Rotman experts on what to expect when the economy reopens
April 21, 2020
Rotman professors Nicola Lacetera and Anita McGahan discuss what work could look like after the COVID-19 crisis and what leaders should be thinking about right now.
With businesses closed and the country shut down for weeks, Canadians have good reason to be concerned about the economy and anxious to get back to work. Unfortunately, restarting our economy will not be a simple or straightforward process.
When Canada reopens for business, organizations will need to modify their operations so that employees and clients can stay healthy, plan for the possibility of a second wave of the virus and adapt to meet changing consumer demands.
“The key to the country's recovery is figuring out how to restart the economy without triggering another viral outbreak,” says Dean Tiff Macklem.
In a new webinar, Reopening the Economy: How Organizations Can Prepare for a New Normal, Macklem spoke with Anita McGahan, a University Professor and professor in the Strategic Management area and Nicola Lacetera, an associate professor at the University of Toronto Mississauga with a cross-appointment to the Strategic Management area at the Rotman School, about what leaders should be thinking about right now.
“The key to the country's recovery is figuring out how to restart the economy without triggering another viral outbreak.”
—Tiff Macklem, Dean, Rotman School of Management
Workplaces will need to be redesigned
McGahan, whose research focuses on industry change and global public health, says that when businesses reopen, there will be profound and noticeable changes.
She believes that social distancing guidelines will be in place for a while to come and many workplaces will need to adjust how their offices are laid out to keep employees safe. Some workplaces could have employees in the office but reporting to managers that are still working remotely. And all organizations will have to plan for the possibility of employees needing to leaving work abruptly if they are exposed to the virus.
As well, employees will need to overcome some of their behavioural tendencies.
“We are procrastinators, even for the small things. We know that we need to wash our hands often and we don’t,” says Lacetera, who is a chief scientist with the Behavioural Economics in Action at Rotman (BEAR) group.
He suggests that organizations consider ways to nudge their workforce to adopt healthy practices when they reopen. To start, leaders could rethink open-concept offices, make hand sanitation stations more visible, introduce regular breaks for employees to wash their hands and encourage individuals to work from home.
Professor Nicola Lacetera
Innovation will be a top priority
McGahan predicts that certain industries, like air transportation and professional sports, will not reopen at full force or early. These industries will have to develop creative solutions so that they can operate again in a safe way — for instance, some cruise lines have considered transitioning into floating hospitals during the pandemic, and there’s the possibility of holding the next Major League Baseball season in Arizona, where players would be quarantined in hotels and playing in empty stadiums.
The real challenge is understanding “how to redeploy those assets in ways that are constructive and value creating,” says McGahan.
Other industries that have been impacted by the pandemic — including financial services, healthcare and governments — will have to quickly integrate innovation into their business practices.
When the economy restarts, these organizations will have to find ways to stay productive while relieving employees that have put in long hours throughout the pandemic. They might need to restructure their operations, so that teams across the organization can collaborate more effectively and get back to the normal pace of business sooner.
“The innovation agenda is not qualitatively different than it was back in January, but the imperative for implementing it is much greater.”
Expect changes in productivity and shifting consumer demands
McGahan warns organizations to brace for a “hangover of fear”, a situation where employees will be consumed by multiple concerns — such as caring for family members, job losses in the household and staying healthy — and their minds won’t be entirely on work.
“How do you deal with the fact that people might be afraid to come back to work?” says McGahan.
Additionally, she anticipates that consumer attitudes will shift. This period spent at home is giving consumers time to reflect on their spending habits — and businesses will have to reconsider their value.
“In my family, we are talking about why we went to restaurants so frequently in the first place,” she says.
“[All of us are asking ourselves] do we really want to spend our money that way? How will we budget more responsibly?” she says. “Those kinds of questions will have a persuasive impact on consumer demand.”
University Professor Anita McGahan
Contact tracing could be implemented, and that poses privacy risks
To keep the population healthy and keep the country running, there will likely be enhanced and widespread testing and contact tracing, and that poses significant privacy risks.
Right now, countries face a challenge: should they suspend privacy laws quickly to keep communities safe?
“The real question is ‘will this represent a precedent?’” explains Lacetera, who is concerned that this type of tracking could open the doors for unchecked and widespread surveillance in the future.
“When it comes to data related to health, you can imagine the many consequences this might have for employment opportunities and insurance,” he says. “This is something to be very careful about.”
The real, long-term consequence of the COVID-19 crisis
Above all else, McGahan says that this crisis has changed or strengthened our values. During this time, she’s seen communities focus on bigger issues exacerbated by COVID-19, including inequality, privacy and meaningful consumption.
What’s the main lesson we’ll take away from this experience?
“More than anything, I think it’s the interpersonal relationships, friendships, trust and the quality of our interactions that people are going to value more than ever after this is over.”
To hear more about what’s required to reopen our economy, watch a recording of this webinar.
More Rotman Insights → | More from this webinar series →