achievement of the growth strategy.

The Value Proposition for a Fractional CMO

There are many benefits to having a Chief Marketing Officer helping define the future and drive the growth of your organization. However, not every organization can afford or justify having a full-time salaried executive like a CMO on the executive team. These organizations can benefit from a fractional CMO who will deliver much of the same value proposition with lower risk and less cost.

Significant benefits from engaging a fractional CMO include:

  • Results – A fractional CMO will deliver measurable results. The statement of work (SOW) that the CMO and CEO define together will define the deliverables and KPIs that marketing owns. The fractional CMO will ensure that marketing delivers the results you need.
  • Experience – A fractional CMO brings a depth and breadth of experience that typically spans across many roles and industries. This is often much greater than what your organization could recruit on your own.
  • Cost Effectiveness – Because you are not paying the salary and benefits of a full-time high-caliber executive, there is reduced overhead cost to have a CMO on your leadership team.
  • Expertise – An experienced fractional CMO will have expertise across a number of marketing strategies and tactics. They will bring with them an extensive toolset of best practices.
  • Flexibility – Fractional CMO engagements are structured to provide the organization with the flexibility to quickly ramp up or down depending on what the business needs and can afford. This just-in-time approach to staffing an executive position is very attractive to many organizations in times of uncertainty.
  • Strategic Impact – A fractional CMO will hit the ground running. With a clear SOW and a mandate to transform marketing, they will cut through political red tape and internal hurdles, in order to drive growth. This accelerated time to productivity helps to deliver results quickly.
  • Marketing Leadership – Providing marketing leadership, oversight, and mentoring for the go-to-market team is a big part of what a fractional CMO can deliver.
  • Strategic Advisor – A fractional CMO will also provide the CEO and other leaders with unbiased strategic counsel by leveraging their experience and “outsider” perspective. This is a valuable point of view which internal teams often do not have access to.
  • Improved CEO Focus – Many CEOs get distracted by managing the marketing function, and managing marketing/sales friction. An experienced fractional CMO is a self-managing executive that will lighten the CEO workload by managing all aspects of the marketing department. This frees the CEO up to focus on other important aspects of the business.
  • Accountability – A properly structured fractional CMO engagement ensures that the CMO develops the growth strategy and implements the marketing plan. There is a built-in accountability for performance and results.

Common Use Cases for a Fractional CMO

As you can see, there is a significant value proposition for engaging a fractional CMO. What might be less clear are the common situations, or use cases, where a fractional CMO makes the most sense. Here are a few:

  • Emerging Growth Company – For smaller organization that have big growth plans (yearly revenue between $5-50M) engaging a fractional CMO will free up capital to bring on experienced implementers and accelerate growth.
  • Leadership Vacuum – Perhaps because of an executive departure, or by virtue of rapid growth, the marketing group is suffering from a lack of vision or leadership. In many organizations, marketing is an after-thought behind sales and thus largely ignored, delegated to a well-intentioned but inexperienced staffer, or handed off to outside agencies who have their own agenda. In either case, the marketing function and potential for growth go sideways without a capable leader. An experienced fractional CMO can create or rebuild a marketing organization, and provide mentorship and growth opportunities to the team.
  • No Growth Strategy – The senior leadership team and board of directors want growth, but are not sure how to develop a strategy or plan to achieve it. This is a common situation for an experienced fractional CMO to come in and take the lead.
  • Missed Market Opportunities – The organization consistently lags industry growth. New products or services have failed to launch effectively, and languish as a result. Aggressive competitors are consistently winning deals that the company used to win. These are all signs of a failing strategy (or lack of one!) A seasoned CMO is the answer.
  • Lack of ROMI Clarity – The company invests in marketing tactics like tradeshows and search engine ads, but has no idea what drives new business. This lack of insight and metrics means the company has no idea of its marketing ROI (ROMI). An experienced CMO will ensure this gets fixed.
  • Marketing / Sales Divide – Another common ailment in many organizations. In cases where marketing and sales are misaligned, or entirely dysfunctional, an experienced fractional CMO can quickly get things back on track. In the best run go-to-market organizations, marketing enables sales.
  • Change Management – There are cases where a CEO, board, or private equity company want to get an honest assessment so that they can affect change on the go-to-market organization. This is a perfect use case for a fractional CMO to parachute in, triage, and rebuild the marketing function.

