Several months into a global pandemic, leading organizations are redefining expectations of what is possible. Consider how offices around the world shifted virtually overnight to digitally enabled remote work. Grocery retailers and restaurants rolled out new pickup and delivery services. Hospitals rapidly expanded telehealth options. Automakers, apparel makers, and mobile phone assemblers retooled on the fly and are now rushing out personal protective equipment and ventilators.mitsolan
The tremendous public health and economic impact of the coronavirus pandemic has raised the global standard for efficiency and innovation. The world can’t magically go back to the way things were before. The resilient corporations that find success in the future will be those that can continue to turn on a dime as nimbly as they have during the early months of the pandemic.
This shift is spawning a new breed of company — more capable of thriving in uncertainty with a clearer and broader sense of purpose. Corporate superstars will be able to continue to motivate people around a common goal even after the health crisis and through economic hardship. They will recalibrate quickly in response to megatrends, expand beyond traditional business lines through partnerships, and improve their performance along broader environmental, social, and governance metrics.
In recent months, we’ve had discussions with dozens of the world’s top chief executives on how to build a better future. We found that companies showing the most agile and resilient responses to the crisis are pursuing four main strategies.
Transparency: Our world will become even more open — and less private. It’s hard to imagine that the trend to track everything will be going anywhere but in one direction: a radically more open world. The amount of information collected on every person, product, and organization will grow exponentially, and the pressure to share that information — with customers and consumers in particular — will expand. The tools to analyze information will be well-developed and will make some decision-making easier; for instance, it will be easier to choose products with the lowest carbon footprints, highest wages for employees, and fewest toxic ingredients. But all these tools will shatter privacy in the process.Andrew s.wington
Resource Pressures: We will be forced to more aggressively confront resource constraints. To keep volumes of major commodities (such as metals) in line with economic growth, we will need to more quickly embrace circular models: sourcing much less from virgin materials, using recycled content and remanufactured products, and generally rethinking the material economy. Water will be a stressed resource, and it seems likely that many cities will be constantly in a state of water shortage. We will need more investment in water tech and desalination to help.
Clean Tech: The transformation of our grid, our roadways, and our buildings to zero-carbon technology will be surprisingly far along. Here’s some good news: Due to continuing drops in the cost of clean technologies, renewable energy is dramatically on the rise, making up more than half the global new power capacity every year since 2015. By 2030, effectively no new additions of generating capacity will come from fossil-fuel-based technologies. Electric vehicles will be a large part of the transportation equation: While estimates about the share of EVs on the road by 2030 range from the teens to nearly 100% (assuming early retirement of internal combustion engines), nearly all sales of new vehicles will be EVs. This will be driven by dramatic reductions in the cost of batteries and strict legislation banning fossil-fuel engines. We will also see an explosion of data-driven technologies that make buildings, the grid, roadways, and water systems substantially more efficient.
Technology Shifts: The internet of things will have won the day, and every new device will be connected. Proponents of the “singularity” have long projected that by around 2030, affordable AI will achieve human levels of intelligence. AI and machine learning will plan much of our lives and make us more efficient, well beyond choosing driving routes to optimize traffic. Technology will manipulate us even more than it does today . AI will create some new kinds of jobs but will also nearly eliminate entire segments of work, from truck and taxi drivers to some high-skill jobs such as paralegals and engineers.
Global Policy: There’s an open question about how we’ll get important things done. I’m thinking specifically about whether global governments and institutions will be working in sync to aggressively fight climate change and resource pressures, and tackle vast inequality and poverty — or whether it will be every region and ethnic group for itself. Predicting politics is nearly impossible, and it’s hard to imagine how global policy action on climate and other megatrends will play out. The Paris Agreement was a monumental start, but countries, most notably the U.S., have lately retreated from global cooperation in general. Trade wars and tariffs are all the rage in 2019. It seems likely that, even more than today, it will be up to business to play a major role in driving sustainability.
How Should Business Prepare?
Laying out strategies for companies to navigate this likely future world is a book-length conversation. But let me suggest a few themes of action to consider:
- Engage everyone in the sphere of the business world on climate. A dangerously changing climate is the biggest threat humanity has ever faced. But it’s not all set in stone … yet. Companies have an economic incentive and moral responsibility to work hard to reduce the damage as much as possible. Engage employees (stamp out climate denial), talk to consumers and customers about climate issues through your products, and change internal rules on corporate finance to make investment decisions with flexible hurdle rates that favor pro-climate spending. Most importantly, use influence and lobbying power to demand, at all levels of government, an escalating public price on carbon — and publicly admonish industry lobbying groups that don’t.
- Consider the human aspect of business more. As new technologies sweep through society and business, the change will be jarring. Those changes and pressures are part of why people are turning to populist leaders who promise solutions. Business leaders should think through what these big shifts mean for the people that make up our companies, value chains, and communities.
- Embrace transparency. To be blunt, you don’t have a choice. Each successive generation will expect more openness from the companies they buy from and work for.
- Listen to the next generation. By 2030, the leading edge of millennials will be nearing 50, and they and Gen Z will make up the vast majority of the workforce. Listen to them now about their priorities and values.
Predicting the future means projecting forward from what’s already happening, while throwing in expected inertia in human and natural systems. It can give us an impressionistic picture of the world of the future. Our choices matter a great deal, as individuals and through our organizations and institutions. Business, in particular, will play a large role in where the world goes. Employees, customers, and even investors increasingly demand that the role of business be a positive one.
Look, we could all just wait and see where these historic waves take us. But I prefer that we all work proactively to ensure that a better, thriving future is the one we choose.
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