People say that a variety of factors would help them feel safer returning to normal activities.
Many employers reported they are implementing safety measures that employees say make them feel safer.
The big will get bigger as mom-and-pops perish and shopping goes virtual. In the short term, our cities will become more boring. In the long term, they might just become interesting again.
Last weekend, I walked a mile along M Street in Washington, D.C., where I live, from the edge of Georgetown to Connecticut Avenue. The roads and sidewalks were pin-drop silent. Movie theaters, salons, fitness centers, and restaurants serving Ethiopian, Japanese, and Indian food were rendered, in eerie sameness, as one long line of darkened windows.
Because the pandemic pauses the present, it forces us to live in the future. The question I asked myself walking east through D.C. is the question so many Americans are all pondering today: Who will emerge intact from the pandemic purgatory, and who will not?
In the past three weeks, I’ve posed a version of that question to more than a dozen business owners, retail analysts, economists, consumer advocates, and commercial-real-estate investors. Their viewpoints coalesce into a coherent, if troubling, story about the future of the American streetscape.
We are entering a new evolutionary stage of retail, in which big companies will get bigger, many mom-and-pop dreams will burst, chains will proliferate and flatten the idiosyncrasies of many neighborhoods, more economic activity will flow into e-commerce, and restaurants will undergo a transformation unlike anything the industry has experienced since Prohibition.
This is a dire forecast, but there is a glimmer of hope. If cities become less desirable in the next few years, they will also become cheaper to live in. In time, more affordable rents could attract more interesting people, ideas, and companies. This may be the cyclical legacy of the coronavirus: suffering, tragedy, and then rebirth. The pandemic will reset our urban equilibrium and, just maybe, create a more robust and resilient American city for the 21st century.
To see how the pandemic is already reshaping American retail, you don’t even have to go outside and count storefronts. Your receipts and credit-card statements tell the whole story.
On Thursday, the U.S. Commerce Department reported that retail spending in March collapsed by the largest number on record. Travel spending—including on airlines, hotels, and cruises—is down more than 100 percent, if you include refunds. Department stores and clothing stores are facing an extinction-level event after having experienced years of decline. Pockets of resiliency and even strength include grocery stores and liquor stores, which in March had their best month of growth on record. Home-improvement spending is up as well.
Some of these changes are violent interruptions to modern life, like the closing of gyms and cessation of sit-down restaurant service. But in the long term, COVID-19 probably won’t invent new behaviors and habits out of thin air as much as it will accelerate a number of preexisting trends.
One obvious example is that the pandemic is accelerating the retail reckoning. Over the past 50 years, the number of American malls grew almost twice as fast as the U.S. population, to the point that in 2015, the U.S. had 10 times more shopping space per capita than Germany. Such abundance makes no sense in the age of Amazon. Overleveraged, overbuilt, and oversprawled, American retailers had a long way to fall as the country moved toward online shopping. In 2017, and again in 2019, physical-store closures reached an all-time high, led by the decay of suburban totems like Sports Authority and Payless.
The year 2020 may bring the death of the department store, marking the end of that 200-year-old retail innovation after decades of decline. Macy’s has furloughed more than 100,000 workers. Neiman Marcus has filed for Chapter 11. More legacy department stores and apparel retailers will almost certainly follow them to bankruptcy court or the corporate graveyard. As these anchor stores shutter, hundreds of malls that were already wobbling in 2019 will be knocked out in 2020.
The pandemic will also likely accelerate the big-business takeover of the economy. In the early innings of this crisis, the most resilient companies include blue-chip retailers like Amazon, Walmart, Dollar General, Costco, and Home Depot, all of whose stock prices are at or near record highs. Meanwhile, most small retailers—like hair salons, cafés, flower shops, and gyms—have less than one month’s cash on hand. One survey of several thousand small businesses, including hotels, theaters, and bars, found that just 30 percent of them expect to survive a lockdown that lasts four months.
Big companies have several advantages over smaller independents in a crisis. They have more cash reserves, better access to capital, and a general counsel’s office to furlough employees in an orderly fashion. Most important, their relationships with government and banks put them at the front of the line for bailouts.
The past two weeks have seen widespread reports of small businesses struggling to secure funds from the federal government. Larger companies do not seem to be experiencing the same delays. In one particularly controversial case, Ruth’s Chris Steak House—a public company with 159 locations and $87 million of cash on hand—announced that it had secured $20 million from a small-business rescue program that ran out of money before it could help countless independents. (Ruth’s Chris later pledged to return the money, and the federal government replenished the pot, though it will likely run out again quickly.)
Courtesy of The Atlantic by Derek Thompson, More reading…
COVID-19 has created a massive humanitarian challenge: millions ill and hundreds of thousands of lives lost; soaring unemployment rates in the world’s most robust economies; food banks stretched beyond capacity; governments straining to deliver critical services. The pandemic is also a challenge for businesses—and their CEOs—unlike any they have ever faced, forcing an abrupt dislocation of how employees work, how customers behave, how supply chains function, and even what ultimately constitutes business performance.