Three Possible Actions…

When confronted with the strategic imperative to grow the organization, leaders can take three possible actions:

  1. Do nothing – Sadly, this is the most common path. Instead of investing in marketing leadership, the decision is to continue down the same path, expecting a different result. The poor results are entirely predictable, and preventable.
  2. Go sideways – Due to fear, uncertainty, and a lack of conviction, some leaders hand off marketing to a junior member of the marketing team. This well-intentioned and convenient solution generally does not yield much growth by way of results. After kicking the can down the road for a while, thoughtful leaders revisit the decision and bring in a seasoned marketer to define strategy, tactics, and execute.
  3. Go forward – Strategic leaders recognize the value of delegating the creation and execution of a growth plan to an experienced CMO. If they cannot justify a full-time CMO, they will engage a fractional one.

Getting Started with a Fractional CMO

A fractional CMO is a part-time CMO who delivers full-time strategic results. As an experienced CMO, they will not only develop growth strategy, but also own execution of the plan.

Regardless of the use case that causes an organization to consider engaging a fractional CMO, they will deliver significant value – from developing strategy, to aligning marketing and sales, to mentoring a marketing team, to market positioning and messaging.

Every growth organization needs a CMO…and with the fractional CMO option, there is no excuse for not having one.

-Onward

Can We All Work From Home?

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“The challenge of work life balance is without question one of the most significant struggles faced by modern man.” – Stephen Covey

Introduction

I don’t think Stephen Covey could have predicted the rapid and far-reaching impact the pandemic crisis has had on the world of work, and how it has changed the definition of work-life balance for much of the workforce.

As we continue down the path of finding a “new normal” the economy is slowly re-igniting in sporadic bursts. Unemployment is still at historic highs in the US and around the world, but it is starting to level out. Many workforce experts are predicting the great workforce shakeup of 2020 will likely continue to unfold and recover for the next 12-24 months.

One of the most startling outcomes has been the rapid enablement and adoption of “work from home” (WFH) policies by many organizations. While this movement has been discussed for years by HR theorists and was slowly gaining traction, it literally exploded in the matter of a few weeks this spring when it became a widespread requirement for people to shelter in place because of COVID-19. Many organizations that had been forced out of necessity to temporarily implement WFH policies are now extending them, and in a growing number of cases making WFH a permanent option (at least for some workers).

This movement brings with it both challenges and opportunities for business leaders, and it surfaces many of the inequities in the workplace.

The World of Work is Not Fair

Yes, it is true: the world of work is simply not fair or equitable. It never has been.

And I’m not referring to racism, sexism, and other forms of discrimination which we all know are still very much a systemic and serious problem in our society and the workplace.

The bitter truth is that remote work only amplifies a number of the historical discrimination problems in the workplace. Research by the Economic Policy Institute highlights two examples:

  • Less than one in five (19.7%) of black workers and roughly one in six (16.2%) of Hispanic workers are able to work from home.
  • Higher-wage (earnings greater than 75th percentile) workers are six times as likely to be able to work from home as lower-wage (earnings below 25th percentile) workers.

Making matters even worse, work from home has exposed the painful reality that many jobs simply are not possible to do from home. For example, most service jobs (ranging from food services, to hospitality, to retail, to home/auto repair, to healthcare, etc) by definition are done at the point of sale or service. While some can be brought to the home, many of these “hands on” tasks are physically impossible for workers to perform while working remotely.

