But will the Next to Normal really just be the Old Normal plus protection? And even if it's possible to do so, should companies really aim to return to the status quo? We think not. We believe that the virus and our reaction to it have accelerated an emerging shift in our conventional ways of doing things. Companies that return to the old ways without understanding that shift is likely to fail.
The truth is that, with a few notable exceptions, our companies, indeed whole industries, have been slow to assimilate the difference that the internet and related digital technologies are making to our world. COVID shone a light on that failure, enabling us to see clearly what the Old Normal actually was, what the Next Normal will likely be, and what companies need to do to bridge the gap.
The first part of this story is simple enough:
- COVID-19 is a virus.
- Viruses are usually spread by physical proximity. They rarely survive for long outside of a living "host."
- One person can infect many people at the same time if they're all in a physical group.
- This means a virus can spread very quickly across a population that likes to form physical groups and where individuals move from group to group.
- In that case, a particularly nasty virus could devastate the entire population.
- To avoid that eventuality, in March 2020 we stopped forming physical groups.
- As soon as we did, tens of millions of people lost their jobs and the economy collapsed more or less overnight,
THE BUSINESS IMPACT OF DECENTRALIZATION
To repeat, as soon as we stopped forming in groups, the economy fell apart. And it wasn't just the economy. Despite all the obvious differences between commerce, education, healthcare, entertainment, travel and hospitality, religion and other institutions, they were all organized in the exact same way; a commercial, cultural and social world based on physical grouping, aggregation, massing, or centralization of employees, customers, students, patients, worshipers, travelers, fans and spectators, old people, prisoners, and others, into controlled environments where the associated functions (employment, commerce, education, healthcare, religion, etc.) took place.
In a nutshell, our economy and our Old Normal were built on and were dependent on centralization.
The second part of the story, the part about our current state, is more complicated. It's complicated because it wasn't planned, intentional, or chosen, and because it isn't "normal." We are, in effect, in an extended state of emergency, an abnormal or exceptional set of circumstances. No one believes that this is a way to run an economy or live a social life.
The negative impact of this limbo or pause between normals on us individually and collectively has been huge. Quite apart from the terrible loss of life and livelihood, we have witnessed a string of business failures and bankruptcies. We have seen disadvantaged communities hit the hardest, and we have all experienced first hand the emotional and psychological effects of isolation and immobilization. And yet there have been notable business successes and other positive outcomes as well, including:
- The rapid adoption of remote communications tools both for business and personal use.
- The acceleration of eCommerce, spearheaded by Amazon, which achieved a 10-year growth in three months according to a recent McKinsey study.
- The accompanying rise in-home delivery services like Doordash.
- The long-awaited emergence of telemedicine.
- The success of the individual fitness and well-being retail sector (e.g Peloton, Lululemon).
- The success of the home improvement retail sector (e.g. Home Depot, Restoration Hardware).
- The phenomenal response by front line workers.
- The explosion in individual creativity and learning.
- The noticeable improvement in air quality.
- The "return" of birds and other wildlife.
The big learning here is it is possible to be successful without being centralized. And, in fact, it seems that it might be possible not only for companies to be successful but also for individuals and even for the environment at the same time. In other words, centralization is a choice, not an inevitability or necessity, and there is an emerging alternative that may be more resilient in the face of a systemic threat.
THE NEXT NORMAL
Which brings us to the third part of our story, the part about what comes next, aka the Next Normal. This part hasn't been written yet and it's the part we're all agog for. But based on what we learned in parts one and two about life before and during the pandemic, here's what we think is likely to happen.
Most companies will instinctively aspire and plan to return to work and resume life as normal. There will be an initial phase, already underway in parts at least, which is about grouping in lower densities while the virus remains a threat but nevertheless returning to the same organizational model as before. And then there will be a gradual "densification" as the number of new cases flattens and reduce until we get to full normality with the widespread availability of an effective vaccine. This path will take months and will not be smooth or linear but it's clear that most are working with that mental model.
And yet we believe that the path to success will increasingly lead away from the centralized model of old and toward the model we have seen emerge most clearly over the last six months or so. This is the model of decentralization, of increasing numbers of employees choosing to work from the home offices they've been equipping recently, of increasing numbers of consumers and business customers continuing to choose eCommerce, of increasing numbers and types of services including medical ones being delivered virtually, of increasing numbers and types of different education and learning models emerging beyond the physical school, of increasing volumes and types of goods, perhaps including vaccines, being delivered to people's homes by distributed fleets of autonomous vehicles. All these things empower connected individuals, reduce friction, and give them increasing autonomy while creating a world of new opportunities for companies.
This all takes digital technologies to enable and support it, a lot of which is already in place or is in development. Most of the major advances in digital technologies for at least the last 25 years have been, and continue to be, in the exact direction of decentralization and distribution (the world wide web, eCommerce, content streaming, internet of things, cloud-based computing, mobile technologies, autonomous vehicles, telemedicine, the blockchain, and the distributed web).
So it's time for our companies and other institutions to catch up to our technologies, to take advantage of everything they offer. To do that, they need to do the following.
They need to stop thinking of technology as a department. Instead, they have to imagine themselves as "being" a kind of decentralized technology, a networked organization of connected, distributed, and autonomous agents (employees, customers, partners, other stakeholders). They need to enable remote or rather distributed working, and therefore they need to move all of their business processes and technologies to the cloud. They need to stop thinking about their customers being at the center of their organization and instead think about everyone being outside.
And, therefore, they need to develop their customer-facing and relationship management systems and capabilities to become finely attuned to what's happening "out there" and to be able to respond with speed and intelligence. They need to reduce friction and increase delight for their customers by fully embracing mobile, voice, and virtual commerce. And they have to re-imagine their identity, which means relying less on a physical location to create a sense of uniqueness and belonging and more on collective purpose and meaning to do so.
This is not to say that all forms of the congregation are dead. Coming together to celebrate, to play, and to worship is a deeply embedded need within us. But in a world of change, disruption, and uncertainty, centralization turns out to be a fragile model. Decentralization appears to be more resilient and more in tune with the needs of individuals as well as companies for success. The Next Normal is decentralization.
Decentralization is a core component of Flow, the new business paradigm that is the subject of a series of articles that I have co-written with Henry King and have published in ZDNet. Other components of Flow include Connection, Integration, Autonomy, Mobility, Continuity, and Holistic Success.
This article was co-authored by Henry King, a business innovation and transformation strategy leader at Salesforce.