Confronting this unique moment, CEOs have shifted how they lead in expedient and ingenious ways. The changes may have been birthed of necessity, but they have great potential beyond this crisis. In this article, we explore four shifts in how CEOs are leading that are also better ways to lead a company: unlocking bolder (“10x”) aspirations, elevating their “to be” list to the same level as “to do” in their operating models, fully embracing stakeholder capitalism, and harnessing the full power of their CEO peer networks. If they become permanent, these shifts hold the potential to thoroughly recalibrate the organization and how it operates, the company’s performance potential, and its relationship to critical constituents.
Only CEOs can decide whether to continue leading in these new ways, and in so doing seize a once-in-a-generation opportunity to consciously evolve the very nature and impact of their role. Indeed, as we have written elsewhere, part of the role of the CEO is to serve as a chief calibrator—deciding the extent and degree of change needed. As part of this, CEOs must have a thesis of transformation that works in their company context. A good CEO is always scanning for signals and helping the organization deliver fine-tuned responses. A great CEO will see that this moment is a unique opportunity for self-calibration, with profound implications for the organization.
We have spoken with and counseled hundreds of CEOs since the pandemic first hit. It is clear to us that they sense an opportunity to lead in a new, more positive and impactful way. If a critical mass of CEOs embraces and extends what they have learned during the pandemic, this CEO moment could become a CEO movement—one that is profoundly positive for the achievement of corporate, human, and societal potential. As Rajnish Kumar, chairman of the State Bank of India, reflects, “This will be a true inflection point. I think that this pandemic, in terms of implications, will be as big an event as World War II. And whatever we learn through this process, it must not go to waste.”
The global health crisis and its resulting business dislocations have unlocked change at a pace and magnitude that has made even the boldest and most progressive of CEOs question their assumptions. From what we have observed, there are at least two related areas that are ripe for innovation: goal setting and the operating model.
During the pandemic, many organizations have accomplished what had previously been thought impossible. Cincinnati Children’s Hospital Medical Center (CCHMC), for example, scheduled 2,000 telehealth visits in 2019. It is now handling 5,000 a week—a goal that, prior to the pandemic, it had estimated would be accomplished several years from now and only after a large-scale transformation. At Dubai-based Majid Al Futtaim (MAF), attendance at movie theaters fell (as a result of government-mandated closures) while demand for its online supermarket soared; in two days, the company retrained 1,000 ushers and ticket sellers to work for the online grocer. Without the crisis, that speed and magnitude of reskilling to leverage talent across MAF’s portfolio of companies would never have been contemplated. Best Buy, which had spent months testing curbside pickup at a handful of stores, rolled it out to every store in just two days. In four days, Unilever converted factory lines that were making deodorants into ones making hand sanitizer. Life insurers have wrestled ingeniously with a unique COVID-19-related problem, says Jennifer Fitzgerald, CEO of Policygenius, an online insurance broker: “Some consumers don’t want the examiner in their house. We’ve seen a lot of flexibility from carriers. Some have moved quickly on the electronic medical-record side. We’ve also seen carriers increase the face amount that they’re willing to underwrite using data instead of the medical exam. . . . Overall, I think this has pushed the industry to adopt some changes much more quickly than it otherwise would have.” In a week, companies went from having 100,000 people working in offices to having 100,000 people working from home—a shift requiring systems and policy transformation that under normal circumstances might have taken years.
Of course, the unprecedented scale and speed of the pandemic have created “burning platform” impetus for these feats, but it is still remarkable that organizations have been able to make it happen. These achievements have come partly from people working faster and harder, although this is not the whole story, and many CEOs are taking the long-term view. Says Guardian CEO Deanna Mulligan, “We’ve been worried about our broader team in general because they’ve been working very hard. We’ve found that people are substituting their commuting time with working. Our IT guys are telling us that they’re getting three extra hours a day out of the coders. We’re mandating across the whole company that they can’t work after a certain hour at night or that they have to take vacation because nobody’s taking their vacation days; they don’t want to waste their time off hanging around at home. But it’s going to be this way for a while, and we don’t want them to go a whole year working at this pace without a break.”
CEOs are recognizing that the barriers to boldness and speed are less about technical limits and more about such things as mindsets toward what is possible, what people are willing to do, the degree to which implicit or explicit polices that slow things down can be challenged, and bureaucratic chains of command.
Realizing this, CEOs are appropriately celebrating the magnitude of what their organizations have achieved and considering how to stretch for more. Michael Fisher, CEO of CCMHC, thinks that going forward telehealth will account for up to 50 percent of visits in certain ambulatory settings, and perhaps 30 percent of visits overall. Before COVID-19, less than 1 percent of visits were telehealth. Says Fisher, “I keep pushing myself and our team to think about how we use this inflection point to reimagine our potential together, as opposed to allowing our organization to just go back to the comfort of ‘Let’s do what we’re doing.’”