Early Feedback on Working From Home

Early reports on the overall effectiveness of working from home have generally been encouraging. Many organizations have noticed a productivity bump in their remote workers which they attribute to factors like eliminating commutes, shorter meetings, and less social talking.

According to a recent Upwork survey:

  • 56% of hiring managers think working from home has gone better than expected, and one-third said productivity has increased (while less than a third said it decreased). 
  • 62% plan to offer more remote work opportunities going forward. 

And workers seem to like the arrangement as well:

  • According to recent Gallup research, 59% of U.S. workers who are working from home because of the pandemic want to continue working remotely.
  • Evernote research found that 48% of respondents reported adopting a slower pace during quarantine, and 51% allowed themselves to broaden their definitions of “productivity” to include learning new skills. 

To be fair, even with the above positive data points it is not all sunshine and roses. There are both positives and negatives to working from home.

Pros and Cons

There are a number of positive benefits to working from home, for both workers and organizations:

  • Lower overhead cost: Potentially less overhead costs for organizations as they reduce the amount of office space they need. However, this is a longer-term potential benefit, as it will take some time to unlock. And, it remains to be seen if social-distancing becomes a permanent fixture, in which case organizations will need more space for the remaining workers. A related benefit (depending on where you stand) it is likely the end of the loved/hated “open office” trend, as organizations will be forced to put in more physical barriers and space between those workers who do come into the office.
  • Lower wages: Organizations are contemplating the opportunity to pay workers less by playing regional/global labor cost arbitrage (i.e. not having to pay Silicon Valley or New York City wages to equivalent workers living in lower cost areas). This is a longer-term play since it will be difficult for organizations to retract salaries for existing workers who are now working from home, but relevant as they begin to recruit new workers working in other regions.
  • Work/life balance: Workers have a newfound opportunity to find a better balance between their work life and their home life. Some workers are reporting more family time, exercise, and better diets.
  • No commute: Those who are able to work from home can eliminate their commute time, and all associated transportation costs.
  • Meetings: No in person meetings…but still plenty of online ones!
  • Health: Clear health benefits for workers (less COVID exposure risk).

There are also some negative challenges to working from home:

  • Meetings: More virtual meetings. In fact, many remote workers are starting to report “Zoom fatigue” because of the number of virtual video conferences they now attend.
  • Team building: It is more difficult to build and maintain teamwork, camaraderie, and creativity with remote workers and teams.
  • Productivity: Lingering concerns about productivity from some managers.
  • Work/life balance: Ironically, some workers report they are having a hard time balancing work and home life with home distractions like cleaning, maintenance, and childcare. Also, many workers are now putting in several extra hours a day because their commute has disappeared, and as a result are having trouble separating work from their personal lives.
  • Managing remote workers: Managing remote workers is more challenging, and is a skillset most managers have not yet perfected.
  • Worker privacy: Loss of worker privacy as employers increase their monitoring activity of remote workers.
  • Technology: Increased technology cost and infrastructure support complexity

Implications and Trends for Leaders

For organizational leaders thinking about the world of work and making VUCA strategic plans for the future the above pros and cons are worth thinking deeply about. In addition, there are a number of implications and interesting trends to keep an eye on, as these scenarios will likely have an impact on future workforce planning.

