Author Archives: C. DAY

When Your Competitor Becomes Your Collaborator

On this episode, Julianne Pepitone sits down with GSK’s Chief Scientific Officer Hal Barron to learn about collaboration when it comes to solving major challenges in human health. She learns how Hal defines what makes a great partnership and how he finds the people who are key to helping his team discover the next great innovation in medicine.       ——-       The Podcast.



How do you collaborate with a direct competitor? In the race for a COVID vaccine we’re hearing about lots of competitor collaborations, including GSK. Hal, for those of us not in pharma, I think the perception is that this is a hyper competitive industry. So to hear you talking about sitting down with folks who you compete with, especially in working toward a COVID vaccine, it feels surprising.


I was talking with a friend of mine from Johnson & Johnson. He said, “Why don’t we just form a group? All the heads of R&D, we should just meet weekly and figure out what the heck to do.”

So we did it. It kept growing and growing and we meet and we’d just bring up problems and say, “Well, what do you do about that?” Then it came down to how do we make better vaccines? Then the concept of, should we be sharing data? Should we be helping each other be successful in different ways? The answer was sure, and everyone said, “Terrific idea. Let’s do it.” The key thing was, let’s fix this thing. Scientists and science is almost like a superhero these days. It’s the only way to get this planet back in shape. It comes with a tremendous responsibility to do this thoughtfully. We’re just trying to make the world a better place.


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Innovation: Where Good Ideas Come From

What is more important to the entrepreneurial process than good ideas?  This gem of a book documents the “natural history of innovation”,  The latest and greatest non-fiction books are summarized in one book for every entrepreneur and entrepreneurship educational program.

Quick Summary:  Both evolution and innovation thrive in collaborative networks where opportunities for serendipitous connections exist. Great discoveries often evolve as slow hunches, maturing and connecting to other ideas over time.  

Here are nine lessons covered in the book:

Lesson 1: Evolution and innovation usually happen in the realm of the adjacent possible.

Four billion years ago, carbon atoms mulled around the primordial soup. But as life began, those atoms did not spontaneously arrange themselves into complex life forms like sunflowers or squirrels.

First, they had to form simpler structures like molecules, polymers, proteins, cells, primitive organisms and so forth. Each step along the way opened up possibilities for new combinations, expanding the realm of what was possible, until finally a carbon atom could reside in a sunflower.

Similarly, eBay could not be created in the 1950s. First, someone had to invent computers, then a way to connect those computers, then a World Wide Web for people to browse and then a platform which supported online payments.

Both evolution and innovation tend to happen within the bounds of the adjacent possible, in other words the realm of possibilities available at any given moment.

Great leaps beyond the adjacent possible are rare and doomed to be short-term failures. The environment is simply not ready for them yet. Had YouTube been launched in the 1990s, it would have flopped, since neither the fast internet connections nor the software required to view videos was available then.

The predominance of multiples in innovation highlights how the adjacent possible is constrained by existing parts and knowledge. A multiple occurs when several people independently make the same discovery almost simultaneously.

Joseph Priestley and Carl Wilhelm Scheele isolated oxygen in 1772-1774, unaware of the other’s advancement. But they did share the same starting point, because their search for oxygen could not begin until the gaseous nature of air was first understood. Thus it was inevitable some scientists would reach their discoveries at around the same time.

Lesson 2: World-changing ideas generally evolve over time as slow hunches rather than sudden breakthroughs.

Although in retrospect great discoveries may seem like single, definable eureka-moments, in reality they tend to fade into view slowly. They are like gradually maturing slow hunches, which demand time and cultivation to bloom.

According to Darwin, the theory of natural selection simply popped into his head when he was contemplating Malthus’ writings on population growth. But Darwin’s notebooks reveal that far before this so-called epiphany, he had already described a very nearly complete theory of natural selection. This slow hunch only matured into a fully-formed theory over time.

Only in retrospect does the idea seem so obvious that it must have come in a flash of insight. Upon hearing of the theory for the first time, a supporter of Darwin even exclaimed “How incredibly stupid not to think of that.”

Another slow hunch led to a revolution in the way we share information today.

As a child, Tim Berners-Lee read a Victorian-era how-to book and was fascinated by the “portal of information” he had found. Well over a decade later, working as a consultant at the Swiss CERN laboratory and partially inspired by the book, he tinkered with a side-project which allow him to store and connect chunks of information, like nodes in a network. Another decade later, CERN officially authorized him to work on the project, which finally matured into a network where documents on different computers could be connected through hypertext links. After decades of Berners-Lee’s slow hunch maturing and developing, the World Wide Web was born

Lesson 3: Platforms are like springboards for innovations.

Ecologists use the term keystone species to describe organisms which are disproportionately important to the welfare of the ecosystem. On a small island with no other predators, a pack of wolves keeps the population of sheep under control, thus stopping them from eating the island bare and collapsing the entire ecosystem.

But around two decades ago, ecologists understood that a very specific and important type of keystone species warranted its own term entirely. Ecosystem engineers actually create habitats for other organisms, building platforms from which several others benefit. Consider for example the beavers that dam rivers turning forests into wetlands, or the coral that builds thriving reefs into the middle of the ocean.

Such platforms exist in the sphere if innovation as well, and they are used as springboards to leap into the adjacent possible. The Global Positioning System (GPS) is a good example of such a platform. Originally developed for military use, it has now spurned countless innovations from GPS trackers to location-based services and advertising.

Platforms often stack on top of each other, meaning that one platform provides the foundation for even more platforms, which again produce countless new innovations.

Beavers fell trees that rot and attract woodpeckers to drill nesting holes in them. But once the woodpeckers have left, these holes are occupied by songbirds. The woodpecker has also created a platform.

The story of Twitter is similar: the Web was based on existing protocols, Twitter was built on the Web and now countless apps have been designed on the Twitter platform, the adjacent possible being expanded at every step.

“Ideas rise in crowds, as Poincaré said. They rise in liquid networks, where connection is valued more than protection.”

Lesson 4: Innovation and evolution thrive in large networks.

The basis of all life on earth (and likely any extraterrestrial life out there) is carbon, because it is fundamentally good at connecting with other atoms, and can thus construct complex chains of molecules. These connections allow new structures like proteins to emerge. Without carbon, the earth would have likely remained a dead soup of chemicals.

Connections also facilitate ideas. When humans first began to organize themselves into settlements, towns and cities, they became members of networks, which exposed them to new ideas and allowed them to spread their own discoveries. Before this happened, a novel idea by one person could well die with her, since she had no network to spread it to. Great ideas rise in crowds.

To better understand the roots of scientific breakthroughs, in the 1990s psychologists decided to record everything that went on in four molecular biology laboratories. One imagines that in a field like molecular biology, great discoveries are made by peering through a microscope. Strikingly, it turned out the most important ideas arose during regular lab meetings, where the scientists informally discussed their work.

Other studies have shown that the most creative individuals have broad social networks that extend outside their own organization, and hence get new ideas from many different contexts.

Cities facilitate such large networks which allow ideas to be diffused and combined in novel ways. This is one of the reasons why cities are disproportionately more creative than smaller towns. Today though the greatest such creative network is not a city at all, but the World Wide Web, creating, connecting and diffusing ideas more effectively than any network before it.