Research by our colleagues in McKinsey’s Strategy and Corporate Finance Practice has long shown that CEOs making bold moves is vital to achieving outstanding performance, which itself is elusive—only one in 12 companies goes from being an average performer to a top-quintile performer over a ten-year period. Making one or two bold moves more than doubles the likelihood of making such a shift; making three or more makes it six times more likely. Our research has also shown that CEOs who are hired externally tend to move with more boldness and speed than those hired within an organization, partly because of the social pressures that constrain internally promoted CEOs. As a result, we often advise CEOs who are promoted from within to ask themselves the question that famously prompted Andy Grove and Gordon Moore to focus Intel on microprocessors: “What would an outsider do?” Given the performance we have seen during the pandemic, we would now encourage CEOs to ask themselves and their teams a follow-on question: “What would your COVID-19 answer be?” The power that these frames of reference hold, to reimagine the possible and recalibrate what can be achieved, is profound.
Other questions for CEOs to reflect on to help calibrate their aspirations include:
Article Courtesy of McKinsey & Co., By Dewarm Keller, Sneader & Strovink
75% of consumers have tried a new shopping behavior, and most intend to continue it beyond the crisis.
American have picked-up low-touch activities, and some plan to continue them after the crisis.
Expected change to time allocation over the next 2 weeks
Americans are changing how they spend their time, dedicating more time to domestic activities, media, and news.
As economies reopen, 73 percent of consumers are still hesitant to resume regular activities outside the home. They are concerned about going to a hair salon, gym, or restaurant, but are especially worried about shared environments, such as public transportation, ride sharing, air travel, and being in crowded spaces, such as attending large indoor or outdoor events.
US consumer-segment behavior varies significantly across the next-normal trends. We have identified five customer segments driven by optimism, health, and financial concerns, each of relatively similar size. These five segments exhibit the consumer trends to a different degree and have the following characteristics:
Affluent and unaffected: These consumers express general optimism about the future (~20 percent higher than the overall US consumer population), skew male (60 percent), and make more than $100,000 a year. They tend to be able to stay at home during the pandemic crisis, allowing them to shop more online. This group is slightly less price sensitive than other cohorts due to greater job stability.
Uprooted and underemployed: These consumers are feeling major impact on both their finances and health due to job insecurity. They are cautious about how they spend money, with low optimism about future economic conditions. Not surprisingly, this group is trading down to essentials and value, swapping out brands, and shopping online when possible.
Financially secure but anxious: This population is largely 65 years old and older and is generally pessimistic about economic conditions after COVID-19, which has had a major impact on their habits. This group has expressed the greatest need for hygiene transparency, with above-average concerns on safety and well-being and concerns about the ability to get necessary supplies.
Out trying to make ends meet: These consumers are being cautious about how they spend money and feel that their jobs and job security have been heavily impacted by COVID-19. This group has significant representation from minority groups and rural populations. They are less likely to be able to stay at home (hence their lower likelihood to be part of the homebody economy), but they are strongly moving toward shopping for essentials and value.
Disconnected and retired: This category denotes those who are retired, over 65, and have a lower income level than the financially-secure-but-anxious segment. They are broadly optimistic about economic conditions after COVID-19 and are less likely to display any of the next-normal characteristics. Predominantly from Southern and suburban areas of the country, this group has not exhibited significant changes in shopping behavior.
Courtesy of McKinsey & Co.
Well, it’s finally here! A book, well written, that clarifies what we have been trying to say for years…THE FUTURE OF WORK IS ENTREPRENEURSHIP. I heard Kyle describes his book on a webinar, but perfunctorily ordered it. Today, it arrived, and I was blown away! He puts into words better than I have done the fact only widespread sharing of entrepreneurial skills can save our economy and what is happening rapidly to our workforce. People are being “let go”, “fired”, or “displaced” from their long-time jobs. Why? A perfect storm has come together…the Gig Economy of independent contractors, artificial intelligence (A. I.) automating anything repeatable, and now the death knell, COVID-19 economic necessity to eliminate overhead in a time of reduced business.
No one who reads the first 100 pages can possibly disagree. Work as we know it is dead. In order to make a secure income for your family or continue to be a successfully working member of the economy one must find a passion, an interest, or build on a prior experience and become…SELF-EMPLOYED. Entrepreneurship can now be taught and learned thanks to Silicon Valley and one of its Princes, Steve Blank. His Customer Development Process, put together by reflecting back on eight tech startups, gave the world “lean startup”. Thank goodness he did. “Lean” has made entrepreneurship teachable and learnable to ordinary workers. Anyone with DESIRE, emphasis on desire, can learn it. “Lean” validates an idea or a concept with the ultimate buyer or end-user who also helps the entrepreneur design the product. Together they create a “product-market fit” which cements a thing of value that the world needs and wants.
The world economy faces a massive disruption of labor. Jobs are going to machines at an alarming rate, and ramifications will alter everything we know about work. Three forces have been at work since 1990, but will soon go to warp speed. First is the Gig Economy, which is an environment in which temporary positions are common and organizations contract with independent workers. A study by Intuit says there are 53 million freelancers in America today. By 2021 50% of the U.S. workforce will be freelancers. This on-demand work, a gig economy is moving more and more into independent professionals that use mobile and technology to create ecosystems they enjoy.