  • More remote workers: Many experts predict up to 50% of the workforce could work remotely. Moving forward, more organizations will leverage the work-from-home experience and embrace remote work. The enlightened ones will realize it can also deliver many productivity and psychic benefits to the worker, the less altruistic might do it purely for cost savings and access to cheaper labor.
  • Workforce design: Individual contributors, those who perform routine tasks and can be autonomous, and those who don’t need to collaborate in person with co-workers are well suited to working remotely.
  • Contingent workforce growth: Gartner research reveals that 32% of organizations replaced full-time employees with contingent workers as a cost-saving measure. Gartner analysis goes on to predict that organizations will continue to expand their use of contingent workers to maintain more flexibility in workforce management post-COVID-19.
  • Trust: If employers don’t figure out how to trust workers to work when they’re working remotely it will increase burnout, hurt morale, and ultimately lead to turnover.
  • VUCA-proof the organization: We are entering a new era of uncertainty, often characterized as VUCA (volatile, uncertain, complex, ambiguous) which makes strategy formulation and planning much more challenging. One proven tactic is to transition from designing for efficiency to designing for resilience.A 2019 Gartner survey focused on organization design found that 55% of organizational redesigns were focused on streamlining roles, supply chains and workflows to increase efficiency. While this approach captured efficiencies, it also created fragility and weakness, as systems became less robust and lost flexibility to respond to disruptions. Resilient organizations were better able to respond and quickly change course.
  • Culture: Eliminating in person contact and many of the casual interactions workers have in the office runs the risk of organizational culture loss/degradation.
  • Geographic worker dispersal: Technology-enabled remote working will drive an exodus out of historically job-rich, but high cost of living, urban areas like the San Francisco Bay Area and New York City. It has been reported that more Americans would like to live in rural communities than would like to live in cities. An interesting longer-term impact will be on home construction as houses will need more dedicated WFH space and tech infrastructure to accommodate home workers.
  • Time block work: Managers should think about how to re-design and structure work so that it can be performed in specified blocks of time. This becomes especially important for workers who have children at home. This structure will help workers to manage their home/work boundaries better by establishing more defined work periods before switching to domestic and caring duties.
  • Projectize the work: A related concept is the very nature of work itself will change. Once you start to revisit where work gets done, you can also revisit who does it, and how it is packaged. I think more work will be structured as projects (new verb: projectize!), with a focus on outcomes and deliverables, versus the traditional role based work output. This will help to build more responsive organizations, with roles designed and structured around outcomes to increase agility and flexibility and formalize how processes can flex. Also, related to this concept, is the guidance to make sure you provide employees with varied, adaptive and flexible roles so they acquire cross-functional knowledge and training.
  • Employee policies: Working from home will be an option for some but not all workers. Some organizations must have workers come in (for example, healthcare, factories, distribution, retail) others might not need to (most white-collar professions). Organizations will need to think carefully about the implications of their policies, carefully balancing the needs of the business with what workers want. Providing options and flexibility will be an important talent attraction and retention tool.
  • Force worker interaction: Beyond forcing all participants to contribute on a Zoom call, managers need to think about how to design events and interactions that foster sociability. This could include virtual coffee breaks, and social events. These types of casual encounters foster camaraderie, reinforce empathy, and build trust within teams.
  • Videoconferencing: Adoption of videoconferencing technology (Zoom!) has been rapid. As more of us learn how to manage our days remotely and more of our business interactions through video, it will be natural to continue doing so even when we are able to meet in person again. Many organizations are learning this technology lends itself better to reporting and management meetings than it does to strategy and brainstorming meetings. This will have interesting long-term implications for business travel and traditionally heavy travel dependent professions and organizations.
  • Technology-enabled: Another aspect to working virtually will be broader and deeper adoption of software to improve collaboration for distributed teams, store and share work artifacts, and manage remote workers. In parallel, with so much work being done outside of the traditional secure office environment, spending on security software will definitely grow in volume and importance in order to protect the organization. Another key learning is that many routine jobs are at the lower end of the pay scale, and employers can’t assume that employees have computers or internet access that match what is available at an office.
  • Talent scarcity: I predict that once we move past the pandemic (i.e. have a vaccine and widespread immunization) and all the economic devastation has been absorbed and cleaned up, that we will enter a new era of talent scarcity. This will likely take 24-36 months to play out. Those organizations who have figured out the new world of work, including how to support and enable a remote workforce, will be set up to find and attract the talent they need.
  • Practice humanity: I saved the most important consideration for last. Enlightened organizations have recognized the humanitarian crisis of the pandemic and prioritized the well-being of their employees and treated them with compassion as human beings. Unfortunately, some have pushed employees to work in conditions that are high risk with little support – in effect treating them as workers first and human beings second. There is great short- and long-term risk in dehumanizing workers. Smart organizations will work towards equity and inclusiveness, striving to treat all their workers fairly.

