Make or Break: Actions in Times of Crisis

In a perfect world, crises would never occur. Potential disasters would be averted thanks to our advanced technologies, stable infrastructures and ready access to ample resources.

Intellectually we know that no one is fully immune from a crisis, but we take confidence in our ability to avoid or overcome disasters and minimise their impact. It’s not just idealism: being able to go about our daily lives, and make plans and decisions with minimal fear and anxiety, is crucial to a stable and healthy society.

Confidence and optimism however have their dangers. They feed our human instinct to put off dealing with the unknown. When the indicators of a crisis are undeniable, our tendency is to explain it away as an anomaly. Our cognitive biases lead us to see the world as we’d like it to be, rather than as it actually is. The known present is given more weight than the future, so that even when we accept change is inevitable, we expect things to return to the current ‘normal’.

Research suggests that in any given situation, only 15 per cent of people are able to think clearly and act rationally when impending disaster awaits. The rest, unable to comprehend the reality of the situation, look to each other for cues on how to behave. People also fear breaking from the norm or being seen to over- (or under- when toilet paper is involved) react. The majority follow the majority – who happen to have no more idea on what they should do next. It results in tragedy such as where people have failed to evacuate burning structures and sinking ships when there was time do so, or who were saving luggage instead of themselves.

The bias towards the present is even more pronounced in disasters that unfold over a period of time. The slow build up can lead to people dismissing the signs of a crisis. Naysayers focus on the smallness of the shifts to prove it is ‘business as usual’ instead of looking at the cumulative effect to indicate a crisis in progress. This is what is happening with climate change and with the escalating job losses due to digital change.

Crises trigger societal shifts

In the wake of national crises, the way societies think, live, interact and work are invariably impacted. Seeing the pain and suffering of others, not just the personal experiences, collects to form a new social psyche. We see and expect people who survive a personal crisis to come out changed. Confidence, trust, self-identity, priorities, perspectives and relationships can be permanently altered for better or worse.

Yet, we largely neglect to prepare for altered states that crises embed into society, rather we treat them as disruptions that, once over, will allow life to return to normal. Things can appear to do this way at first. Only in time do the new mindset and ways of doing things reveal themselves.

In 2001, for instance, the Western world was shaken by the 9/11 attacks on US soil and the other brazen acts of terrorism that followed, including the bombings in Bali, Spain and London. Suspicion and doomism wormed their way into the Western mindset. On the surface, things eventually returned to normal.

Beneath the surface, suspicion and a distrust of “otherness” normalised. These would manifest themselves into a psyche that not just accepted selfishness, but aspired to it.

Selfishness would become synonymous with security and we reset our subconscious around a permanent survival mode. Under the guise of security, we could exercise our real motivator: selfishness. Refugees would be treated with suspicion instead of compassion. Britain would vote to leave the European Union. SUVs would take over roads as car manufacturers saw the opportunity to position them as the safe family vehicle – safe to you that is, but deadly to others if involved in crashes and deadly to the environment. It is selfishness that enables the anti-vaxxer movement. Selfishness encouraged panic buying and stockpiling household essentials in response to the COVID-19 pandemic, despite the need to do so defying all logic. Perversely, the rise in selfishness leads us to place higher trust in those who demonstrate selfishness, like social media influencers who use offensiveness to garner more followers and politicians who fire up xenophobia and fear of “others” as their platform to office.

Lessons for today from the GFC

The 2007 – 2009 Global Financial Crisis saw millions of businesses shut down, tens of millions lose their jobs and their houses, and billions poured by governments around the world into righting their economies. Angry and distrustful of the government and corporations that had let them down, people turned to what was at hand, in this case their smartphones (the first smartphone, the Apple iPhone launched in 2007). The social response to the credit crisis was to increase the use of ecommerce as people used digital means to buy and sell from each other and to share resources, information and assets, by-passing the traditional channels.

Digital tools proliferated as people used them to save money, like Fitbits instead of gym memberships, Netflix instead of movies, PayPal instead of banks and social media instead of newspapers. Doing business online went from the fringes to the mainstream. It’s no surprise that in this period, digital enterprises began to dominate. Amazon, Apple, Alphabet (Google’s parent company), Netflix, Spotify, Tinder, Uber, Airbnb are just some of those that have redefined whole industry sectors.