Lesson 5: Collaboration is at least as important a driver of innovation as competition.

The ability of inventors and entrepreneurs to capitalize on their discoveries is often cited as a fundamental driver of innovation. But while the commercialization potential of inventions indeed spurs innovation, it also generates patents and other restrictions, thus hindering the circulation and further development of ideas.

Thus with regard to innovation, the very markets which are supposed to guarantee efficiency by rewarding inventors are in fact structurally inefficient, because they artificially prevent ideas from propagating and combining with others.

Over the past 600 years, the way that great inventions and discoveries are made seems to have gravitated increasingly away from individual inventors and toward networks of people. And even as the age of capitalism dawned and bloomed, most great discoveries have gone unrewarded by the markets. The World Wide Web, the theory of relativity, computers, x-rays, pacemakers and penicillin are but a few examples where the inventor has not profited.

Certainly market-spurred innovation has been far more effective than innovation achieved in command economies like the Soviet Union, but that still does not mean it is the optimal way forward. Yes, inventors may well deserve to be rewarded, but the real question should be how to increase innovation in general.

In the Origin of Species, Darwin himself placed equal emphasis on the wonder of complex collaboration between species as on the natural selection that comes from competition for resources. Similarly open networks of connections among innovations can be just as generative as vigorous competition. Free markets have greatly spurred innovation, but so has the collaborative, open way of sharing knowledge in networks.

Lesson 6: Lucky connections between ideas drive innovation.

The ability of carbon to connect with other atoms was vital for the evolution of life, but a second, randomizing, force was also necessary: water.

Water moves and churns, dissolving and eroding everything in its path, thus fostering new kinds of connections between atoms in the primordial soup. Just as importantly, the strong hydrogen bonds of water molecules helped maintain those new connections.

This mix of turbulence and stability is why liquid networks are optimal both for the evolution of life and for creativity. Innovative networks too must teeter on the brink of chaos, in the fruitful realm between order and anarchy, just like water.

Random connections drive serendipitous discoveries. Dreams for example are the primordial soup of innovation, where ideas connect seemingly at random. In fact, neuroscientists have confirmed that “sleeping on a problem” greatly helps solve it. Centuries ago, the German chemist Kekulé dreamt of a mythological serpent devouring its own tail, and subsequently realized how carbon atoms in a ring formed the molecule benzene.

But it seems chaos and creativity are linked even on a neurological level.

Ideas are in fact manifestations of a complex network of neurons firing in the brain, and new ideas are only possible when new connections are formed.

For some reason, neurons in the brain alternate between states of chaos, where they fire completely out of sync with each other, and more organized phase-lock states where large clusters of neurons fire at exactly the same frequency.

The period of time spent in either state differs from brain to brain. Somewhat counter-intuitively, studies have shown that the longer the spells of chaos a person’s brain tends to experience, the smarter the person usually is.

Lesson 7: Serendipitous discoveries can be facilitated by a shared intellectual or physical space.

When ideas converge in a shared physical or intellectual space, through for example people from different disciplines meeting, creative collisions happen. Consider the modernist cultural innovations of the 1920s. Many of them were largely a result of artists, poets and writers meeting at the same Parisian cafés. Shared interactions allow ideas to diffuse, circulate and be combined randomly with others.

On an individual level, facilitating such serendipitous connections is simply a matter of simultaneously introducing ideas from different disciplines into your consciousness. Innovators like Benjamin Franklin and Charles Darwin favored working on multiple projects simultaneously, in a kind of slow multitasking mode. One project would take center stage for days at a time, but linger at the back of the mind afterwards too, so connections between projects could be drawn.

The philosopher John Locke understood the importance of cross-referencing as early on as 1652, when he began developing an elaborate system for indexing the content of his commonplace book, essentially a scrapbook of interesting thoughts and findings. Such books formed his repository of ideas and hunches, maturing and waiting to be connected to new ideas.

On an organizational level, the key to innovation and inspiration is a network which allows hunches to mature, scatter and combine with others openly.

The greatest such network in existence is, of course, the World Wide Web, where a wealth of ideas is not only available, but hyper-linked for easy connections between several disciplines.

“Some studies suggest as much as 95 percent of medical technology donated to developing countries breaks within the first five years of use.”

Lesson 8: Great innovations emerge from environments that are partly contaminated by error.

Error is present in both the evolution of life and the innovation of great ideas, and it is not always a bad thing.

Consider natural reproduction: genes are passed on from parent to offspring, providing “building instructions” for how the offspring should develop. Without occasional mutations, meaning random errors in those instructions, evolution would have long ago come to a virtual standstill. The elephant’s tusks or peacock’s feathers would have never emerged if only perfect copies of existing genes would have propagated. Mutations endow creatures with new traits. While most of them fail fantastically, these errors also produce a few winners, thus driving evolution.

Similarly, Alexander Fleming only discovered penicillin because of an error: he mistakenly allowed a bacteria sample to be contaminated by mold and began to wonder what had killed the bacteria. In fact, major new scientific theories often begin as pesky little errors in the data which keep demonstrating that something in the dominant theory is wrong.

Unexplained errors force us to adopt new strategies and to abandon our old assumptions.

In a study, psychologist Charlan Nemeth showed two groups of people slides with various colors on them, and asked the subjects to free-associate words after seeing each slide. Here’s the twist: into the second group, Nemeth inserted actors who occasionally claimed to see different colors than the actual one shown, e.g. “green” when the slide was in fact blue.

The first group came up only with the most predictable associations, e.g. “sky” for a blue slide, but the second group was far more creative. The “error” introduced into the group forced them to consider more possibilities than just the obvious ones.

Lesson 9: Innovation thrives on reinventing and reusing the old.

Evolutionary biologists use the term expatiation to describe the phenomenon where a trait originally developed for a specific purpose is eventually used in a completely different way. Feathers, for example originally evolved as a method for temperature regulation, but today their airfoil-shape helps birds fly.

Ideas are often similarly repurposed along the way. Tim Berners-Lee created the World Wide Web as a tool for scholars, but in the course of time it became a network for shopping, social networking and pornography, among other things. Johannes Gutenberg, on the other hand found an innovative use for a 1000 year-old invention: the wine screw press used to squeeze juice out of grapes. Using this ancient technology and his knowledge of metallurgy, Gutenberg created the world’s first printing press.

Unconventional uses for old, even discarded items and ideas spur innovation. Nairobian cobblers make rubber sandals out of car tires, and Gustave Flaubert wrote Sentimental Education as a contortion of the bildungsroman genre. The old is reshaped into the new.

Discarded spaces are also transformed through innovation. Just like the skeletal structure left behind by dead coral forms the basis of the rich and thriving ecosystem of the reef, abandoned buildings and rundown neighborhoods are often the first homes of innovative urban subcultures. Their unconventional thinking and experimentation often has no place in glitzy mainstream malls and shopping streets initially. Old buildings allow subcultures to interact and generate ideas that then diffuse and spill over into the mainstream.

Courtesy Blinklist Magazine, Nov. 2013, “Key Lessons”.