Conclusion

Where will this all end up? What will the workplace of the future look like? Who knows – predicting the future is always a tricky business!

One thing is more certain: the truth, as always, will probably end up somewhere in the middle:

  • Will every worker in every organization be able to work from home or remotely? – Not very likely.
  • Will more people be able to work from home or remotely? – Yes.

This will take some time to work out. We have to remember that this started as a crisis-induced work from home experiment. Many organizations are now starting to think about the issue more intentionally.

Leaders of strategic organizations will recognize that there is no single universal answer. It is highly situational. Depending on their organization, workforce, industry, markets, etc. it will likely be a combination of new workforce strategy, updated policies, job redesign, and technology.

I hope that this happens quickly, as there is still the lurking question of if we will see a wave 2 of COVID-19? And even worse, is there a COVID-20 lurking around the corner? What then? Leaders should be thinking now about possible responses to these scenarios today.

-Onward

Have We All Been Swimming Naked?

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“You only learn who has been swimming naked when the tide goes out…” – Warren Buffett

This is one of my favorite quotes. Yes, it is a bit folksy, but the underlying truth it reveals is very powerful when you think about it.

It applies perfectly to the current pandemic crisis, which has exposed a number of vulnerabilities in our global and local economies:

  • For many individual workers it has revealed significant issues like the lack of job security, access to affordable healthcare, and not having enough personal savings to survive any gaps in income. I hope in the upcoming post-COVID environment that our politicians, government agencies, and business leaders work together to find solutions for better job protection and security, universal healthcare, and “living” wages for workers that line up with the actual cost of living.
  • For many organizations, it has revealed issues like weak business models, undercapitalization, and foundational flaws in global supply chains…which is the topic of this article.

Caveat: Before sharing the rest of this article with you, and in full disclosure – I am not a supply chain professional. However, I have had a lot of exposure to the “procurement” function in my career…as a buyer, a supplier, partner, collaborator, and consultant. In addition, I have many procurement professionals as friends and business colleagues…hopefully I don’t embarrass myself too much by swimming outside of my lane!

We Have Over-Optimized

Here is my thesis: across almost all categories of spend I believe we have “over-optimized” most supply chains for goods and services, in both direct and indirect categories.

What do I mean? In our relentless push to drive efficiency in delivery, and shave every marginal cent in cost we have inadvertently gone too far. The result: we have created at-risk and unhealthy supply chains that are unable to absorb a shock and still deliver goods and services when and where organizations (and consumers!) need them.

This didn’t happen overnight.

In the years following the financial crisis of 2008/09 we have been moving closer and closer to the edge, pushing the boundaries of business prudence in the name of growth and investment returns. In a never-ending quest for greater efficiency, we have cut too deep. Empowered by technology driven efficiencies, we didn’t think enough about external disruptions. Our emphasis on instant gratification and short-term gains means we have not paid enough attention to mitigating long-term risks. Companies thrived and stock markets soared to new heights – with no thought about how we had undermined the resiliency of our economy or companies, no thought about “what if” we were hit with a significant global crisis.

We have been short-sighted: The disruption caused by the pandemic crisis has exposed us as swimming naked.

VUCA Disruption

When a VUCA shock like COVID-19 hit us, global supply chains were caught flat-footed, too slow or unable to respond appropriately. This is not a failure of markets, but rather a failure to account for VUCA forces in our never-ending game of optimizing the balance between supply and demand.

Profit maximized and stable markets just don’t work very well in times of crisis.

Despite our best intentions, the “system” does not have enough slack to survive a shock like the one we have just experienced. It is too complex, and not agile or resilient enough, to pivot quickly. In addition, many suppliers of both goods and services have seen their margins ground so finely over the years that they are not financially able to invest in excess capacity or inventory in case of an emergency. Hence shortages of toilet paper, face masks, and testing swabs.