Second is the automation of anything that is repetitive and can be replaced by robotics; most automobiles are now made by robots. The combination of Artificial Intelligence (AI) and Big Data makes it possible for machines to learn from experience and adjust to new inputs and perform human-like tasks. Deep learning is a type of machine learning that trains a computer to perform human-like tasks, such as recognizing speech, identifying images or making predictions. Such technology is now replacing white as well as blue collar workers.
Because Big Data has grown exponentially, AI and deep learning now can work together. In 2013 SINTEF estimated that 90% of all information in the world had been created in the prior two years. Lots of data is exactly what machines need in order to learn to learn. Google’s DeepMind AI has learned how to read and comprehend what it reads through thousands of news articles.
McKinsey research says that up to one-third of U. S. workers and 800 million globally could be displaced by 2030. They recommend businesses and policymakers act now to keep people employed. The single most impactful solution is to train everyone in entrepreneurship, whose innovative and creative skills can allow workers to transit to self-employment (or a freelancer in the Gig Economy).
Finally, there is an unexpected pandemic from COVID-19 beginning March 2020, which is causing widespread unemployment. A “New Normal” will be slow to form and have eliminated millions of permanent jobs. Nothing offers a more promising solution to those made jobless than their ability to start a small business using lean startup entrepreneurship. By embracing a passion, an interest, or an acquired trade, people can learn entrepreneurship by validating a viable concept using customer development. “Lean” enables anyone with desire to design a successful business model that can be scaled and repeated.
As of the last week of June, 1.48 million workers filed first time claims for unemployment. Initial jobless requests are the nation’s most reliable gauge of layoffs, and Oxford Economics said the latest numbers “paint a picture of a job market in turmoil.” More than 40 million people have filed for unemployment in the past three months, and the U. S is predicted to experience a coronavirus-induced recession through 2021.
Then, working in an office could become a status symbol, most meetings replaced by email, business travel as we know it could be gone, office buildings “elaborate conference centers”, mandatory medical screening a norm, middle management positions cut forever, and 9-to-5 office hours a thing of the past.
The need for large scale training of “lean” entrepreneurship is now mandatory. ERI, Entrepreneurship Resources, is an educational organization dedicated to lean launch training and spreading entrepreneurship. See clintoneday.com and ERI-learneship.org for more.
Trust our blog…get this book. 100% of all proceeds go back to NFTE, the Network for Teaching Entrepreneurship, The Entrepreneurial Mindset draws upon learning methods and case studies from the Network for Teaching Entrepreneurship (NFTE), a nonprofit based in New York City that has reached over 1 million students. All proceeds from the book go directly to NFTE to support its mission.
Lessons from One Iconic American Everyday Entrepreneur Who Overcame Challenges in Life and Business and How Hillsborough Community College is Helping Lift Today’s Everyday Entrepreneurs So They Become Iconic Stories in the Future
“Nothing is an obstacle unless you say it is.” – Wally Amos
Wally was born in Tallahassee, Florida on Wednesday July 1, 1936. For the first twelve years of his life, Wally grew up in the segregated south, and was the only child in an impoverished family in which his parents did not get along very well. When his parents finally divorced, Wally was sent to Manhattan to live with his aunt who resided in Harlem at that time. Life was hard growing up in a broken home as a young man. While he was separated from his parents, and his Aunt Della lacked financial means, she did provide Wally with a home, and stability. One of the few joyous childhood experiences Wally recalled having, was making homemade cookies with his aunt from time to time. As he tracked through high school, Wally eventually dropped out of school to join the Air Force for four years (1954-1957 – Hickam Air Force Base). During that time, he earned his GED, and was honorably discharged from the military in 1957. Wally returned to New York City, went back to college to become a secretary. He worked in the stockroom at Saks Fifth Avenue department store, and eventually he landed a job in 1962 in the mailroom at the William Morris Agency, the nation’s longest running talent agency. Wally was hard working, diligent, driven, and persistent. After some time, he worked his way up to become the first black talent scout in the United States. Determined to land a big act, and prove his worth, he discovered a singing duo from Queens, NY, and signed Simon and Garfunkel to represent them through the William Morris Agency. From there, he went on to also work with Marvin Gaye, and countless other artists.
You might think at this point, that is an interesting story of someone who came from nothing, overcame significant life challenges, served the nation, and attained success. But the story was just beginning. Over time, Wally began to think that he no longer needed to work for an agency and elected to start his own talent agency. In 1967, he left William Morris, moved out to California, took his clients with him, which by then had grown to Simon & Garfunkel, The Supremes, Marvin Gay, Sam Cooke and more. Reflecting on his childhood with Aunt Della, he recalled how her home baked cookies created a sense of family within their home, so he decided to replicate that environment for his clients by baking chocolate chip cookies (based on his Aunt Della’s recipe) and bringing them into the office. The clients loved the cookies and kept encouraging Wally to open a store. He resisted for many reasons, one of which being he lacked experience in operating a retail business and did not have sufficient financial resources.
