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On Tuesday, one of our major UK retailers, Marks and Spencer, announced job losses and a “material shift in trade”. For them in-store sales of clothing and home goods were “well below” 2019, although online and home deliveries were strong. Store sales were down 47.9%, but online surged by 39.2%. The chain also explained that during the crisis it had showed it could work “more flexibly and productively”, with more staff multi-tasking and moving between food, clothing and home departments. Then today national retailer Frasers Group, formerly Sports Direct International, reported that it will be investing more than £100m into its digital strategy as profits take a 20 per cent fall. These are just two firms’ stories in one industry sector, but it highlights a permanent shift that means more online retail activity, and less high street footfall. These herald a change in location and travel patterns that are common threads connecting the big shift we have all just experienced. The behaviours and factors at play are creating change and uncertainty across most industries as every person in every organisation in every country was forced to deal with up to 6 months of lockdown, and for many knowledge workers a shift to home working. Now we move into a new phase as the restrictions are beginning to be lifted in a variety of ways, successfully and unsuccessfully, across the world. In this piece we will avoid the NN words.
Centralised corporate offices and their associated workplace design have been evolving slowly over decades, but those various trends suddenly came to a disruptive pause and redirection as most countries went into lockdown. I was speaking to JP Rangaswami (ex MD of BT Design, Chief Scientist at Salesforce, Chief Data Officer at Deutsche Bank, but now retired) on a live stream show recently. He explained the change so simply:
Suddenly work was something you did, and not somewhere you went”
Offices have stayed empty for months as knowledge workers regained their commute time and discovered the effectiveness of working from home, using collaboration tools that many had never touched before. Some organisations have handled the change well, some haven’t. and the technology infrastructure has held up remarkably well for such massive transformations happening simultaneously. There are many lessons being learned, but there is no doubt that this will result in some permanent changes in behaviour. There will be significantly more home working than before. There will be less commuting to offices in big cities. There will be less travel from site to site, or country to country to hold a face to face meeting, as the effectiveness of a Zoom call and other virtual meeting platforms take over some, if not all of that type of business activity. Zoom may be new for many, but some have been using tools like Webex, GoToMeeting or more recently Microsoft Teams for years. Too many organisations are still trapped in their inbox, using mail and attachments for collaboration, although smarter organisations have been using enterprise social networks and other asynchronous collaboration tools for over a decade. Getting all of the elements of the digital workplace right, along with what we’ve learned about effective enterprise collaboration, will be topics we’ll be devoting more time to in this series.
In any case the lockdown restrictions and social distancing have had a dramatic effect on air travel, whether for business or pleasure. The value of personal contact will never be lost, but the last few months have proven the effectiveness of virtual meetings, and that will definitely change business travel too. All of these factors will lead to a rethink of what the office is actually for. We are proving that working from home works, but there are still times when a physical meeting is necessary, and in any case we need to think of new ways to achieve those coffee machine and water cooler moments of interaction that can be vital for serendipity, creativity and cross functional innovation. The long-term impacts on employee well-being and mental health have yet to be experienced. In the short and medium term, until we get a vaccine for COVID-19, social distancing, and new health and safety procedures will mean reduced capacity in our office spaces in any case. The most likely outcome will be a move away from centralised thinking to a much more distributed and local approach to workplace planning.
It’s not just the office that’s affected. Education will be different too. From universities to schools there will be a shift to more remote and distance learning and this may well impact the more subtle benefits of being in an educational institution – “education is what remains after you forget everything you’ve been taught”, as Einstein almost said. The disruption to business and transport, combined with the US China trade war, are also leading to a rethink of the world’s supply chain. Organisations will start to think in terms of multiple sources of supply, and plan for business resilience in a different way. All of this will have an effect on travel, transport and distribution.
As people travel less to the high street, do less commuting to big cities, and plan different travel to the office and meetings, that will mean less investment is needed in future transport infrastructure. Major initiatives currently underway or in plan for rail, road and airports will need to change, and maybe those investments should be shifted to 5G or addressing the urban-rural digital divide. Plans on handling road congestion will be different. The travel industry itself has been drastically affected as the world’s holiday plans were put on hold, with flights, cruises, and hotels suddenly empty. Every airline’s business was dramatically reduced overnight. The change in capacity required will have long term effects on competition and pricing for air travel and the industry as a whole. There will also be changes in individual travel habits, with a likely shift to more personal forms of transport on bikes or in cars to avoid public transport and crowds. Any crisis presents opportunities. These significant changes in air, rail and road traffic will have a substantial impact on carbon emissions and the environment. As a consequence, that could give us more breathing space to tackle the potential next disruption that is Climate Change, although we might have to deal with another pandemic before that.
Working from home, taking local rather than International holidays, less face-to-face meetings of all kinds, different shopping habits, different use of public transport, as well as the types of transport we plan to use – they will all have a combined effect. Will this reverse the trend of urbanisation that has been advancing for decades? Will there be a shift from cities to smaller towns and villages as people realise work for many of us is, like JP said, what you do and not a place you go? We can see many positives for individuals and employees, but probably only as long as our leaders, managers and organisations do a better job of considering their workforce as people first, and workers second, along with planning for business resilience to tackle the uncertainties to come.
This post is part of our Future of Work series. You can read the previous post, the next post, or find them all in our Future of Work section. If you’d like to discuss how we can help get you prepared for the way work and business is changing, then please contact us.