As we are now learning the hard way. It turns out that redundancy, security and resilience are pretty good things to have when times are really bad.

Complexity and Crisis-induced Changes in Behavior

The global economy, and all its constituent supply chains, is a complex beast. Unfortunately, accommodating a shock wave like COVID-19, and the eventual restart, are not going to be as simple as flipping a switch.

There are a huge number of organizations, workers, and consumers within each industry and each market. Because all these entities are not perfectly aligned, each has its own supply and demand curves, and shut-downs or ramp-ups won’t be coordinated, the result will be chaotic. This state of flux will likely go on for a significant period of time, perhaps the next several years.

This also applies to the human capital supply chain: Organizations across many industries that had staffed up for the never-ending boom, have had to quickly cut their workforces to line up with demand that has fallen off a cliff.

Changed consumer behavior will dramatically complicate any recovery. Coming out of this crisis, where every industry has been disrupted and over 30 million US workers have lost their jobs, there is no way we will revert to how things were before. There will be many fundamental changes, for example: More workers will be working remotely, traveling less, eating out less often, spending less on non-essential goods and services, and hopefully saving more.

This will have a profound impact on our economy. In addition, it will result in extremely volatile and unpredictable supply and demand patterns across every industry and market.

Supply chains that have been optimized to be “lean” in a stable economy are now at risk. Quick cycle times, low reserve inventories, and just-in-time delivery work great when you have predictable data on supply and demand. With the VUCA uncertainty and disruption in the marketplace now, that advantage is gone. Likely forever.

A Challenge for Procurement (and Business) Leaders

So where do we go from here?

This crisis has shown us that rapid and significant changes to supply or demand can jeopardize the viability of an organization. A radical shock like COVID has severely tested and exposed many continuity plans.

All the marginal dollars that were saved in grueling price negotiations don’t mean much if you can’t keep the business open. Perfectly tuned just-in-time supply chains don’t mean a thing if demand drops to zero.

If you are a supply chain strategist, procurement professional, or any business leader for that matter, it is a great time to re-think how your business operates in a VUCA world. There are many strategic questions to consider, including:

  • How can you optimize your supply chain, while still leaving enough slack to handle surprises?
  • What demand-side changes should you consider in your planning?
  • How much redundancy and excess capacity should you have?
  • Are you investing enough in collaborating with your suppliers as true business partners?
  • What services should you outsource, versus insource?
  • What does your workforce of the future look like? Is there a better, more flexible and agile mix of employees and contractors?
  • Do you have enough cash reserves to weather a significant storm?

Conclusion

If we agree that VUCA disruption is likely the new normal, then procurement leaders will need to collaborate better with their suppliers and internal business stakeholders to build more agility and flexibility into their sourcing strategies for all goods and services. This will ensure healthy supply chains that are better able to meet rapidly changing and unpredictable demands.

Envisioning the New World of Work…

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“Close scrutiny will show that most ‘crisis situations’ are opportunities to either advance, or stay where you are.” – Maxwell Maltz

There is little doubt that every organization in every industry will be permanently altered in some way from the COVID-19 pandemic crisis.

In prior articles, I’ve shared that crisis can create opportunity, and we now live a VUCA (volatile, uncertain, complex, ambiguous) world. There are still many things we don’t know and need to figure out, however there is also a growing realization that we have a very limited capacity to keep things locked down.

Against this backdrop, local and federal governments around the world are making urgent plans to loosen shelter-in-place restrictions and re-open their economies. Organizations are also considering how they can resume operation and safely bring their workers back to the workplace. Many of these considerations are centered around the world of work: the nature of work itself, the workforce, returning to work, the workplace, and the organization.