Reskilling for Life – Become an “Intentional Learner”

The most fundamental skill: Intentional learning and the career advantage.

Learning itself is a skill. Unlocking the mindsets and skills to develop it can boost personal and professional lives and deliver a competitive edge.

The call for individuals and organizations alike to invest in learning and development has never been more insistent. The World Economic Forum recently declared a reskilling emergency as the world faces more than one billion jobs transformed by technology. Even before COVID-19 emerged, the world of stable lifetime employment had faded in the rearview mirror, replaced by the expectation that both executives and employees must continually refresh their skills. The pandemic has only heightened the urgency of doubling down on skill building, either to keep up with the speed of transformation now underway or to manage the particulars of working in new ways.

Despite this context—and the nearly constant refrain for people to adapt to it by becoming lifelong learners—many companies struggle to meet their reskilling goals, and many individuals struggle to learn new and unfamiliar topics effectively. We believe that an underlying cause is the fact that so few adults have been trained in the core skills and mindsets of effective learners. Learning itself is a skill, and developing it is a critical driver of long-term career success. People who have mastered the mindsets and skills of effective learning can grow faster than their peers and gain more of the benefits from all the learning opportunities that come their way.

This article, supported by research and our decades of experience working as talent and learning professionals, explores the core mindsets and skills of effective learners. People who master these mindsets and skills become what we call intentional learners: possessors of what we believe might be the most fundamental skill for professionals to cultivate in the coming decades. In the process they will unlock tremendous value both for themselves and for those they manage in the organizations where they work.

Unlocking intentionality

Formal learning opportunities account for only a small percentage of the learning a professional needs over the course of a career. Everyday experiences and interactions offer tremendous learning opportunities, but only if you intentionally treat every moment as a learning opportunity. While intentional learners embrace their need to learn, for them learning is not a separate stream of work or an extra effort. Instead, it is an almost unconscious, reflexive form of behavior. Learning is the mode and mindset in which intentional learners operate all the time. Although they are experiencing all the same daily moments anyone else might, they get more out of those opportunities because everything—every experience, conversation, meeting, and deliverable—carries with it an opportunity to develop and grow.

Each of us can become an intentional learner. There are two critical mindsets (or things you need to believe) and five core practices (or behavior that collectively reorients you toward learning in everything you do). It’s not as hard as it sounds; in fact, you’re probably doing some of these already.

Foster learning by adjusting two critical mindsets

Mindsets are powerful, often exerting tremendous influence on behavior, sometimes unconsciously. When built on a foundation of self-efficacy—the belief that your actions can help you achieve desired outcomes1 —two mindsets serve as especially powerful fuel for intentional learners: a growth mindset and a curiosity mindset. While some people may have a natural proclivity to these mindsets, the important thing is that they are neither fixed nor immovable. In fact, part of their power is that they can be developed.

Adopt a growth mindset

Stanford psychologist Carol Dweck’s popular work on growth suggests that people hold one of two sets of beliefs about their own abilities: either a fixed or a growth mindset. A fixed mindset is the belief that personality characteristics, talents, and abilities are finite or fixed resources; they can’t be altered, changed, or improved. You simply are the way you are. People with this mindset tend to take a polar view of themselves—they consider themselves either intelligent or average, talented or untalented, a success or a failure. A fixed mindset stunts learning because it eliminates permission not to know something, to fail, or to struggle. Writes Dweck: “The fixed mindset doesn’t allow people the luxury of becoming. They have to already be.”2

In contrast, a growth mindset suggests that you can grow, expand, evolve, and change. Intelligence and capability are not fixed points but instead traits you cultivate. A growth mindset releases you from the expectation of being perfect. Failures and mistakes are not indicative of the limits of your intellect but rather tools that inform how you develop. A growth mindset is liberating, allowing you to find value, joy, and success in the process, regardless of the outcome.

Cultivating a growth mindset can begin with shifting your inner dialogue from beliefs about your ability (a fixed mindset) to beliefs about your opportunities and needs (a growth mindset)—for example, from “I’m terrible at giving presentations” to “I need more practice presenting in front of others.” Similarly, “I’m not good enough to be promoted to supervisor” might become “I need some additional experience before I’ll be ready for promotion.” Simple restatements have a dramatic impact on what you believe about your own abilities. A fixed mindset often runs deep; it may take constant practice to reframe your default thoughts.

Feed your curiosity

Curiosity, the engine of intentional learning, can be cultivated, even in those who don’t consider themselves naturally curious. Think of curiosity as priming the pump. It’s what gets your learning started. Curiosity is awareness, an openness to ideas, and an ability to make connections between disparate concepts.

The research tells us that curiosity matters for three primary reasons. First, inspiration is strongly correlated with an intrinsic desire to learn. Curiosity sparks inspiration. You learn more and more frequently because you are curious. Second, curiosity marks the beginning of a virtuous cycle that feeds your ability as a self-directed learner. Finally, research suggests that curiosity doesn’t diminish with age, so it can serve you at any point in your career. Although your learning methods will change over time, curiosity will keep the spark of motivation alive.3

Consider a few practices to strengthen your curiosity muscle:

  • Face your fears. Fear is a significant barrier to curiosity; confronting those fears can be an important way to unlock learning skills. Spend a bit of time reflecting. What prevents you from asking questions in meetings? What keeps you from trying new things? What makes you reluctant to accept new assignments? Once you name what you are afraid of, you can decide how to address it.
  • Seek novel experiences and ideas. New environments, new experiences, and exposure to new groups of people can all spark curiosity. Your search for the new can be as dramatic as moving to a new country or as simple as watching a documentary on a topic you don’t know anything about. The key is to avoid stagnation by feeding your mind with something new.
  • Focus on what you love. Your curiosity doesn’t have to be confined to your career—cultivating the muscle in anything you do will serve all parts of your life. Consider collecting skills and interests outside your day job. Maybe you love podcasts, build engines, coach a sports team, or play an instrument in your spare time. Whatever you love to do, do more of it.

Whatever form curiosity takes, it helps you stay open and aware, broadens your perspective, and readies you to learn. Because it looks different in every person, the best advice is to just start. Get curious. Ask questions. Find something you are interested in and try it. When you become tired, try something else, but don’t stop trying things.

Practice, practice, practice: The five core skills of intentional learners

A growth mindset and active curiosity are the fuel of intentional learning. But when you develop your learning muscles, it’s also important to modulate these forces and direct their energy effectively. Five best-practice behaviors help intentional learners get the most out of their experiences: setting goals, protecting time for learning, actively seeking feedback, conducting deliberate practice, and reflecting to evaluate yourself and determine your progress.

Set small, clear goals

Intentional learners are anchored in tangible goals, so they can use curiosity as an effective tool instead of a source of distraction. Learning-science scholars draw a bright line between a learner’s goal and the ultimate “stickiness” of learning. Learning takes hold when you can retain and use what you have learned. The stickiest kind of learning happens when you are trying to accomplish something you care about.

Consider these best practices for goal setting:

 Courtesy McKinsey & Co., Lisa Christense SF, Jake Bittleson Chicago and Matt Smith Paris.

Resilience, How to Bounce Back.