Wally was clearly good at finding and nurturing talent, but without the formal structure of a business entity like William Morris, he quickly began to realize he was not properly equipped with the requisite knowledge to run and execute a talent agency, and he rapidly began to fall into debt. Finally, in 1975 with a $25,000 investment from Marvin Gaye and Helen Reddy (‘I am woman” fame), Wally Amos took action and opened his first “Famous Amos” store in Hollywood. The store brand grew rapidly, and within seven years (1982), was generating $12 million in revenue (approximately $35 million in today’s dollars). The stores proved so popular that the “Famous Amos” brand ultimately expanded to develop a new distribution channel, selling cookies in supermarkets, a model that would later be replicated by other food specialty chains such as Baskin-Robbins, T.G.I. Fridays, and Starbucks.
By 1984 sales had begun to slow and Amos was forced to sell portions of the business. Amos sold a 51% interest to Bass Brothers Enterprises to rescue the business from financial disaster. That year the company had lost $300,000 as revenues slipped to $10 million, and cash flow challenges emerged. Investors got involved to try to stop the downward spiral, but according to Amos, “they took more of an equity stake each time and did not stay long enough to get the company back on track.” By 1988, Wally was unable to get the business back on track, and without a controlling interest was forced to sell the business for $3 million. Since that time, the entrepreneurial spirit has persisted with Wally Amos who has launched several businesses, including a muffin brand — Uncle Wally’s Muffin Co.–, has written 10 books, and dedicated his life to various adult literacy projects.
“The affable Amos recalled in Parade that he had numerous obstacles to overcome on his long road to success. Growing up poor in the segregated South, he faced adult responsibilities at an early age. Still, Amos said, he had confidence that he could make his way in the world. “You have to focus on what you can do,” he said. “There are people who convince themselves that they can’t do anything with their lives because of what’s happened to them—and they’re right. They cannot. But the reason is that they’ve told themselves they can’t” (https://www.encyclopedia.com/people/social-sciences-and- law/business-leaders/wally-amos.)
Amos is a classic example of a person that developed an entrepreneurial mindset and refused to allow actual, and self-imposed limits to hamper his ability to succeed. His entrepreneurial journey is filled with serendipity, action, and learning by doing. While cookies, and his iconic “Famous Amos” Panama hat and shirt (now in the Smithsonian Museum) made Wally famous, Amos has often said that fame is overrated, and has developed his own take on what is most important to him: “I want to be known as a guy who cared about people. A guy who loved people and loved life.”
Creating the Wally Amos’s of Tomorrow
One shining example of nurturing local everyday entrepreneurs like Wally Amos, is taking place at Hillsborough Community College’s Institute for Interdisciplinary Innovation – The InLab@HCC. Two years ago the InLab@HCC was fortunate to be selected as one of four community colleges in the United States to receive a $250,000 matching grant to standup a small
business seed fund for everyday entrepreneurs. Started as an experiment in 2018, the Everyday Entrepreneur Venture Fund (EEVF) has grown significantly since its inception, both in terms of community impact as well as overall size (now over $500,000 and growing). To date, the InLab’ s EEVF has funded 15 businesses, and recently the InLab@HCC has been working with the National Association for Community College Entrepreneurship (NACCE) to develop phase II for the EEVF on a national scale. The fund is a social impact fund that offers students that complete one of the InLab entrepreneurship academic programs to apply for up to $100,000 in funding. If awarded, the funding is distributed in the form of either a grant, interest free loan, or below market interest bearing loan.
The diversity of the HCC InLab student led businesses is profound on many fronts. First, these businesses have not skipped a beat in the face of the coronavirus pandemic. Many have pivoted swiftly to develop new revenue streams. Some have made tough financial decisions to ensure they survive these challenging times. Others have experienced rapid growth because of the nature of their business i.e. home renovations. Perhaps most important, and meaningful to the InLab family of faculty, staff, and community volunteers that serve as mentors and subject matter expert workshop facilitators is the fact that these HCC student businesses are diverse across many spectrums. The businesses are a wonderful cross section of business types, ranging from retail/e-commerce, manufacturing, nonprofit, and service related. The InLab@HCC EEVF student founders themselves are extraordinarily diverse in terms of gender, race, ethnicity, socio- economic status, age, and several are Veteran owned businesses. The EEVF is a shining example of a local source for supply chain diversity. In the face of COVID-19, when you speak with the EEVF founders, it is inescapable to feel a strong sense of inspiration and positivity about the future. In a time of great uncertainty, the InLab EEVF stories illuminate the importance of adaptability, persistence, and a willingness to act.
References – http://www.nbcnews.com/id/19731831/ns/business-us_business/t/no-longer-famous-wally-amos- still-baking/#.XKkGb_ZFx3c – https://www.encyclopedia.com/people/social-sciences-and-law/business-leaders/wally-amos.