Having spent the past 20 years providing human capital management solutions to enterprise clients, and having a front-row seat to the evolving world of work, here are my thoughts on what the new normal might look like:

The work

  • Work from home. It’s here to stay. Forced by mandatory shelter-in-place orders, organizations quickly figured out how to provision and enable large numbers of formerly office-bound workers to work remotely from their homes. There are many crisis-related reasons why this hasn’t been perfect (for example, children at home due to school closures, internet bandwidth, etc) but the bottom line is it has largely worked, and will grow in prominence.
  • Remote work. Moving forward, more organizations will leverage the work-from-home experience and embrace remote work. The enlightened ones will realize it can also deliver many productivity and psychic benefits to the worker, the less altruistic might do it purely for cost savings and access to cheaper labor.
  • Projectized work. A related thread is the very nature of work itself will change. Once you start to revisit where work gets done, you can also revisit who does it, and how it is packaged. I think more work will be structured as projects (new verb: projectized!), with a focus on outcomes and deliverables, versus the traditional role based work output.
  • Videoconferencing. Obviously, videoconferencing technology adoption (thanks Zoom!) has been greatly accelerated. As more of us learn how to manage our days remotely and more of our business interactions through video, it will be natural to continue doing so even when we are able to meet in person again. This will have interesting long-term implications for business travel and traditionally heavy travel dependent professions (hello management consulting!)
  • Technology-enabled. Another aspect to working virtually will be broader and deeper adoption of software to improve collaboration for distributed teams, store and share work artifacts, and manage remote workers. In parallel, with so much work being done outside of the traditional secure office environment, spending on security software will definitely grow in volume and importance in order to protect the organization.

The workforce

  • PTSD. I’ve heard people joke about the impending COVID baby boom (we’ll have to wait and see!), but on a more serious note I think there will be a wave of Post-Traumatic Stress Disorder (PTSD) from this crisis. Very few have lived through anything this stressful and impactful in our lifetime. There will likely be lingering effects that require assistance from mental healthcare professionals, and accommodation from employers.
  • Non-employee labor. The growth of the contingent workforce has been a long-term trend over the past two decades. It will take a huge hit in the short-term (temp labor is always the quickest and easiest thing to cut first), however in the long-term it will grow due to a number of the trends cited in this article: more project-based work, more remote workers, better technology to manage work, and the need for more flexibility by organizations.
  • Worker protection. With the dramatic growth of the “gig economy” over the past few years there has not been enough attention given to the pervasive issues around protecting the self-employed, independent contractors, or gig workers. Access to affordable healthcare, unemployment insurance, wage and hour protections are just some of the issues. Ironically, the CARES relief package that Congress passed might actually break new ground on this issue and lead to better legislation. Could it ultimately lead to the mythical “third class” of worker sitting in between employee and independent contractor status? We’ll have to wait and see!

Returning to work

  • Re-start sequencing. Here in the US it appears that individual states and counties will each craft their own re-start plan. It will likely be done in successive waves of workers re-entering the workplace, defined by geography and industry, with the most essential given priority. I’m wondering if this process will set precedent for a new “class system” within the economy. For example, who defines what’s essential? Are dog groomers more or less important than hairdressers? Dentists versus dermatologists?
  • WFH. It has been estimated that 42% of US workforce could work from home (i.e. they’re not tied to a location specific factory or service job) – what if all of them don’t want to go back to the office? Once the economy picks back up many professionals will be thinking of this. This will be complicated because the decision probably depends on many factors, including their family and housing situation, commute, role, age, mobility. A recent survey of HP employees indicated 87% would like to keep remote working. Wow!
  • Commuting. Related to working from home, this deserves a special call out. Many have seen their daily commute radically changed from several hours a day to just a few steps from the bedroom to a home office. We’re already seeing that these extra hours can have a profound impact on productivity, work-life balance, and the environment. NYC has reported a decline in subway ridership of 90%, you have to wonder how much it will come back.
  • Living patterns. Technology-enabled remote working will likely drive an exodus out of historically job-rich urban areas. It has been reported that more Americans would like to live in rural communities than would like to live in cities.
  • Work schedules. Changes to commuting patterns, travel patterns, and living patterns may lead to changes in work schedules. Will we see more flexibility around days worked, and schedules?
  • Immunity certification. Widespread testing is a key component of managing the pandemic and safely restarting the economy. It makes sense that workers should have a clean bill of health in order to set foot in an office, factory, or airplane. But, how will this work? Will there be health certification cards? Who will issue, monitor, certify them? How will your personal health information be protected? Many questions, few answers so far…

