With the enforced lockdown pushing companies to implement digital solutions that should have taken years in just a few weeks, Mike Scott assesses the long-term implications, and explains why speed and adaptability are the new business competences

The Covid-19 pandemic has forced changes on everyone, and nowhere has that impact been greater than in the world of work.

The enforced lockdown around the world meant companies had to adapt to remote working pretty much instantly, pushing them to implement solutions that should have taken years into just a few weeks.

“The pandemic has been like an enforced experiment on remote working for pretty much every company in the world,” says Ian Hallett, group managing director at IWG, the parent company of shared workspace provider Regus. “At a stroke, it removed many of the cultural hurdles about having people in the same place so that managers can see them every day of the week.”

People used to say things like ‘you have to be in the room to close the deal’; these axioms have been upended by this enforced transformation

A recent IBM study found that the Covid-19 pandemic had accelerated digital transformation at 59% in the organisations it surveyed, with 66% saying they have been able to complete initiatives that previously encountered resistance.

The pandemic has changed managers’ view of what is acceptable and what is possible, agrees Andi Britt, senior partner, talent and transformation, at IBM Services. “People used to say things like ‘you have to be in the room to close the deal’, ‘this training can only happen face to face’, ‘you have to be up close to people to know what they are thinking’.

“These are all axioms by which we have been doing business for the last 50 years, and they have been upended by this enforced transformation.”

As coronavirus cases receded over the summer, many companies started to plan for a managed return to the office for many workers, but the increase in cases in many markets has put that on hold. What is clear, though, is that when we do go back, the offices that we return to will not look the same as before, and will not be used in the same way.

Even before Covid-19, there was a shift towards a more agile model of working, based on how and where people work, according to the consultancy Arcadis.

The workforce of the future will be much more dispersed than pre-Covid, working to a distributed, hybrid model. Some people will never want to return to the office and will want to work only from home, while others will be desperate to get back as soon as they can. Others will want to go back to an office but not necessarily the one they used to work in, so there is likely to be an increase in the use of shared workspaces of the type run by Regus and WeWork.

We’re seeing the workforce disperse over a wider area. Second-tier cities and towns are becoming far more popular

IWG has recently raised more than £300m so that Regus can expand its network of offices. “We have seen demand rise in some unexpected places,” says Hallett of Regus. “There has been a 90% increase in Uxbridge, on the outskirts of London, and a 114% rise in Plymouth. We’re seeing the workforce disperse over a wider area. Second-tier cities and towns are becoming far more popular.”

And the coronavirus crisis may have come as a blessing in disguise for WeWork, which has a portfolio of more than 800 buildings in 35 countries. The company last year was forced to cancel a planned IPO and make thousands of workers redundant after would-be investors pulled back when they saw its loss-laden financials.

The company’s new chief marketing officer Roger Solé told The Drum that the company saw new opportunities post-pandemic to entice businesses looking to downsize. With a marketing slogan “Close to clients. Close to team mates. Close to home,” it is positioning itself in the middle ground between working from home and returning to the traditional office with a monthly membership that allows people to work in any of its locations. Large companies buying passes for their employees accounted for more than 50% of WeWork’s core revenue for the first time in the second quarter of this year, and 65% of new customers in June.

The lockdown saw a huge drop in travel – road travel in the UK fell by 73%, according to Alphabet – and a consequent reduction in local air pollution. Cleaner skies and the temporary abolition of the daily commute were two of the few positive side effects of the virus. “Covid-19 has accelerated changes that were starting to happen in every part of society, suggesting travel habits in the UK are likely to be changed forever,” Alphabet says in its Fleet Streets report, although traffic levels have started to increase as the lockdown eased and pupils returned to school. Nonetheless, few people think that office workers will be returning to their offices five days a week as they did in the past.

It won’t just be about commuting – there will be a rethink about the need to make business trips as well. A group of large businesses in the Netherlands have used the experience of the lockdown to come up with a Flying Guide to to help companies reduce their impacts from travel. The firms, including Unilever, Vattenfall, ABN Amro, Aegon, Deloitte, and Arcadis, pledged to use trains for short trips, use direct flights as much as possible, and use more video conferencing.

“For us, 80% of our carbon footprint comes from travel,” says Martin Silvester, global director for workplace at consultancy Arcadis. “We can cut that figure massively by working from home.”

Companies are having to think ‘what are the use cases where being in an office works better than being remote'

In time, this may have a knock-on effect on commuter towns, which may experience significant growth as people choose to work locally rather than travel.

There are many jobs where a physical presence is essential and people have to travel to work – from hospitals to hospitality, transportation to core manufacturing tasks – and here, employers have had to adapt their workplaces. “Much of manufacturing kept operating during lockdown,” says Dr Mark Parrish, medical director at health consultancy International SOS. “Factories are full of engineers, who will have looked at their production processes and changed them to make them Covid-compliant and fit for social distancing.”

In the office world, landlords are getting to grips with what the new normal will look like. Commercial real estate firm Cushman & Wakefield has developed guidelines based on its experience of helping 10,000 organisations in China. It calls the end result "the 6ft office", which employs large circles and other visual cues on floors to help employees maintain a 6ft distance between each other.

Offices are also likely to have one-way systems to reduce the opportunities for people to bump into each other, in a reversal of what companies wanted their employees to do pre-lockdown in order to foster communication, collaboration and innovation. A lot of work is going into reducing shared touchpoints in areas such as kitchens, copiers and bathrooms. In some offices, such as IBM’s, meetings are currently virtual even if everyone is on the premises.