By Andy Gold, Ph.D. @profandygoldlinked in – https://www.linkedin.com/in/profandygold/
Newswise — The COVID-19 pandemic has forced millions of people to work from home, making them ever more dependent on the digital technology that has long enabled them to handle both personal and professional tasks from their smartphones, laptops, and personal computers.
Joël Le Bon has been paying particularly close attention to these developments. The Johns Hopkins Carey Business School associate professor specializes in the commercial applications of digital technology, including its use in sales, marketing, and management. COVID-19’s impact on the digital sphere, he notes, has been extraordinary.
“I used to say that with modern digital sales capabilities, sales changed more in the past five years than in the past 50 years. I should say now that sales changed more in the past five months than in the past five years,” he says.
In the following Q&A, Le Bon offers his views on some of the ways the pandemic has affected the world of digital business.
QUESTION: At the JHU Carey Business School, you co-founded the Science of Digital Business Development Initiative, which states the goal of showing business organizations how to thrive in a digital economy. How has this goal, or the means of achieving it, been affected by the pandemic?
JOËL LE BON: The initiative’s mission is to advance the research, education, and practice aspects of digital business development, offer a leading network to address the profound impact of digital transformation, and open new paths of opportunity for the future of work in the digital economy. The pandemic has made our mission and goal even more relevant by changing organizations’ perspectives on work, leadership, and business interactions with their customers with a radical shift to digital capabilities.
From an organizational standpoint, working and leading from home requires the leverage of digital capabilities, thus raising significant new challenges such as redefining interpersonal engagement, communication, developing people, and sustaining and measuring individuals’ and teams’ productivity. Interestingly, from a go-to-market standpoint, similar challenges apply in terms of redefining interpersonal engagement, communication, developing relationships with clients, and sustaining and measuring value-creating growth for customers.
Although several technologies already exist to support organizations’ digital shift regarding work, leadership, and business interactions, the offering is quite complex and will grow substantially. For example, for the marketing and sales functions, digital capabilities in areas such as virtual offices, video conferencing, messaging and chat, project management, collaborative design, and sales and customer engagements and analytics can truly facilitate collaborative endeavors to engage and serve the customers. Yet, this implies that organizations profoundly rethink their culture, structure, process, and competency models for better digital engagements and with diverse stakeholders.
What types of business and industries do you think will benefit most in the wake of this crisis? And which ones will suffer most?
When it comes to how value is created, it is important to recognize that value is based on content or what is offered, context or how it is offered, and cadence or when it is offered. However, the extent to which that value is mainly provided through a physical experience or a digital experience helps recognize which industries can suffer or benefit the most from this crisis.
For example, in industries such as airlines and transportation, leisure, hospitality, tourism, entertainment, sports, retail, logistics or higher education, value is mainly created through a physical experience, and thus cannot be easily transformed and offered as digitized content and distributed through the Internet. However, other industries where value can be created through digital experiences easily transformed and offered, as digitized content distributed through the Internet, will benefit from the crisis. Examples are media, communication, telecommunications, e-commerce, and information technology, to name a few.
Do you expect a significant long-term (perhaps even permanent) increase in the number of people working remotely, away from the traditional office setting? If so, what would be the pros and cons of such arrangements?
Yes, yet not with the same magnitude in all industries, and for all functions. The technologies to support remote and virtual work already exist. However, the pandemic has intensified the need for a digital shift from a mindset perspective for organizations and individuals, who are thus encouraged to approach work, interpersonal engagement, and communication differently.
The Global Workplace Analytics consulting firm has shown that a typical employer can save an average of $11,000 per half-time telecommuter per year, in terms of increased productivity, lower real estate costs, reduced absenteeism, and turnover. Further, some positive outcomes at the individual level pertain to more independence and autonomy, work flexibility, or time management.
However, some discrepancies exist between employees’ and employers’ perceived main struggles. From an employee standpoint, the most significant concerns relate to unplugging after work, loneliness, and collaborating and communication. From a manager standpoint, the concerns relate to reduced employee productivity, reduced employee focus, and reduced team cohesiveness. Interestingly, if employees struggle to unplug after work, managers should be less concerned about productivity, and more about distress and communication, and their employees’ mental health.
How do you think the COVID-19 disruption will affect the education field, especially in terms of how the “product” and services will be delivered?
Industries that can suffer the most from the crisis, such as higher education, can also benefit the most of the transformative changes the crisis initiated, should they build their business models and value proposition on the radical shift that digital capabilities offer.
Knowledge can be easily produced, transformed, and distributed through digital capabilities. Yet the question of the credibility and reliability of the source of knowledge is of paramount importance; but at what price for the colleges, and cost for the students? The problem with digital-based knowledge as a raw material to be transformed and distributed is that it can be commoditized because of being readily accessible, thus raising the question of price and cost of its accessibility. For this reason, such value should not only be protected at the content level with constant research to advance knowledge, but mainly at the context and cadence levels through the transformation and distribution of advanced knowledge. In fact, this is where the business models and value proposition of higher education should shift, and shift fast.