Resilience, the ability to recover quickly or object to spring back into shape, is a key to success as an entrepreneur.  I can attest to its importance from my own serial entrepreneur experience,  Events overtake an entrepreneur when “activity breeds activity” or “action cures fear”.  At my height of success as a commercial insurance agent in Atlanta, my body shut down, and it turned-out I had a large pituitary tumor (benign but serious).  The pituitary gland is the “master gland” that runs one’s hormonal system.


Time Magazine ran this article in June 2015 titled, “How to Bounce Back” by Mandy Oakland, well worth every entrepreneur’s time to read.




Dr. Dennis Charney knows that each of his five children has hated him at some point or another–particularly when he dragged them along on one of his “semidangerous” adventure trips. He recalls a perilous hike with one of his daughters, who was 13 at the time. “Some weather came in, and there was some wildlife. When she said she despised me it came, like, from her soul,” says Charney, 64, who is now dean of the Icahn School of Medicine at Mount Sinai in New York City.

His son Alex knows the feeling. A decade ago, Charney took him on a kayaking trip to Patagonia with his best friend, Dr. Steven Southwick. It rained the entire time, the life jackets didn’t fit, and Alex had to share a broken-ruddered boat with his dad for 12-mile runs every day. When it was all over, Alex informed his father he never wanted to speak to him again.

But as a psychiatrist who, with Southwick, has studied the science of resilience for two decades, Charney knows there are benefits to forcing people out of their comfort zone. Resilience is essentially a set of skills–as opposed to a disposition or personality type–that make it possible for people not only to get through hard times but to thrive during and after them. Just as rubber rebounds after being squeezed or squished, so do resilient people.

It’s a tantalizing arena for neuroscientists, who are getting better at understanding why some people bounce back from difficult experiences–both those they seek out and those that blindside them–while others don’t fare quite so well. And thanks to modern imaging, scientists can peer inside the brain in real time to see how, and to what extent, stressful situations change the structure and functions of the brain. They are also learning that training for resilience can change the brain to, well, make it more resilient.

Much of the new evidence suggests that with a little practice, anyone can develop resilience, says Southwick, 67, a professor of psychiatry at the Yale School of Medicine. There are lots of ways to intervene so that stress or trauma doesn’t derail you, he says. No one size fits all.

That’s good news, because humans get stressed far more than they realize. The hot-and-cold boss, the traffic delays, the spat with their spouse, the monthly bills–these are all registered as stress in the brain. “The vast majority of us will be faced with one or more major traumatic stressors during a lifetime,” says Southwick. But the countless smaller stresses also take a toll. Resilience, research shows, can help with that, and it’s not a moment too soon, given that nearly all our modern ills, including heart disease and possibly even brain disorders like Alzheimer’s disease, have stress as a common risk factor.

Much of the new evidence suggests that with a little practice, anyone can develop resilience, says Southwick, 67, a professor of psychiatry at the Yale School of Medicine. There are lots of ways to intervene so that stress or trauma doesn’t derail you, he says. No one size fits all.

That’s good news, because humans get stressed far more than they realize. The hot-and-cold boss, the traffic delays, the spat with their spouse, the monthly bills–these are all registered as stress in the brain. “The vast majority of us will be faced with one or more major traumatic stressors during a lifetime,” says Southwick. But the countless smaller stresses also take a toll. Resilience, research shows, can help with that, and it’s not a moment too soon, given that nearly all our modern ills, including heart disease and possibly even brain disorders like Alzheimer’s disease, have stress as a common risk factor.

After interviewing scores of Vietnam prisoners of war, Army Special Forces and survivors of horrific tragedies, Charney and Southwick became convinced that anyone could train him- or herself to be more resilient. POWs told Southwick and Charney that with only two resources–free time and their minds–they were able to do remarkable things they couldn’t do before; one developed a knack for multiplying huge numbers in his head, while another built a house in his imagination (and then later, on solid ground). “It said to us that there’s enormous untapped capacity of the human brain,” Charney says.

Discovering why some of us fare better than others has always been at the heart of resilience research. Now techniques like functional magnetic resonance imaging make it possible for scientists to look beyond their own observations of people and into the parts of their brains that govern emotion. By observing patterns of blood flow, they can measure brain activity and see, for instance, what stress looks like in different people–which is useful because how we respond to stress is a critical part of resilience. Like the animal whose pulse returns quickly to normal once it has successfully outrun a predator, resilient brains seem to shut off the stress response and return to baseline quickly. “Resilient people seem to have the capacity to appropriately regulate the subcortical fear circuits under conditions of stress,” says Charney.

It doesn’t take a predator to trigger a stress response in modern humans. Some research shows that even feelings of social pain–like rejection and loneliness–zoom along the same neural pathways as fear. “This notion that I’m going to be rejected or fail or won’t be accepted by the group activates the same circuits as if I saw a wolf,” Southwick says. It’s an evolutionary hanger-on from when our ancestors survived only in groups.

The problem is, even though we’re no longer bumping into wolves, we’re constantly activating the same neural pathways of fear with everyday stressors–worrying about the future, fretting about the past. The more we use this neuronal superhighway, the more efficient it grows, and this mode of thinking becomes our default. But new research shows humans can train their brains to build and strengthen different connections that don’t reinforce the fear circuit. Over time, if people use this new pathway enough, it can become the new response to stress.

Richard Davidson, a neuroscientist at the University of Wisconsin, Madison, thinks he’s found a connection in the brain that is especially important for resilience: the path from the prefrontal cortex–the seat of cognition and planning–to the amygdala, an emotional part of the brain that responds to threats. A stronger connection means the prefrontal cortex can more quickly tell the emotional amygdala to quiet down, Davidson writes in his book The Emotional Life of Your Brain.

Scientists can see how resilient brains respond to emotion differently, found Martin Paulus, scientific director and president of the Laureate Institute for Brain Research in Tulsa, Okla. In a series of brain-imaging experiments on resilient Navy SEALs, Paulus showed the SEALs a color cue that signaled they were about to see an emotional picture. Paulus saw that their brains anticipated the emotion more quickly than the average brain, letting them jump nimbly between different types of emotions. Paulus says that in his research he has seen differences in the brains of people with anxiety or depression that suggest they have a hard time letting go of emotions and are often too engaged in emotional processes. The Navy SEALs, on the other hand, weren’t glued to the emotional experiences. Why? “They’re more resilient,” he says. And just like working your biceps or your abs, say experts, training your brain can build up strength in the right places–and at the right times–too.

Next: The Workout for Your Brain

Reasons to Expand, Re-Tool Entrepreneurship Now.

Two VERY impactful articles for your college, university, or workforce center:

Future of Education and How Reskill-Upskill Education 

Dr. Gordon Gee, WVU President of 40 years and former Chair of Higher Education Commission says, “if I were King for a day, first, I would get rid of colleges and departments, and create centers, institutes, and working groups, and organize around ideas.”  Re-upskill article says, “as the nature of work changes rapidly, workers will need to learn new skills for existing jobs (up-skilling) or whole new skills for different jobs (re-skilling).