The workplace

  • WFH policy. Working from home will be an option for some but not all workers. Some organizations must have workers come in (for example, healthcare, factories, distribution, retail) others might not need to (most white-collar professions). Organizations will need to think carefully about the implications of their policies, carefully balancing the needs of the business with what workers want. Providing options and flexibility will be an important talent attraction and retention tool.
  • Workstations. One likely outcome is that the much-hated “open office” workplace will revert to more traditional cubicles or enclosed offices. Companies will need to provide more flexible “hoteling” options for their workers. One positive benefit is there will be less capital intensive real estate needed for the organization to operate!
  • Work rules. It is likely that social distancing will be a new norm. How will this be accommodated in a work setting? The impact could be huge when you think about the physical challenges of hallways, meeting rooms, restrooms, elevators, and cafeterias.
  • PPE. Will workers have to wear masks and other forms of personal protection equipment? Will the type be mandated? Bring your own, or provided by the organization? How will the organization ensure a properly sanitized and “safe” working environment?

The organization

I’ve saved this section for last, because organizational issues will likely prove to be the most difficult.

  • People first. They say that great leaders are forged in battle, and this pandemic has proved it. For me it has re-affirmed what many exceptional leaders already know – it is all about the people. Demonstrating empathy, compassion, and clear communication to workers will hopefully become part of every leaders toolkit moving forward.
  • The value of HR. Organizations will need to re-invent themselves and focus more on “the business of the business”. This is an excellent opportunity for corporate HR and legal teams to rise up and really demonstrate their value as change agents, protectors of the enterprise, and designers of the future organization.
  • Policy updates. Organizations will be forced to revisit (or, more likely, develop entirely new) policies that address such vital new issues as COVID testing, social distancing, who can or cannot work remotely, travel, expenses, etc.
  • Workforce planning. In a new and more uncertain (VUCA) world of work, many organizations will begin to revisit their structures, and workforce composition. Needing greater access to talent, and more flexibility, organizations will seek to better optimize the mix of employees and non-employees of all stripes (temp labor, contractors, gig workers, etc.)
  • Remote management. Organizations will need to re-think the physical logistics of how they manage the entire worker lifecycle, developing new ways of interviewing, onboarding, training, managing, and offboarding workers who are now working remotely.
  • Legal minefield. The U.S. Chamber of Commerce shares that businesses are anxious about a wave of lawsuits from customers and workers who contract COVID-19 in the workplace. Customers and employees can sue a business for lost wages, medical expenses, and other damages if they prove negligence, recklessness, or intentional disregard for their safety. Some recommended precautions could run up against workplace protection laws, such as: Telling other employees when someone is sick (privacy violation), Requiring workers to test negative before coming back (discrimination and health privacy) and, Prohibiting at-risk populations like the elderly from coming to work (more discrimination)

Wow! That’s a lot…

A crisis of this magnitude will surely create and accelerate dramatic change in the broader world of work. It could easily take 12-18 months, or more, for the full post-pandemic picture to emerge – a status likely determined by the widespread availability of testing, no major new outbreaks, and a vaccine.

An important component of strategic planning is to start with what you know (both good and bad) as the foundation for planning a path forward. I hope that this article has provided some perspective for you and your organization to start planning for the new world of work. With this foundation in place, you can begin to consider contingencies for various scenarios that may or may not become reality once things get moving.

Much, much more to come…

-Onward