COVID-19: Living in a VUCA World
We are now living in a VUCA world — volatile, uncertain, complex, ambiguous — a term introduced in 1987 to describe the post-Cold War world, which is gaining new relevance today as a way to characterize the current environment.
Our era will come to be defined by a fundamental divide—the period before COVID-19 and the next chapter of normal that will materialize post-pandemic.
This new “next normal” will be marked by a dramatic restructuring of how business and society operate. The novel coronavirus has become the gas pedal for one of the greatest workplace transformations in our lifetime—changing how and where we work, shop, communicate, learn, and connect. Already, there is debate and discussion about what this next normal will look like, and how markedly the woof and warp may differ from the former fabric of our lives.
We know the bad news: The U.S gross domestic product or GDP fell 4.8% in January to March 2020 in comparison to the previous quarter. The U.S. economy has contracted at its fastest rate since the Great Recession of 2008 due to social distancing measures effectively shutting down the country, ending the longest-running expansion in American history. And there is likely more bad news to come before the good, as widespread layoffs and business shuttering did not hit until late March for most of the country. Consumer spending has dropped precipitously, and unemployment numbers from April soared to 14.7%, the worst since the Great Depression. 20.5 million people lost their jobs in April alone according to the Labor Department, eradicating a decade of employment gains in just one month. To put into context: “this is roughly double what the nation experienced during the entire financial crisis from 2007 to 2009,” reported the Washington Post.
Yes—challenge has ensued. But tucked into this specter of unparalleled disruption exists opportunity.
In VUCA times, people’s routines and purchasing habits go out the window, opening up opportunities to businesses who can invest in new tech and pivot operations to quickly adapt to the changing landscape. Some companies will flourish, new ways of working and technologies will arise, and the world of hiring and recruitment will undergo a virtual transformation of its topography. The pandemic has propelled new technologies across all aspects of life at an unprecedented rate—from remote working to e-commerce to virtual learning platforms to wide adoption of video conferencing for both work and social purposes—and these new working, learning, and communication modalities will likely become a permanent part of our next normal.
The seismic impact of COVID-19 means that many industries will have to rejigger their entire supply chain at a time that global supply chains face disruption in multiple geographic points. According to a recently released McKinsey report: “We could see a massive restructuring as production and sourcing move closer to end-users and companies localize or regionalize their supply chains.” Companies able to bridge the weakest junctures in this chain will be the ones most readily equipped to return to hiring, training, and attaining former levels of productivity. Nimble and resilient will become the adjectives du jour—necessary to recompose the structure of our economy.
The current landscape is characterized by freezes AND spikes in demand.
COVID-19 is affecting all industries—though some more than others. Social distancing and shutdowns have frozen some businesses while others are seeing marked spikes in demand. A number of the United States’ largest retailers are hiring tens of thousands of workers to meet the demand for food, medicine, and other necessities. Grocery stores, pharmacies, and food delivery chains have been ramping up hiring. In the wake of COVID-19, tech-backed businesses in education, digital health, gaming, content, and telecommunications have also seen a bump in numbers. Market research and data science agencies, consultancies have reported furloughs and layoffs while others are hiring.
Treat this time as a pause or a delay – not a full stop.
We are in a state of suspended economic animation—together with its citizens, the American economy has been sheltering in place. To help contain the spread of COVID-19, a substantial halt in activity was necessary from a public health perspective for a period of time. The “future of work” seems to have arrived even sooner than anyone had anticipated. As social distancing is likely to continue in some way until the development of a vaccine or the discovery of a viable treatment, familiar processes such as face-to-face interviews and job onboarding will, at least for a time, likely continue to be conducted virtually.
Companies are dancing a delicate line between facing hard truths about revenue and the ensuing need to make tough decisions like whether to furlough employees, enact pay cuts, or make layoffs—with the need to protect the health of their workers and brand reputation. In this time of suspended animation, one route businesses are taking with hiring is to delay the process. Instead of stopping hiring altogether, some companies are conducting video interviews, and aggregating top picks as they wait for signs that things are on the mend. Some experts posit that this may be the best possible thing to do—treat this time as a pause or a delay—not a full stop.
Forward-looking business leaders know, however, that investments must be made—people are the most important asset for any company—and some of the most impactful hires have historically been made during market corrections. The risk is not necessarily the recession itself, but rather, the risk is not having top-tier staff to advance your company out of a downturn into the next normal. According to the Harvard Business Review, hiring talent was, until recently, the number one concern of CEOs, and a top concern of those in the executive suite.
We don’t know when the shutdowns and mass quarantines will end—but they will end. The United States has been through many challenges—from the Great Depression, wars, 1918 Spanish Flu pandemic, to the 2008 recession—and has always emerged stronger and more robust than before. The current COVID-19 crisis may similarly turn out to be a moment in history that pushes us to create better, more inclusive, and sustainable opportunities.