With American’ trust in higher education dropping, we asked West Virginia University president Dr. E. Gordon Gee, who has served as a university president for 40 years, about how institutions can positively move forward and focus on equity, accessibility, and diversity:  “What do you believe are the prevailing issues threatening the vitality of higher education?”

This is an existential time for higher education.  When I became a university president in 1981, there was a public survey showing 95 percent of people  in this country thought higher education was important.  It has now fallen below 50 percent, even though higher education is the most important element in our culture and economy right now.  This is happening in part because change has not been part of higher education’s portfolio. Universities are made up to two elements: talent and culture.  Most universities have very talented people, bu they have the culture wrong.  We need to spend much more time developing a culture of change, a culture of creativity.  Universities are places of curiosity.  We have great people thinking about great ideas and doing great things, but we have no curiosity about how we make ourselves better.

If I were king for a day, first, I would get rid of colleges and departments, and create centers, institutes and working groups, and organize around ideas.  Another problem is that every institution is chasing after other institutions, rather than trying to be themselves.  Because of that, I think a thousand institutions are going to fail over the next  couple of years.  “How has your leadership at a number of universities and colleges prepared you for the current climate and circumstances of higher education?”

In my 40 years as a university president, I have experienced what I thought was every possible challenge, including wars, the 1987 stock crash, riots, tragedies on campus, 9/11 and multiple recessions.  But the COVID-19 pandemic is testing education –and every other sector of society — as never before.  Personally, I am approaching our current situation a bit like a freshman showing for their first day of class: a little anxious, but eager to try new things and learn all I can.  This is the “Black Swan” moment that requires educational leaders to ask questions, rather than pretend we have all the answers.  And, as we work through current challenges, we must constantly fix our eyes on the future.  We must learn from our mistakes and from what we do right.

Because changes to our world will linger after this virus subsides, we must find ways to educate and sustain our institutional families while operating in a new environment.  In my conversations with senior university leaders, I have asked them to couple their immediate crisis responses with thinking “from the other side of the mountain”.   This means thinking about how we can use what we learn to reposition West Virginia University in a more powerful role of leadership locally and nationally.  “What is one piece of advice you have for leaders of higher education institutions to improve student success?”

The most important priority leaders can address today is increasing the quality of higher education while ensuring that it is cost-effective and affordable for students.  In my state, West Virginia, you hear a lot about the need to create jobs, which is real, but the state also has many jobs that are wanting for people.  We just have not trained them in the right way.  While not everyone needs a four-year college degree, everyone needs some post-secondary training to succeed in today’s economy.

i chaired the Commission on Higher Education Attainment, which issued an open letter to college presidents outlining some important ways to increase college completion and reduce student debt:      ~Create a campus culture that promotes student success and persistence.  ~Provide greater support for non-traditional students.  ~Find new ways to assess and provide credit for students’ previous learning experiences.  ~Deliver courses more efficiently and in more flexible ways.  ~Do a better job identifying at-risk students and provide better remedial help for them.

How Universities Can Implement the Reskill-Upskill Education Trend

Education has been moving towards a lifelong-learning model focused on skills.  To take advantage of this shift, institutions will need partnerships.

Online learning has been the future of education for some time –even before the global pandemic, the online education market was predicted to hit $350 billion by 2025.  The drive to online learning has only accelerated  since.  “This is a time of seismic change in education”, say Justin Cooke, chief content and partnerships officer at FutureLearn, a leading social learning platform.  “We’re moving towards a demand-driven world.  People want to be able to learn wherever and whenever they want, from the best experts in the world, with a click”.

Going Digital.  But universities and other educational institutions seeking to develop online program  have found there are many challenges. “The deman for education is growing exponentially,” Cooke says.  “It’s only through digitization and digital delivery that this deman can ultimately be met.  But there are practical things you need to think abut.  What technology to use?  What licenses are needed?  Do they have appropriate security, are they able to guarantee privacy?  What about digital storage and supporting connectivity?  How will the faculty members be trained to facilitate virtual instruction?”  Aside form the technical challenges, there’s the course content itself.  “How do you make a course really engaging and really  effective online with measurable outcomes?” Cooke asks. “It’s not as simple as recording seminar with a video camera in the back your lecture theater.”  FutureLearn has quickly become a leader in onolnine learning, boasting more than 14 million “leaners” worldwide and partnerships with 25 percent of the world’s leading universities internationally.  In March 2020, they launched FutureLearn Campus, which allows their partners to offer short courses to their students and staff.

Removing barriers.  While the benefits for universities in terms of enlarging their pool of potential students and modernizing their offerings are clear, online learning is also crucial to the emerging “life-long-learning” model.  As the nature of work changes rapidly, workers will need to learn new skills for existing jobs (up-skillling) or whole new skills for different jobs (re-skilling).  “Automation and technology are causing a huge shift in the employment landscape,” Cooke says.  “Rising unemployment combined with big skill gaps are driving global need to up-skill and re-skill people to equip their workforces for the future.  The need is now, and the need is real.”

Flexibility for equity.  One solution is “microcredentials”, which can be used to reskill or upskill workers in very specific areas without the expense or time commitment of a traditional degree. “Microcredentials are sort of an unbundling of the degree,” Cooke explains.  “They provide access to affordable learning, they are designed to be more targeted and have directly job-relevant outcomes, and they’re flexible –you fit them into your life and your work.”  A recent piece in Wired Magazine suggests that learners are now seeking micro credentials with a view to stacking them into a degree later on.  Cooke believes that the affordability of micro credentials and short courses is going to remove barriers to education.  “It’s a real benefit of the online model because we can pass on  economies of scale to our learners,” he says, noting that micro credentials can be “stacked” to eventually translate into a full degree, allowing students to pay as they go.  “Thinking about this as being a lifelong journey, we need to ensure that we are providing people with the right sorts of skills that hey need to develop to have a significant ump too economic change in their lives, whether it’s getting back into employment, progressing in their career, or getting into employment in the first place.”

It’s all about making the world a better and more equitable place.  “Without education in a rapidly changing world, when individuals get left behind, economies suffer”, Cooke says.  “The physical limitations of the current education sector make this an inevitability.  Here at FutureLearn, we’re determined to make that history.”    Courtesy of MediaPlanet by Jeff Somers.

What 800 Executives Envision for the Postpandemic Workforce

Responses to a McKinsey global survey of 800 executives suggest a disruptive period of workplace changes lies ahead to acceleration of automation, digitization, and other trends.

The responses to the survey point to a period of disruptive change ahead. Not only has COVID-19 thrown millions of individuals out of work, but the mix of jobs that emerge from this crisis is likely different than those that were lost. People with the lowest incomes and educational attainment have been disproportionately affected, putting strains on achieving inclusive growth and potentially raising income inequality. Small and midsize businesses and communities of color, already more severely affected by COVID-19, are also more vulnerable to disruption from increased automation.

These insights are based on a recent survey of 800 executives, representing a full range of industries in eight countries. Half of the respondents are based in the United States, and the rest work in Australia, Canada, China, France, Germany, India, Spain, and the United Kingdom. The respondents represented businesses of different sizes, with a quarter from companies with less than $1 billion in revenues, and the remainder split between companies with revenues of $1 billion to $10 billion and those with revenues over $10 billion.