When the recession subsided, many businesses saw mobile commerce as an addition to their existing channels to market. What many failed to recognise that during the GFC, the customer mentality shifted. Internet-connected customers were now in control. Businesses that failed to adjust to this mobile-first, always-on, instant gratitude consumer would die the death of a thousand clicks.

Workers who lost their jobs or were employed in low skill jobs would find themselves at a double disadvantage. Not only was work likely to be insecure, inadequate and low-paying, theirs were the jobs least likely to have the opportunity to upskill as employers upgraded their businesses to match the new customer expectations. The result is a gap in digital literacy and capability that grows ever-wider as technology continues to advance.

If we use the benefit of hindsight, we can see what a post-COVID-19 world might look like.

Workspaces themselves will change as enforced social distancing change how view the physical workplace. Open offices may be viewed as an affront to the health and safety of workers. Remote working will most certainly become normal for many organisations as tools and procedures initially implemented to manage the spread of disease become an easier way to do things. Workers save time and money on commuting. Employers save money on real estate and facilities. Employers may find themselves more agile and flexible when they aren’t dealing with groups on-site. Worker engagement may rise if employers learn to trust workers to work even when they aren’t seen.

Workplaces can become more diverse and inclusive. Online translators will reduce language barriers and those less mobile won’t have to confront the physical barriers that make on-site work impractical. Managing people may become a team activity rather than an individualised role as workforces spread in time, place and make-up.

To keep people productive, workplaces will need to enhance the efficiency and accuracy of the knowledge and information people need to work, most likely doing so using artificial intelligence. The at-your-fingertips capability of digital technology can provide people with instant, informed, personalised response to work-related problems. This will spill over to customers’ expectations for their interactions with all organisations.

As it was in the GFC, the COVID-19 pandemic is as much a technology issue as it was an economic one in the case of the former, and health issue in the latter. People living in self-isolation has exactly the same effect as people coping with the recession. They turn to digital solutions to work, shop, communicate and manage their daily needs. It’s entirely possible that within the next twelve months, no business can survive unless it has made a full digital transformation.

Last year the World Economic Forum estimated that 54 per cent of the workforce would be under-skilled for work by 2022. That was before the COVID-19 crisis. The enterprises that survive will do so by upgrading their technology, both to save costs and respond to people interacting online. When this happened in the GFC, laid-off workers hoped to go back to the work they did before, only to find those businesses had gone, had upgraded their systems or had been replaced by new, digital versions.

This crisis has the potential to hit workers harder than the GFC because of the number of enterprises that had already started to implement digital technology, taking advantage of the lower costs of data, accessibility of AI, growing numbers of tech-skilled workers, faster 5G technology and customers’ acceptance of digitally enabled interactions. Many industry sectors today have been shaped by digital native enterprises, those born in the period of GFC uncertainty. In operational terms, for them the COVID-19 crisis will register as little more than a blip. Workers who miss the important opportunity to upgrade their skills on the job now, will suffer a bigger problem than not having the right skills. Skills can be learned. They simply won’t understand how they are supposed to get work done. Given that most people in this situation are the already low skilled, the divide between the advantaged and the disadvantaged is set to grow.

If enterprises and workers aren’t urgently helped to what will be the new reality, the social unrest from fear, illness, unemployment and inequity does not bear thinking about.

Wicked problems need elegant solutions. Tax breaks and welfare cheques are crude solutions that will leave people worse off because once the crisis is over, the benefits will stop. Paying people to attend training is also a limited approach. Trainees need to have a job to go to after the training and as any number of employers will tell you, training doesn’t necessarily translate to having the right skills.

The best place the government can put its stimulus dollars is in small to medium businesses. The SMEs need revenue, not tax breaks. If there’s no income, there’s no tax to be relieved of. Financial help should be given for the sole purpose of making these SMEs training grounds for business owners and their workers to become more digitally competent and competitive.  There are many available, skilled professionals who can facilitate the transition. They are the tech workers, consultants and coaches that are almost all solo or micro-businesses themselves, used to working on contract to deliver on projects.

Australia has ambitions to be a smart nation. To be that, it needs to address the digital skills gap that exists now, is growing and will grow further. That is, unless we take quick and decisive action.

This is our opportunity to make smart decisions for the continued stability and prosperity that has always made us the lucky country.

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