ROT420

t
No Going Back:

os
rP
Challenges and Opportunities
After COVID -19

yo
Moving forward will depend on the recognition that
there is no going back to old ways of doing things.
by Anita M. McGahan and Jason Sukhram
op
AS BUSINESSES CONTEMPLATE the reopening of the economy, the We must also go to the mat to produce products and ser-
only thing that seems certain is that a lot vices to stop COVID. Inspiring companies around the world have
tC

executives have expressed a desire to ‘do the right thing’. But
what is the right thing? How do you plan without knowing even
broad parameters on what will occur, such as when a vaccine
will be available, and what the timetable looks like for the lifting
of all restrictions?
the best answers that we can, given what we know now. A critical
facet of our approach is to use the United Nation’s Sustainable
No
stepped up in recent months by converting activities and chanel-
ling resources on the COVID-critical agenda. Distilleries and
breweries, including Anheuser-Busch and Diageo, are produc-
ing hand sanitizer. Canada Goose, Nike, New Balance, Gap
and a countless number of small and medium-sized clothing
companies are making PPE for healthcare workers. General Mo-
tors, Ford and Dyson are making ventilators. The New England
Patriots’ plane travelled to China to transport N95 respirators to

Development Goals as a north star for where value can be cre-
ated during and post COVID.
A Shared Priority
must be to preserve health and safety unambiguously and with
full commitment of resources and capabilities. A wide range of
interventions are required to make workspaces safe. Physical
- ers home if they appear to be contagious. Employers will have
Do
Massachusetts. Sports franchises around the world continue to
are donating food, shoes, PPE and other supplies to front-line
workers in grocery, transportation, distribution and healthcare.
Each of these acts of solidarity will long be remembered.
Prioritizing health and safety also carries other responsi-
bilities for companies that may be less obvious. Governments
may ask organizations to implement testing and to send work-

ing stations are now standard business needs. Companies must
ensure that workers have appropriate PPE, while also adapting
to deliver any services virtually so that face-to-face interac-
tion with customers is as limited as possible until a vaccine is
available. These and other immediate approaches to physical
distancing are clearly imperative and will need to be thought
through by every employer.
to be ready to adapt quickly to departures from the workplace
by critical workers who test positive on-site. The potential for
prior contagion will have to be addressed based on what those
workers were doing in the days prior to detection. Some organi-
zations are developing A, B and C teams for work rotations to
create defensive capacity, but the duplication of responsi-

