Disruption comes in many forms and impacts us at varying speeds. The seismic events caused by COVID have been rapid in changing human behaviour but what will prove its lasting effects? So far the predictions have come thick and fast but it is tempting to take the Chinese approach. In response to a query about the influence of the French Revolution, Zhou Enlai (1898-1976) said simply: “it’s too early to tell.” Closer to home and our current circumstances, experienced epidemiologists urge avoiding definitive conclusions until several years have elapsed.
That said, it is hard not to believe in a more contemporary, Bob Dylan view of the world, times are changing. From a purely personal perspective, I travelled to the US to meet colleagues and clients six times last year. In 2020, as things stand, I shall not be walking down the Heathrow air bridge once.
The more important question is: does this matter? What is lost with the new normal of WFH (Working From Home)? Certainly, I’m an advocate of management (and leadership) by walking around. I pick up much by mingling and my colleagues, I’d hope, likewise pick up things from me. Serendipitous meetings in lifts and corridors can be highly creative. But in walking no further than our home offices, I’m happy to say that I do not think our clients have suffered. Our service offering is remarkably robust and remains relevant to our clients. We’ve been able to think ahead to their forthcoming requirements and assist when clients have needed us during what has been a frenetic four months. As August approaches, a rest from Zoom, Teams and Meets is necessary for many.
What is more difficult in a remote set up is forging new relationships and the acquisition of new business. This will remain a challenge as the face-to-face nature of meeting new people and gaining their trust is far trickier than a group video call. Flesh needs to be pressed. Eye needs to look directly into eye.
One effect will be in the way business employs people. In the work we’ve conducted with Jericho Chambers on the effects of technological change over the last two years, we’ve seen that new Tech is coming fast and COVID will accelerate this process. Robotics, for example, is a key driver in technology to reignite growth and increase skills and productivity. We’ve seen how automation has kept key parts of the economy operating during COVID: Ocado and Amazon being prime examples. The quality and consistency of this service has been remarkable and a welcome relief to many customers. In an ideal world, robotics are an enabler to support the upskilling of a workforce, and hence increase economic productivity over the long term: its advocates praise its ability to relieve humans of the 3 D tasks – dull, dirty and dangerous.
Whilst there are plenty of uncertainties at the moment, one thing that seems clear is that COVID means that many businesses will regard large numbers of employees working in close proximity as a risk factor. No employer wishes to infect its people and place them in peril. It seems likely (and understandable) that both technology and robotics will be used to take the pressure off staff across the manufacturing, healthcare and service sectors. This will be a major factor in the next few years.
As the number of office square feet reduces for many businesses – as staff work remotely – so capital investment on tech. will increase. People are complex, whereas tech. supposedly is not. I fear this will certainly mean fewer good jobs out there in our economy, although the considerations remain nuanced.
One major event of the last few months in my sector is the demise of Wirecard. If you’ve worked in Financial Services for as long as I have, you will recognise many traits in common with previous scandals – from Barings to Bernie Madoff. Human frailty and greed simply don’t go away; nor does technology does eliminate them.
What was going on at Wirecard? It’s many years since I was employed as an auditor but the first rule then, as it should remain now, is “find out from their banks, directly, exactly what they have in their accounts.”
It’s interesting to mull over the contention that if robotic Ai’s had been working all over Wirecard’s books in real time, whether the calamity could have been avoided?
Needless to say, calls for tighter regulation are reverberating. I have no objection to sound, purposeful regulation – it can be a valuable chart when negotiating choppy waters. But I’m mindful of what Baroness Denise Kingsmill said in a Stifel roundtable discussion which I hosted in 2019: “From my experience, it’s always preferable if companies are involved in their own regulation. Regulating from on high isn’t the best sort of regulation because it tends to involve acting on a crisis that is already past rather than what is coming down the track. And tech is moving very fast all the time. Fourteen years in the House of Lords has continued to astonish me that business people don’t understand the pressures on and concerns of politicians and vice versa.”
“As the Wirecard case demonstrates, regulation must think always about the human frailties/ failings that so often lead to systemic meltdowns, as happened in 2008/9”
Regulatory frameworks were, of course and of necessity, loosened at the start of this crisis (mainly to support remote working) and it is likely that they will soon tighten again. But, as the Wirecard case demonstrates, regulation must think always about the human frailties/ failings that so often lead to systemic meltdowns, as happened in 2008/9. Overlay this with the march of technology, AI and Robotics, and we may need to resist the need for twin-track regulation – one set for the people and other for the kit. Ethical agency lies with people, not machines.
When COVID 19 has made way for COVID 22 or 23, one over-arching concern will remain. Climate Change poses a bigger threat to financial stability than the coronavirus pandemic. Until now, environmentalism has tended to wane when economies turn down. But as the world endures its second hottest spring on record, it seems the pandemic may be wreaking lasting changes in public attitudes. Like it or not, Treasury Secretaries of nation-states will control the commanding heights of their economies for a while to come. Some have already linked their bailouts to green goals. This is as good a time as ever to address the issue which touches everyone, even by those the virus has left, mercifully, untouched.
Eithne O’Leary is President, Stifel Europe