Here are a couple of multitrillion-dollar questions for the economy: What will be required to get back to normal? And how long will it take?
The answer to the first question is quite simple: We’ll never get back to “normal” if it means living and working just as we did before the pandemic. Structural changes are occurring in the economy and in society. We must create a “new normal.”
The second question, how long it will take to reach the equilibrium of a “new normal,” is very hard to predict. Despite various predictions of a fast or slow recovery, no one really has precise and accurate answers. Personally, I believe a return to a booming economy and low unemployment will take many months.
A third question naturally follows the first two: What will the “new normal” be like? That is the subject of much study and speculation. It’s something every business and every industry is trying to figure out. It is a critical question, because dealing successfully with the COVID-19 pandemic and its aftermath will be the biggest economic challenge of our lifetimes for many businesses and individuals.
Much will depend on the medical side of this crisis. If a truly successful vaccine is developed over the next several months, or if effective treatments are found that prevent deaths and help infected people recover, then the new normal may be a little closer to the old normal.
However, the COVID-19 illness will still be nasty. And if vaccines are only as effective as flu shots, many people will still be infected.
While we can’t precisely predict the future, it’s clear that most businesses and individuals must adapt to new realities. The challenge is twofold: Return to business, build revenue and provide jobs, while at the same time preventing the spread of the virus and serious illness.
Some changes and required actions are obvious. Trends toward digital transactions and interaction will come faster than expected, disrupting old systems and processes. Some experts are saying that, in some sectors, COVID-19 won’t fundamentally change the future, but rather will accelerate it.
Many people will continue to work from home. At the office and at places where people gather — retail stores, restaurants, sports and cultural events, and even churches, space must be reconfigured to maintain social distancing. Telehealth and distance learning will be more accepted and widely used.
Here are other new realities I see for all of us:
• Education and job training will be more important than ever. Some businesses will be lost, and some jobs will never return. But other businesses will do well and expand, creating new job categories and even new industries. Thus, an enormous retraining program is necessary to help displaced workers enter new jobs and professions.
• Telecommunications and digital connectivity will become ever more important, including in rural areas. Many jobs will be available in a wide variety of technology companies. Especially important will be security. As more of what we do moves online, thieves and predators will try to exploit every vulnerability. Enterprises and technicians who develop products to protect businesses and individuals from online fraud, invasion of privacy and viruses will be in high demand.
• Banking consultant Anat Bird has suggested that the crisis can propel companies to “leapfrog years of stagnation and slow movement.” Companies that have been slow to digitize to improve efficiency and customer experience must quickly modernize. This is the time to “pick up the pace of change,” she said, and make the new normal better than the old normal.
• Bird cites a report, “Don’t Waste the Reboot,” by The Yak Collective (yakcollective.org), which suggests that a time of great uncertainty is also a time of great opportunity. Businesses should be thinking: How can my company respond to new needs in society? Is this a time to diversify (an example is shut-down restaurants becoming grocery stores, or local breweries producing hand sanitizers)? Is this a time for a moonshot or to greatly stretch business goals? Is this the time to eliminate an old service or process? To dramatically pivot, or partner with a former competitor?
• Bird reminds all businesses that one thing has not changed: Success is still all about people. That means both employees and customers. The crisis is “uncomfortable, discombobulating and disconnecting.” Understand and meeting the values and needs of people will always provide business success.
A. Scott Anderson is CEO and president of Zions Bank.