Since the start of COVID-19, executives say adoption of digitization and automation technologies has accelerated:

Unprecedented restrictions on travel, physical interactions, and changes in consumer behavior since COVID-19 took hold has forced companies and consumers to change the way they operate. This has spurred digital transformations in a matter of weeks rather than months or years. As nonessential workers shifted to working from home, 85 percent of respondents in the McKinsey survey said their businesses have somewhat or greatly accelerated the implementation of technologies that digitally enable employee interaction and collaboration, such as videoconferencing and filesharing. Roughly half of those surveyed reported increasing digitization of customer channels, for example, via ecommerce, mobile apps, or chatbots. Some 35 percent have further digitized their supply chains, for example, by connecting their suppliers with digital platforms in supply chain management.

Adoption of automation technologies—including robotics, autonomous vehicles, and AI-driven software that can perform processing workflows—has also accelerated during the pandemic, although to a lesser extent than digitization. These trends reflect automation’s ability to facilitate contactless interactions at a time of social distancing and heightened awareness of hygiene, as well as cost pressures that may arise from the economic slowdown caused by COVID-19. Another plus: robots don’t get sick.

For example, during the pandemic, American Eagle Outfitters deployed robots to help it sort clothes in its warehouses to meet a surge of online orders, and IBM saw a surge in new customers in the second quarter of 2020 for its AI-driven Watson Assistant, a platform for deploying chatbots and other customer services. Use of such technologies allows contactless customer interaction in a period when human contact is discouraged and builds resilience by limiting reliance on virus-susceptible employees. Providers of cloud services, such as Amazon and Alibaba, have announced plans to markedly step up investment in cloud services, an indication that they expect increased demand related to changes in the workplace post-COVID.

Nearly half of executives note that their adoption of automation has accelerated moderately, and roughly 20 percent report significantly increasing automation. Across countries, the United States and India stand out, with 83 percent of executives surveyed in the United States, and 70 percent of executives surveyed in India, reporting faster adoption of automation.

Companies across industries are reporting increased adoption of automation. Brain Corp, for example, reported that the use of robots to clean retail locations in the United States had risen 13.8 percent in the first quarter of 2020 and 24.0 percent in the following quarter, compared with the same periods in 2019.4 With a higher volume of packages moving through sorting centers, FedEx and other distribution companies have deployed more robots to mitigate the impact of having fewer employees on site because of social distancing.

Nearly half of executives note that their adoption of automation has accelerated moderately, and roughly 20 percent report significantly increasing automation. Across countries, the United States and India stand out, with 83 percent of executives surveyed in the United States, and 70 percent of executives surveyed in India, reporting faster adoption of automation.

Companies across industries are reporting increased adoption of automation. Brain Corp, for example, reported that the use of robots to clean retail locations in the United States had risen 13.8 percent in the first quarter of 2020 and 24.0 percent in the following quarter, compared with the same periods in 2019.4 With a higher volume of packages moving through sorting centers, FedEx and other distribution companies have deployed more robots to mitigate the impact of having fewer employees on site because of social distancing.

Further reading…

Courtesy McKinsey & Co. by a collaborative effort from Susan Lund, Wan-Lae Cheng, André Dua, Aaron De Smet, Olivia Robinson, and Saurabh Sanghvi.


COVID-19 and jobs: Monitoring the US impact on people and places

COVID-19 and jobs: Monitoring the US impact on people and places

The spread of coronavirus is leaving a wide swath of economic damage in its wake. Our initial analysis, conducted at the beginning of April, examined the impact at the state, national, and occupational level. We estimated that in the shutdown phase alone, up to 53 million US jobs were vulnerable—a term we use to encompass permanent layoffs, temporary furloughs, or reductions in hours and pay.

Since then, demand shocks have been reverberating through all sectors. Now that pandemic-related unemployment claims have been pouring in for several weeks, the losses associated with the initial shutdown are cascading into knock-on effects. While leisure and hospitality accounted for most of the earliest layoffs and furloughs, the share from industries such as retail trade, manufacturing, nonessential healthcare, and professional services has been growing. We estimate that up to 57 million US jobs are now vulnerable, including more and more white-collar positions. By way of context, some 59 million jobs are at risk in the European Union, the United Kingdom, and Switzerland, which have a considerably larger population.

We find significant overlap between the workers who are vulnerable in the current downturn and those who hold jobs susceptible to automation in the future. In addition to the effects of technology, the crisis itself may create lasting changes in consumer behavior and health protocols. To put vulnerable workers on more promising and sustainable paths, the US response should incorporate a longer-term view about the resulting occupational shifts and the development of skills.

Decisive action is critical. After every US recession since 1991, it has taken progressively longer for jobs to reappear. The United States did not regain the number of jobs it lost in the Great Recession until 2014. Given the depths of the current downturn, the country cannot afford to let history repeat itself—and it’s possible to make choices that will head off that outcome. But responding to the twin challenges of a public-health crisis and an economic downturn may require a new playbook, rapid innovation, learning, and adaptation.

More than 26 million Americans have applied for unemployment, but twice that number are vulnerable

About one in six US workers—more than 26 million Americans—filed for unemployment in the five weeks ending April 18. That number erases all of the net job gains since the Great Recession.

In the five weeks from March 15 to April 18, initial unemployment claims surged across the country. Florida, Georgia, Michigan, New York, Pennsylvania, and Texas each had more than a million residents filing for benefits; in California, the number surpassed three million. Viewing these numbers as a share of the total workforce illustrates the magnitude of the downturn (Exhibit 1). In five states—Hawaii, Kentucky, Michigan, Pennsylvania, and Rhode Island—a quarter or more of the workforce has applied for unemployment benefits.

Unemployment claims offer only a partial picture of workforce dislocations. Our analysis shows that more than twice as many workers are vulnerable to reduced hours, pay cuts, and temporary unpaid leave. Moreover, unemployment claims will undoubtedly rise in the weeks ahead as states work through a backlog of claims and more businesses that initially tried to maintain payrolls resort to furloughs and layoffs.

Job losses are rippling through multiple industries and occupations

An analysis of state-level data on initial unemployment claims shows that the earliest wave of job losses, in mid-March, disproportionately hit food service, entertainment, and accommodations. Subsequent weeks have seen a sharp pullback in consumer spending in most categories, leading to job losses in retail, business services, manufacturing, and non-essential healthcare (Exhibit 2).

Examining the week-by-week initial unemployment claims in specific states illustrates this pattern. In New York State, for example, most claims filed for the week ending March 21 came from leisure and hospitality, which accounts for just 10 percent of the state’s workforce. In later weeks, an increasing number of claims came from retail as well as professional and business services. In Michigan, leisure and hospitality accounted for 35 percent of the claims filed in the week ending March 21 but 12 percent in the week ending March 28. Meanwhile, the share from the manufacturing sector tripled.

Looking ahead, the loss of employment will likely continue to cascade. Strained budgets are beginning to force state and local governments to cut public-sector jobs. City governments from Cincinnati to Santa Barbara are already resorting to furloughs and layoffs. A drop in charitable giving is hitting nonprofits, and colleges are anticipating cutbacks. Consumers have been migrating to digital banking during the shutdown, so fewer bank employees may be needed in retail branches.