Before COVID-19, the professor was the main channel enabler for transforming and distributing knowledge content in the context of the classroom, and at the course cadence. Tomorrow, technology-enabled professors will make the difference for the students, beyond commoditized readily accessible content. Consequently, the perceived value of digital college-based knowledge and degrees will shift to well-designed and well-distributed content through virtual, remote experience, and innovative instructions. As students may question the perceived value of college-based knowledge and degrees if they cannot enjoy the physical experience on being on a campus and learn in the classroom with their peers, colleges will need to radically change their very approach to digitally transformed and distributed instructions. In fact, this may also facilitate the transfer of knowledge and education at scale to more students, from a volume perspective. In higher education, there cannot be a new normal if we only wish to come back to normalcy.
As a marketing professor, what’s your view of how advertisers have responded to the pandemic? For example, TV ads that express empathy during a 30-second product pitch – is that effective marketing, or might it run the risk of seeming insincere and calculating?
Effective marketing makes customers understand the value they receive from a product or service. Unauthentic, insincere, and calculating marketing messages do not go a long way, as the most important thing for a company is not the first purchase, but repeated purchases. If such messages do not intrinsically belong to the very values of the brand, customers will not be fooled.
How might the pandemic affect the ways in which sales are conducted?
“Inside sales” – remote and virtual selling where sales professionals use digital information and communication technologies and social selling platforms (e.g., LinkedIn) to connect with, and engage, customers – is the fastest-growing title in the sales industry. It expands at a much higher rate than outside sales, and is regarded as the future of sales. Contrary to outside sales that are performed face-to-face in the field, inside sales also reflects modern buyers’ expectations in their will to use the Internet and social media platforms rather than salespeople as effective sources of information and communication.
COVID-19 made organizations who did not have an inside sales force go to inside sales overnight. The pandemic thus accelerated the digital transformation of sales organizations, and such transformation will remain, because inside sales is an effective go-to-market and go-to-customers strategy. There are four main reasons for this, namely cost, productivity, training, and motivation.
From a cost standpoint, an inside salesperson costs one-third the cost of an outside salesperson. From a productivity standpoint, 30 inside salespeople are likely to sell more than 10 outside salespeople, at the same cost to the company. From a training standpoint, inside sales structures are centralized, which allows inside salespeople to be trained easily and quickly on new product announcements, acquisitions, or internal documents such as compensation plans. And from a motivation standpoint, since inside sales structures leverage powerful sales technologies for interpersonal and customer engagement, communication, and the managing and sustaining of individuals’ and teams’ productivity, this facilitates the leading of inside sales organizations.
Sales is a struggle for everyone, but it is less so for those who understand it, and know how to leverage digital sales capabilities. In fact, digital sales transformation is about making technology focus on the process, so you can focus on the customer.
Courtesy of John Hopkins Carey Business School
In this brief, we report on trends in race and ethnicity, age, and immigration among new entrepreneurs in the United States between 1996 and 2019. The rate of new entrepreneurs captures the percentage of the adult, non-business owner population that starts a business each
month. This is a yearly average, and it measures entrepreneurial activity broadly defined, capturing employers and non-employers and incorporated and unincorporated businesses. The rate of new entrepreneurs includes business owners regardless of business size, origin, growth potential, or intentions.
Highlights: The share of all new entrepreneurs who are Latino more than doubled between 1996 and 2019 while the share who are White decreased over the same time period.New entrepreneurs were largely young in 1996, and were more likely to represent all ages by 2019. In 2019, about 1 in 4 new entrepreneurs was an immigrant. This is close to twice the share of entrepreneurs that were immigrants in 1996.
Who is the Entrepreneur? Race and Ethnicity, Age, and Immigration Trends among New Entrepreneurs in the United States, 1996–2019 | 2020, No. 9
The share of new entrepreneurs refers to the percentage of new entrepreneurs who belong to a specific race and ethnicity. Race and ethnicity groups reported here are Asian, Black, Latino, and White.
The share of new entrepreneurs by race and ethnicity is reported in Table 1. Between 1996 and 2019, the Latino share increased from 10.0% to 22.8%, the Black share increased from 8.4% to 10.1%, the White share decreased from 77.1% to 58.0%, and the Asian share increased from 3.4% to 7.0%.
The share of all new entrepreneurs who are Latino nearly doubled over the time period. In 2009 and 2010, the White and Black shares of new entrepreneurs fell by 4.5 percentage points and 1 percentage point, respectively. In these years, the Latino and Asian shares increased by 4.7 and 1.2 percentage points.
The share of new entrepreneurs by age group is reported in Table 2. Between 1996 and 2019, the share of new entrepreneurs aged 20–34 decreased from 34.3% to 27.2%. Over the same time period, the share of new entrepreneurs aged 35–44 decreased from 27.4% to 22.9% and the share of new entrepreneurs aged 45–54 increased slightly from 23.5% to 24.8%. Those aged 55–64 represented about 1 in 4 new entrepreneurs in 2019 (25.1%), compared to 14.8% in 1996.