However, many industries, such as professional and financial services, were able to switch to almost entirely remote working. “We have had to make decisions, innovate and build new products in a virtual environment, and we have seen that when forced to, we can do it,” says Britt of IBM Service.

“Companies are having to think ‘what are the use cases where being in an office works better than being remote'. It tends to be where close proximity allows people to come up with ideas in a team environment.”

People have realised that the time they used to spend commuting can be more profitably spent on their own activities

Arcadis’s survey found that offices will remain important for collaborative working, but will become smaller and more flexible over time.

“Large city centre locations will become increasingly difficult to own and manage,” says Silvester. “This is not just because of access problems in a post-Covid world but because people have realised that the time they used to spend commuting can be more profitably spent on their own activities, whether that is exercise, time spent with their family or even getting more work done.”

However, any savings from reducing office space should be reinvested in technology and virtual tools, he continues. “If you just take the savings and don’t reinvest, you will destroy your culture within six months.”

Companies with commitments to cut their CO2 emissions may anticipate benefits to their carbon budgets from less commuting and fewer offices, but the scientific research on the impact of tele-working on CO2 emissions is very mixed, according to researchers at the Centre for Research into Energy Demand Solutions. Analysing 39 studies across US, Europe, Asia and the Middle East they found that while teleworking may reduce transport generated from the office commute, it may also lead to increased energy use due to greater use of home appliances, heating, cooling, and lighting, as well as a sharp increase in digital services such as videoconferencing and cloud storage.

In an interview with The Ethical Corporation, Vaughan Lindsay, CEO of ClimateCare, pointed out that internet and telecoms use is equal to aviation in terms of CO2 emissions, something that will have dramatically increased with the surge in computer use due to home working. Whether that will outweigh the carbon benefits of less commuting is yet to be calculated, he said. “But what we have seen is that corporates run the risk of outsourcing their carbon footprints. By closing their offices their scope 1 and 2 emissions will drop down dramatically…. But they’ve just displaced that onto individuals” in their own homes, where the impact will be less visible.

The social benefits of home working are similarly ambiguous. On the one hand it can reduce barriers for many to engage in the global workforce. “If you are a new parent and you don’t have to commute, you can go back to work earlier; and at the other end of the spectrum it can help older people to remain in the workforce as well.”

To be productive, people need to be connected to a community, to feel that they can concentrate and have access to technology

Nonetheless, home working does not suit everyone. “A lot of the people in favour of working from home live in nice houses with lots of space to create a nice working environment,” Silvester points out. “If you’re a recent graduate and you’re living in a house with three or four other people who are furloughed and spend all day on the Xbox, it’s quite a different experience.”

If you only work from home, it can be bad for mental health and productivity, Hallett adds. “At some point, people become less productive and less happy because they feel isolated. To be productive, people need to be connected to a community, to feel that they can concentrate and have access to technology.” There is also a danger that people working from home will feel under pressure to work longer hours.

For those companies that do bring people back into the office, the first step is to understand the current state of knowledge about Covid-19, says Parrish of International SOS. “For example, if you want to run a screening programme, you need to test your staff every two weeks to reduce the risk. But in some countries, it is hard to get a test. In some places, any test request has to be signed off by a doctor. It’s quite complex and it changes quite often. There is a cost element that you have to weigh up as well.”

The organisations that are managing best are those that have a plan but are also flexible, he adds. “You need a good communications policy that gets the information to employees that they need about Covid and what the company is doing about it.”

What companies should not do is to force people back into the office, says Silvester. “Businesses that drive people back into the office will cause a huge breakdown in trust with their people.” It is important to recognise that people have valid concerns about returning to the workplace, he adds. “The first issue is about using public transport, but the second-biggest concern we found was that people did not trust their colleagues to socially distance to their satisfaction.”

Those that have done well in the current climate are those that trust their employees rather than tracking what they do, agrees Britt of IBM Services. “We’re saying that our employees are resilient, smart and adaptable enough that if we give them the tools, they will work out what they need to do, and they will be as productive as they were in the office.

“The evidence is that productivity has not dropped, even when it is working parents who have to do home schooling or people who have to care for other relatives. Our people are more adaptable and resilient than they thought. If we trust them to do a good job, they will.”

Speed and adaptability are the new business competences

Regardless of where your staff are working, adaptability and technology will be key, he adds. “You need the tools and clear processes, but you also need the right culture to enable you to work effectively in a digital environment.”

“Today’s business environment is volatile, uncertain, complex and ambiguous). Academics were talking about it before lockdown and the pandemic has accentuated that. It has destroyed supply chains and the demand that drives our businesses. In that context, a static, rigid organisational structure where everyone has a clear, fixed role is not what you need. Speed and adaptability are the new business competences.”

These characteristics will help companies prepare not just for the next pandemic but for any “black swan” events, Britt stresses. “All organisations will have to build some organisational muscle to deal with this. Two to three years ago, in our Enterprise Guide to addressing the skills gap, C-suite members were emphasising the need for technical skills like cybersecurity, data science and coding. In our most recent study, the primary skill requirement was adaptability – the ability for any employee to respond to the situation in which they find themselves. Workers need to be prepared to reinvent their skillset and to cope with fast-moving situations.”

Mike Scott is a former Financial Times journalist who is now a freelance writer specialising in business and sustainability. He has written for The Guardian, the Daily Telegraph, The Times, Forbes, Fortune and Bloomberg.

This article is part of the October issue of The Ethical Corporation, on the future of work. To download the digital pdf for free click on the cover below.

 

 

Covid-19  Coronavirus  remote working  pandemic  digital transformation  IBM  WeWork  Regus  commuting  social distancing  Arcadis