Online job postings provide an early gauge of hiring trends in specific occupations. Data from Emsi, which consolidates data from more than 100,000 websites, show that job postings have declined by roughly one million since February 2020—a drop of 16 percent.1 The biggest percentage decline came in postings for oil and gas operators (a drop of 56 percent), followed by food-machine operators, bakers, bellhops, auto-insurance appraisers, and parking-lot attendants (all of which declined by roughly 40 percent).

By contrast, demand is spiking for some roles. Translators saw the greatest increase as hospitals added interpreters to treat non-English-speaking COVID-19 patients. Other occupations experiencing a surge in hiring include respiratory therapists, general practitioners, psychiatrists, and epidemiologists (Exhibit 3).

Low-wage, part-time, and minority workers are the most likely to hold vulnerable jobs  While Americans of all backgrounds are feeling the economic pain, many of the newly unemployed in early March were part-time workers, young people, minorities, and women (Exhibit 4).

Our initial analysis, published in early April, found that 86 percent of jobs that the pandemic has made vulnerable paid less than $40,000 a year. Part-time workers were disproportionately represented. But as demand has fallen in multiple industries, growing numbers of full-time and white-collar jobs are being affected. Our updated model finds that as of mid-April, 16 percent of workers earning more than $70,000 a year have become vulnerable (Exhibit 5). However, almost three-quarters of all vulnerable workers earn less than $40,000 a year.

Education: Workers without bachelor’s degrees are nearly twice as likely to hold vulnerable jobs. In MGI’s research on automation in the US labor market, educational attainment emerged as the strongest demographic predictor of future displacement risk. Today the pandemic has put the educational divide in stark relief. Workers without bachelor’s degrees are twice as likely to hold jobs we classify as vulnerable. They account for 58 percent of the US workforce but 82 percent of all vulnerable jobs.

Race: Minorities are more likely to hold vulnerable jobs, especially in large cities. The March 14 household survey data from the Bureau of Labor Statistics (BLS) show that racial minorities make up 20 percent of the labor force but 25 percent of the newly unemployed. This disparity may in part result from a difference in the ability to work from home. White workers are 37 percent more likely than their nonwhite counterparts to hold jobs that can be performed remotely.3

Race is an especially strong predictor of job vulnerability in many large cities where the people staffing retail shops, bars, and restaurants are disproportionately nonwhite. Nonwhite workers are 28 percent more likely than white workers to hold vulnerable jobs in Honolulu, 29 percent more likely in Albuquerque, and 30 percent in Washington, DC.

Age: Younger workers are 35 percent more likely to hold vulnerable jobs. March BLS household survey data show that younger workers were especially likely to be let go by employers. Workers under the age of 35 make up 36 percent of the US labor force but 49 percent of the newly unemployed. In part, this may reflect their greater propensity to hold part-time jobs and their lack of seniority. The generation that first entered the job market in the aftermath of the Great Recession is now going through its second “once in a lifetime” downturn.

Gender: Women sustained a majority of the initial job losses, but that may change going forward. The earliest job losses have hit women harder than men. March enterprise survey data from the BLS found that women made up 59 percent of the initial jobs lost.4 This occurred in part because they account for just under two-thirds of employment in leisure and hospitality, retail, education, and health—areas that accounted for 80 percent of the job losses from February 15 to March 14.5

Many women were also vulnerable by virtue of their part-time status (Exhibit 6).6 Women hold 63 percent of all part-time jobs, which are typically the first to be cut in any downturn. Part-time workers accounted for only 18 percent of the workforce in February but 46 percent of net new unemployment claims in March.

However, the gender disparity in initial job losses may rebalance over time. Our model finds that men are 10 percent more likely than women to hold vulnerable jobs. Job losses were more limited in male-dominated sectors such as construction and manufacturing in March, but they may be harder hit as time goes on. These two sectors combined account for as many vulnerable jobs as retail.

Employers and governments have multiple issues to solve

The ultimate economic impact of the COVID-19 pandemic will be partially determined by how effectively policy makers and business leaders can mitigate structural damage to the economy while containing the virus. While the situation is evolving rapidly, it is clear that supporting the workers and businesses that are losing income during the initial lockdown is a priority. Policy makers have created significant fiscal-relief programs to support workers and businesses; the challenge now is to operationalize those measures. But in this highly fluid environment, the public and private sectors alike will need to adapt and innovate, learn what works and what doesn’t, and adjust as they go.

The issues facing companies

One of the lessons of the last downturn is that completely severing the relationship between employers and employees tends to lengthen unemployment. To the extent that companies can implement reduced hours, temporary furloughs, or creative job-sharing and redeployment programs instead of outright layoffs, the entire economy will be better positioned for a faster and stronger recovery. The Payroll Protection Program, for example, is meant to cover payroll costs so that small businesses can keep workers employed.7

When furloughs and layoffs are unavoidable, employers can take steps to help the newly unemployed land on their feet. Participating in digital platforms can help furloughed and laid-off workers connect with organizations that need temporary help to meet surging demand. Some companies that are downsizing are already forming direct partnerships with organizations that are hiring to help make these workforce transitions faster and more seamless. Furloughs can also provide a window, through online training, for employees to develop the skills that employers envision needing in the future.

Many businesses have rapidly shifted to remote work. But as schools around the nation shut down, working mothers have had to take on more child care. In addition to federally mandated paid sick leave under the Families First Coronavirus Response Act, companies can offer greater flexibility to support parents working from home. To prevent a worsening of gender disparities, it will be important for companies to take parenting responsibilities into account in the current environment.

As companies look ahead to an eventual reopening, they are thinking about how to operate safely, given the need to prevent wider outbreaks and build consumer confidence. This may involve reconfiguring shared office spaces, adding plexiglass screens between customers and frontline workers, acquiring adequate supplies of personal protective equipment (PPE), creating new health protocols, or shifting more work online. Companies that serve the public will have to make adjustments to improve the comfort level of consumers, such as limiting density in commercial spaces, conducting temperature checks, and using contactless payment and pickup methods. The current crisis is forcing innovation on the fly, so employers can also reimagine workplaces and workflows.

 The issues facing policy makers

The deluge of unemployment claims has created significant delays for people who urgently need money in their pockets. A number of states have reduced the backlog by adding staff or upgrading digital processing. If shutdowns need to be prolonged to protect public health, policy makers may need to consider extending this lifeline. Although freelancers and gig workers are now eligible for unemployment, many have found it difficult to navigate application processes that were not developed with their situations in mind. States including Massachusetts are trying to address this problem by setting up portals specifically for independent workers.

To supplement federal loan programs, many states are offering small businesses no- or low-interest emergency bridge loans or grants. Similar programs have been rolled out at the city level in places such as Chicago, Oklahoma City, and San Francisco. A number of cities and states have paused both residential and commercial evictions. California’s state government brought together a consortium of major lenders to offer forms of relief such as grace periods on mortgage payments.