rotmanmagazine.ca / 7

This document is authorized for educator review use only by zubair ahmad, Other (University not listed) until Oct 2021. Copying or posting is an infringement of copyright.
Permissions@hbsp.harvard.edu or 617.783.7860
ed
Permanent changes in consumer
behaviour are likely.
steps commensurate with the risk of onsite contagion to others.
As many employees without immunity continue to work from
home, replacing the sent-home worker will be complicated and
yo
sometimes impossible. All of this will delay a business’s ability to
re-establish a sense of normalcy and rebuild towards continuity.
Companies like Twitter and Shopify have responded by institut-
ing permanent work-from-home policies, while others have em-
braced a phased approach while contemplating, planning for and
intensively managing these issues, and other issues like them.
op
The Implications of Changes in Stakeholder Behaviour
In the months ahead, companies both large and small will also
confront other types of disruptions in demand, supply chains,
fnancial burdens, governmental intervention and employee
needs. The simple experience of spending less during lockdown
has left many of us wondering why we wasted so much money
on things that no longer seem important. For many, the loss of
tC
a job or of a family member’s job has created intense budgetary
pressure. Permanent changes in consumer behaviour are likely.
The fnancial burdens arising from the shutdown are likely
to be extensive, and will include the renegotiation of contracts
and a restructuring of obligations that will have an impact on
consumer demand through other routes. Supply chains — infa-
mously fragile in producing PPE at the height of the pandemic
— must now also contend with new kinds of restrictions on in-
No
ternational trading behaviour that will afect costs and prices.
Governmental intervention is not only likely to intensify, but
conficts, tensions, and issues may arise in the demands of lo-
cal, provincial, federal, and international authorities. As a result,
shortages may arise and persist.
Changes in employee needs will also arise from the pan-
demic’s enormous psychological and social toll, including from
loss of loved ones, jobs, savings, stability, and interaction with
others. The mental health of those working from home or simply
Do
remaining inside has worsened. Workers in essential industries
are, of course, exhausted with consequences from COVID that
will be revealed only after periods of months and years. With-
out question, COVID has put an intense spotlight on systemic
income and racial inequalities.
As the economy reopens and these demands intensify,
leaders will look for a way forward. A recent Boston Consult-
8 / Rotman Management Fall 2020
This document is authorized for educator review use only by zubair ahmad, Other (University not listed) until Oct 2021. Copying or posting is an infringement of copyright.
Permissions@hbsp.harvard.edu or 617.783.7860
t
os
rP
ing Group report suggests that now is not the time for precise
budgeting and forecasting, but rather a time for scenario plan-
ning. McKinsey authors emphasize that the future for business
will require resilience and the ability to withstand intense gov-
ernment scrutiny, demand shocks, privacy concerns and sec-
toral disruption.
Figuring out the right approach for your organization will
depend on discerning which stakeholders to serve, how to serve
them, and where to draw boundaries as to what is possible. Some
analysts are suggesting that the economic landscape is ending a
75-year cycle that began during the Great Depression, and that
we should expect a whole new economic system to emerge —
one that refects the values of humanism, collaboration, equity,
and a diferent kind of globalization.
Dealing with all of this is daunting. How do you even begin
— especially while facing resource constraints, a fragile work-
force and reluctant customers? Research in the felds of strategic
management and organizational behaviour points unambigu-
ously to the best place to begin: All business leaders looking for
a way forward for their organizations must reconsider their mis-
sions, purposes and goals over a time horizon aligned with the
process of re-emergence.
For many companies, this will mean looking ahead several
years. Critically, efective goal-setting requires imagining how
the organization will adapt to what we’re now thinking of as a
‘new normal’ that involves much more than persistent social
distancing. COVID-19 has pulled the plug on the accumulating
pressure of climate change, de-globalization, rampant insecu-
rity, structural inequality and unsustainable consumerism. As
the economy reopens, the companies that prosper will be those
that assess their resources and envision efectively how to meet
the needs of stakeholders relentlessly during the forthcoming
period of turbulence in most industries.
One place to look for answers on how to accomplish this is
in the United Nation’s Sustainable Development Goals (SDGs).
These are 17 major goals (see sidebar) developed over a period
of study that involved extensive consultation with stakehold-
ers from around the world, supported by expert analysis. They
focus on addressing social development issues (via goals 1, 2, 3,
4 and 8), and they provide a roadmap for combating inequal-
ity (via goals 5 and 10). They address the major environmental
ed

t
The United Nations’ Sustainable Development

os
Goals (SDGs) To Transform Our World

GOAL 1: No Poverty

GOAL 2: Zero Hunger

rP
GOAL 3: Good Health and Well-Being

GOAL 4: Quality Education

GOAL 5: Gender Equality

GOAL 6: Clean Water and Sanitation

challenges of our time (goals 6, 7, 13, 14 and 15), and they include
GOAL 7: Affordable and Clean Energy
targets for the growth of sustainable and inclusive economic de-
velopment (goals 9, 11, 12, 16 and 17).

yo
GOAL 8: Decent Work and Economic Growth
To be sure, these 17 goals are broad, but each is accompa-
GOAL 9: Industry, Innovation and Infrastructure
nied by sub-goals that are strikingly specifc. For example, the
targets for 2030 under SDG3 include “3.1: By 2030, reduce the GOAL 10: Reduced Inequality
global maternal mortality ratio to less than 70 per 100,000 live
GOAL 11: Sustainable Cities and Communities
births” measured by maternal mortality ratio and proportion of
births attended by skilled health personnel. GOAL 12: Responsible Consumption and Production
Because each SDG was developed through careful and ex-
GOAL 13: Climate Action
op
tensive consultation across a spectrum of sectors, countries and
constituencies, each is supported by a robust logic designed to GOAL 14: Life Below Water
withstand the kind of scrutiny from stakeholders of all types that
GOAL 15: Life on Land
will accompany the post-COVID reopening. Before COVID po-
tentially erased much of the progress made in the last decade, GOAL 16: Peace and Justice, Strong Institutions
the UN estimated that an annual funding gap of $2.5 trillion
GOAL 17: Partnerships to Achieve the Goals
would need to be flled to achieve the SDGs. With COVID as a
tC

catalyst for fundamentally rethinking how resources are allocat-

ed and how our institutions govern the economy, we are on the
precipice of a great reset, and the opportunity for businesses to
make an impact is as large as the need.
Even though society’s goals are well articulated in the organizations’ resources are allocated. The most successful post-
SDGs, there are paradoxes within them that organizations COVID organizations will break the trade-ofs.
must confront to rely on them efectively. Even a brief review This is already beginning to happen. Consider, for example,
shows that these trade-ofs are extensive. For example, how Danone’s ongoing eforts to reorient their business activities
No

