Our life is characterized by “more.” More traveling, more appointments, more pay, more sales, more of everything.
As early as during the second half of 2019, I could not help but get the impression that we would be better off doing or having less of everything. My feeling was that others would possibly have the same view, that there even would be a trend within our community to focus on climate awareness, conservation of resources, and sense of proportion.
Then, in March 2020, the Coronavirus landed, pulling out a large STOP sign, and we were finally able to test what it would be like to do or have less of everything.
Now, three months later, I can identify two camps. Camp 1 consists of people and organizations that want to leave this emergency STOP as soon as possible and want to simply continue where they stopped back in March. In Camp 2, there are those who have developed a liking of this form of “less” and who want to preserve part of it, either in their personal or business lives.
I believe traveling will remain in its current decelerated, reduced state for quite a while, and will cover smaller distances. This will certainly have only positive effects on our environment. In contrast, this restrained attitude will lead to declines in revenues, fewer jobs, and potential insolvencies for the tourism industry. The question is: will people eventually turn their backs on mass tourism? And if so: what about the value proposition of the “new” tourism?
The effects of a smaller volume of business travels will be even more significant for the aviation industry. Most airplanes remained and still remain on the ground due to the cancelation of company events, trade fairs, and personal meetings, and we were able to conduct stress tests for teleworking and video conferencing. My own experience has shown that everything has been working fine, at least much better than expected. Now do we really want to go back to the situation in March and do without teleworking and video conferencing - something that has really worked well? Probably not. Many of us will want to stick to some of the good habits that save time, money, and energy in our post-Corona lives.
Maybe these changes in our needs and our behavior were actually being advertised already in the final months before the crisis. In any case, the Coronavirus is responsible for the fact that changes that evolved over the longer term in various industries can no longer be stopped and ignored. The virus is acting as a fire accelerant for industries in distress. In an essay published in the German newspaper Süddeutsche Zeitung entitled “It’s not going to be the way it used to be” (see link below), Karl-Heinz Büschemann gives examples of which industries will not fully recover from the crisis.
The change in the automotive industry has long since been in the pipeline, but it was not entirely actively promoted, especially by the large German car manufacturers. There were unmistakable signs even before the Corona crisis that a “we've always done it that way” attitude would no longer be sustainable. VW’s diesel scandal could have been a wakeup call for the industry. Competition in form of Tesla – a company that exclusively relies on electro mobility and a strong software architecture and which is currently building a plant in Brandenburg, Germany – should have stimulated the industry to respond more quickly. The apparent necessity for more climate protection, as strongly called for by all scientists, and a road infrastructure in German cities and highways on the brink of collapse should have been sufficient to induce change. It seems that the Corona crisis was meant to happen to highlight even more strongly that European car manufacturers have massive overcapacities for combustion engines. Many of the existing jobs will be lost. Conversely, new skills and expertise are required to address the topic of mobility. The question now is: who succeeds in acquiring young talent with a love for IT. Will it be the old familiar names such as VW, BMW or Mercedes, or others?
The virus has demonstrated that many industries are currently faced with an imminent structural change. There is no right to growth! This is due to changed societal and social trends, newly acquired technological skills, limited resources that do not allow for unlimited growth, and newly arising consumer needs. For the industries affected, this means: no more double-digit sales increases, and the end of their business models that have been working well for years or even decades.
“Change is constant”; therefore, it is essential for companies not to lose sight of the already announced changes – even in times of double-digit growth rates and production sites running at full capacity. Being open to change and understanding it as an opportunity to design new business models in due time and to test them in many small steps in a low-risk environment – that’s management at its best.
One of the most common reasons why this does not materialize is the fear of companies to establish competitors in-house and to cannibalize their own products. In my work as an innovation coach, I have very often seen good ideas in companies, but those ideas did not manage to enter into the first trial period as they did not meet the current industry criteria. But this is exactly where opportunities for innovation or even disruption can be found. Hence, the limitation is happening already in the heads of managers and employees, rather than in the company’s structures and processes. In his new book “The Invincible Company”, Alexander Osterwalder analyzes the most critical steps towards an innovative and future-proof company. I will present a brief summary of this publication in my forthcoming newsletter in two weeks.
Conclusion: Not all companies and sectors will be able to reach pre-Corona levels as consumers like you and me intend to linger around this form of “less” in some areas of life.
This text first appeared in my newsletter 'Innovation on Wednesday'. It is published every other Wednesday. For subscription click here