State workforce agencies may also choose to design new education and training programs with the specific goal of helping unemployed workers without college degrees increase their employability when the economy reopens—and for the longer term as well. This could involve courses for high-school-equivalency certificates, remedial courses in literacy and numeracy, and online community-college programs that teach specialized skills required for high-demand jobs (such as nursing).

To reopen economies safely, government officials can work collaboratively with employers to set standards for safe workplaces and consumer protocols, as well as issues such as acquiring enough PPE for industries to operate. Communities need large-scale systems for testing and contact tracing. Addressing such pandemic-related needs can create work for unemployed Americans. California is taking a similar approach with a new program that will use funding from the Federal Emergency Management Agency to pay restaurants to provide home-meal deliveries to seniors in need. Public health and economic recovery are intertwined, and they can be addressed in tandem.

The pandemic is accelerating structural shifts in the economy that were already underway, such as using digital channels to reach consumers, automating operations, and allowing people to work remotely from home. Moreover, some shifts in consumer behavior and demand for new types of work may outlast the current public health crisis. Preparing for the “future of work” has gone from a distant hypothetical to a very immediate priority. Tens of millions of workers need support not only to get through today’s challenges but also to put themselves on a better footing for the future. In the months ahead, we will continue with our ongoing research to track these trends

Courtesy of Susan Lund is a McKinsey Global Institute (MGI) partner based in McKinsey’s Washington, DC,

Survive COVID’s Next Phase.

For small businesses that have survived the coronavirus so far, what’s next? Karen Mills outlines steps that business owners and government should take immediately.

America small-business owners moved quickly when COVID-19 started shuttering shops in March. Fine dining restaurants shifted to takeout. Book shops introduced curbside pickup. Gyms offered classes online.

Business owners, it seemed, just needed to face this once-in-a-lifetime calamity and get through a few months, when normalcy would resume. The Paycheck Protection Program (PPP)—government-funded forgivable loans designed to help businesses pay their employees—would help them weather the storm.

Six months later, there’s still no end in sight to the pandemic and no easy answers for small-business owners trying to survive. Strict safety protocols haven’t been enough to get customers through the door for some small businesses, and many owners—crushed by inventory and overhead costs—are grappling with hard choices.

“This is the worst small-business crisis of my lifetime, and I’ve seen a number of tough moments,” says Karen G. Mills, senior fellow at Harvard Business School. “I’m quite concerned that we haven’t even seen the tip of the iceberg of business closures.”

Yelp, the online review website, estimates that almost 73,000 small businesses in the United States had closed permanently as of July 10. And almost half of owners surveyed in late June by the online business network Alignable said they lacked enough cash to get through one month and were taking in less than 50 percent of their pre-pandemic sales.


“We’re finding that you can’t save businesses by just allowing them to reopen,” Mills says. “Until it’s safe, their employees don’t want to come back. Their customers don’t want to come back. There’s no one out shopping on Main Street.”

The situation appears bleak, but owners still have options, says Mills, who led the US Small Business Administration from 2009 to 2013 and was an Obama cabinet member. Getting through the coming months will require extreme ingenuity and shrewdness from business owners, and additional waves of aid from the federal government.

Three moves small-business owners can take now

Mills offers three recommendations to cash-strapped business owners:

Focus on social media and email to reach customers. The coronavirus pandemic forced many analog companies to embrace digital technology, such as contactless payment tools and online booking software. During the last week of August, about 25 percent of respondents to the US Census Bureau’s Small Business Pulse Survey said they were increasingly using online platforms to promote goods and services.

However, businesses don’t need a comprehensive digital strategy—or even a website—to succeed online. An Alignable survey found that 25 percent of respondents were turning to social media to reach customers while 18 percent were engaging them through email.

The key is to harness the most effective outlet for a firm’s products and services, Mills says, citing the experience of milliner Linda Pagan, owner of The Hat Shop in New York.

“She decided to create these crazy videos and put them on Instagram, and they’ve taken off,” Mills says. “She still takes customer orders over the phone, but now she has a few more sales per day and says that’s enough to make it through.”

Scrutinize every cost. Every dollar matters now. Companies hanging by a thread should try to renegotiate contracts with suppliers and landlords, and refinance debt. Is there a new supplier for a key item the company uses? Would opening only during high-traffic hours reduce electricity bills?

Perhaps for the first time, small-business owners accustomed to monthly accounting might need to track day-to-day spending so they can react quickly to changing economic conditions. Free and low-cost tools from banks and fintech firms can synthesize financial performance on real-time dashboards, making monitoring less onerous.

“Small-business owners tend to focus on their customers, and on their products and services,” Mills says. “They often don’t have time for the accounting and paperwork. But knowing your cash situation is mission critical in tight times like this.”

Concentrate on the best profit opportunities. Small-business owners must identify their most valuable products and services and eliminate everything else. If a restaurant’s tried-and-true burger has a stronger gross profit margin than its artisan cheese platter, it’s time to dump the cheese, at least for now.

It’s equally important for firms to understand their most loyal and profitable customers—who they are, what they buy, and how to engage them. Beyond their purchasing power, loyal customers can become a company’s best advocates, providing powerful word-of-mouth advertising that’s authentic and free.

Innovation like this has been paying off. Sixty-four percent of small-business owners say they can continue operating under current conditions for more than a year, up from 34 percent three months ago, according to a CNBC/SurveyMonkey survey of small-business owners.

For government: Aid that’s easier to access

The US government also needs to do its part and extend aid efforts, Mills says. The Paycheck Protection Program allocated $659 billion in forgivable loans to small businesses that agreed to retain employees and maintain salaries. Almost 73 percent of respondents to the Census Bureau’s weekly Pulse Survey said they had received PPP assistance as of August 29. The program, which expired on August 8, increased a participating business’s self-reported survival odds by 14 to 30 percentage points and likely reduced the number of firms that permanently closed, according to a new HBS study.


While the loans helped many businesses get through temporary shutdowns, critics argued that aid tended to go to wealthier, connected applicants and, in some cases, to publicly traded companies. Despite these problems, Mills considers the program a step in the right direction during an unprecedented crisis.

“PPP was designed to bridge small businesses for eight weeks,” says Mills, who has been advising congressional and business leaders about aid strategies. “No one could have predicted how long this would go on.”

Mills recommends that the US government replenish and restart the Paycheck Protection Program, but find additional ways to support the smallest, most vulnerable businesses, many of which tend to be women- and minority-owned. Alignable’s June survey suggested that PPP applications from minority-owned businesses were twice as likely to be rejected. Mills says that future loans should be simpler, easier to access, and provide more flexible terms to encourage participation.

Before the COVID-19 pandemic, small businesses provided almost half of the country’s private sector jobs and accounted for 44 percent of US gross domestic product. While policymakers are starting to appreciate the economic might of small business, these firms collectively lack the lobbying firepower of large industries at a time when they need aid most, Mills says.

“This is a critical moment for small businesses,” she says. “If we lose too many, it will create a long drag on the ability of the economy to recover. We must move now to provide all the support that we can, from congressional action to just remembering to ‘shop small.’”

Courtesy of the Harvard Business School – Author Danielle Kost is senior editor of  HBR’s Working Knowledge; Karen Mills is a HBR Senior Fellow.