The composition of new entrepreneurs in the United States has been aging. By 2019, about half of new entrepreneurs were aged 20–44 and half were aged 45–64. Those aged 20–44 accounted for 61.7% of new entrepreneurs in 1996, compared to 50.1% in 2019, while those aged 45–64 accounted for 38.3% in 1996 and 49.9% in 2019. By 2019, new entrepreneurs were generally likely to be coming from all age groups, whereas in 1996, more than one third were between 20–34.
The share of new entrepreneurs refers to the percentage of new entrepreneurs who are either immigrants or native-born
The share of new entrepreneurs by nativity is reported in Table 3. Immigrants account for 25.4% of all new entrepreneurs in 2019, which represents nearly twice the share of new entrepreneurs in 1996 (13.3%). Over this time period, the share of new entrepreneurs who were native-born decreased from 86.7% to 74.6%.
Data for the rate of new entrepreneurs is one of the four indicators in the Kauffman Indicators of Early-Stage Entrepreneurship Series. Since 1996, it has been compiled by Robert Fairlie using a monthly panel dataset of the Current Population Survey (CPS). See indicators.kauffman.org.
Article from Steve Case, founder of AOL and CEO of Revolution based in Wash., D.C. and backs entrepreneurs outside of Silicon Valley, the “rest” of America.
Most of the $1 trillion that Congress has put into business support so far during the pandemic has been directed to preserving existing firms through the Paycheck Protection Program and the Main Street Relief Fund. Helping those businesses and their workers is vital, but that alone won’t fuel the economic recovery the country needs.
The problem is that many of the businesses backed by PPP or Main Street are going to wind up shutting down. Even when they aren’t facing a global pandemic or economic crisis, about 100,000 small and medium-size businesses fail in the United States every year. New businesses will be needed to replace the ones that permanently close. Moreover, the failure rate is likely to be higher, as many firms were on the wrong side of trends — such as the move to online shopping, convenient food delivery or watching streaming content at home — that the pandemic lockdown has accelerated.
Another consideration: The protests stirred by the killing of George Floyd in Minneapolis police custody have made clear how many Americans were left behind in the pre-coronavirus economy; restoring the way things were before the virus hit won’t address these needs.
Here are three ways Congress can help launch a new, more equitable era of entrepreneurship.
First: Make it easier for the earliest-stage start-ups to receive PPP dollars and for all start-ups to access the Main Street Relief Fund. PPP loans go to existing businesses to maintain jobs but not to new businesses that want to create them. Main Street loans go only to companies that are already profitable; most start-ups are not. That approach is backward: Studiesshow that nearly all net new job creation comes from start-ups, not established businesses.
A PPP revision should allow start-ups to obtain loans based on their plans to create jobs — with loan forgiveness granted only if those jobs materialize. If they don’t, the start-ups should be required to repay the loans before any other obligations. And the barrier in the Main Street lending program that makes businesses ineligible for aid if they were not profitable in 2019 should be removed.
Second, the government needs to be a counterweight to private capital that exacerbates geographic disparities in opportunity as the country responds to the crisis. The pandemic is a devastating tragedy, but adversity tends to be met by the creation of new industries and new businesses. This crisis will stir innovations in medicine, goods and services delivered at home, remote work and learning, and more. Where will these new firms grow? If the decision is left to the private sector alone, almost all of them will be in three states: New York, California and Massachusetts, which attract 75 percent of all venture capital.
Great ideas to respond to this crisis are spread widely across the country — but capital is not. Business assistance programs created by Congress should have a special focus on getting start-ups off the ground in places that have lacked venture capital backing in the past. Sen. Amy Klobuchar (D-Minn.) and others have already proposed such legislation; members of Congress from these neglected areas should insist it is part of any Phase 4 bill.
Finally, lawmakers should step in to address unintended inequalities of opportunity for female and minority entrepreneurs caused by the earlier relief bills. Because these programs fund only existing businesses, they reinforce opportunity gaps. Communities with thriving businesses get more PPP and Main Street aid; those that have lacked capital to get businesses off the ground in the past see little help now.
The solution would be for Congress to direct unused PPP funds to start-ups led by female entrepreneurs and entrepreneurs of color, creating opportunities where they have not existed before. The Main Street Lending program could be modified to extend special debt options to community development groups and minority-focused accelerators to back a new wave of start-ups founded by historically underrepresented entrepreneurs.
There’s no going back to the pre-pandemic U.S. economy. Too much has changed; too many new needs exist. This is a rare opportunity to break with the past and create a better future. Congress should grab it.
Read more: Roger C. Altman: The PPP isn’t a good fit for microbusinesses. Here’s what Congress should do. The Post’s View: Stocks have rebounded. It’s Main Street that still needs relief. Helaine Olen: The coronavirus crisis exposes how America really feels about small businesses Andy Puzder: Despite the rocky publicity, the small-business loan program is really working Robert J. Samuelson: The stock market and economy have parted ways. It’s a FOMO market now. The Post’s View: Despite $322 billion in new loans, the Paycheck Protection Program still falls short