do you achieve both climate action and economic growth? In
2018, French President Emmanuel Macron faced a national
emergency after raising the tax on diesel fuel by 23 per cent in
an efort to combat climate change. The ensuing Yellow Vests
movement protested that the tax disproportionately afected
low-income workers with jobs in transportation and distribu-
tion. For many organizations, the imperative for economic
growth under SDG 8 may seem at odds with other goals, such
as for SDG 12 on responsible consumption, and SDG 11 on sus-
Do
around achieving social and environmental impact. In 2006,
Danone embraced a proposal from Mohammed Yunus, the
Nobel Prize winning economist and founder of Grameen Bank,
to produce a product that would specifcally improve nutritional
outcomes for poor children in Bangladesh. From that joint ven-
ture, Grameen Danone demonstrated how market-based ap-
proaches can be leveraged to simultaneously achieve business
objectives and make progress towards the SDGs. This provided a
platform for Danone to evolve its approach and continuously

tainable cities and communities.
For companies, the tensions and trade-ofs between the
goals constitute the innovation agenda for the post-COVID re-
covery and, indeed, for the frst half of this century. Aligning the
missions of organizations to these goals and measuring how it
will contribute to their achievement will be a powerful tool for
responding to emerging stakeholder demands questioning how
embed the goal of improving health and environmental sustain-
ability into its products, services and corporate initiatives, while
establishing social-investment funds to reinvest its capital into
doing the same. In 2020, Danone announced a €2 billion initiative
to transition to a “climate powered business model” focused on
regenerative agriculture, plastic use reduction and a transition to
clean energy.

rotmanmagazine.ca / 9

This document is authorized for educator review use only by zubair ahmad, Other (University not listed) until Oct 2021. Copying or posting is an infringement of copyright.
Permissions@hbsp.harvard.edu or 617.783.7860
ed
Changes in employee needs will arise from the pandemic’s
enormous psychological and social toll.
What Lies Ahead
Where are the greatest opportunities for breakthroughs? While
the options are extensive, following are fve that jump out at us as
being particularly relevant for corporations.
yo
OPPORTUNITY 1: ALIGN WITH SDG 3, GOOD HEALTH AND WELL BEING.
Organizations in the healthcare sector — and any sector that
relates directly to health, including public infrastructure,
food, housing, and education — will be rewarded for deep-
ening capacity, prevention, resilience, and collaboration.
Post COVID, there can be no question that investments in sys-
op
tems to preserve health and life are urgently required. Innova-
tion to accomplish this efectively, resiliently, and efciently will
be heralded for years to come, even if they are initially costly
and even if they challenge the viability of long-proftable health
industry structures that have resisted innovation. The old argu-
ments about how change threatens the quality of healthcare de-
livery will no longer carry the day.
tC
Governments, large insurers and investors are ready now
for improvements to health systems. For example, Singapore’s
TraceTogether technology that enables efective contact trac-
ing, and which was quickly replicated in Australia, inspired sto-
ried rivals Apple and Google to collaborate on a similar solu-
tion. GlaxoSmithKline and Sanof have also collaborated to
combine their innovative technologies to develop an adjuvanted
COVID-19 vaccine. To create one of the frst rapid COVID test-
No
ing tools approved for public access, Canadian-based Spartan
Bioscience repurposed its proprietary portable on-demand DNA
analyzers having previously been successful in testing for infec-
tious disease, precision medicine, and food and water safety.
And in recognizing the need for mental health services among
its members, U.S. healthcare provider Kaiser Permanente es-
tablished a partnership with digital health specialist Livongo to
provide access to critical services.
Do
OPPORTUNITY 2: ALIGN WITH SDG 12, RESPONSIBLE CONSUMPTION & PRO-
DUCTION. Companies will be rewarded for advancing respon-
sible consumption and production without raising prices
that amplify economic inequality and intensify poverty. The
details of sub-goals tell the story: What is needed frst is a change
in our culture of consumption, which has been shaped much
more by marketing than we might want to admit.
10 / Rotman Management Fall 2020
This document is authorized for educator review use only by zubair ahmad, Other (University not listed) until Oct 2021. Copying or posting is an infringement of copyright.
Permissions@hbsp.harvard.edu or 617.783.7860
t
os
rP
The feld of marketing is about to change. COVID is leaving
many consumers without the savings and cash fow to spend ex-
cessively. Luxuries for many are no longer viable. The imperative
for many companies from this change in the structure of demand
is clear: Their portfolio of products and services must be recon-
structed to be deemed more essential — more integral to what
customers will respond to as truly valuable. And the implications
for the supply chain are equally important.
Restructuring production to be more resilient and efcient is
the mandate. Companies will be rewarded for investing to lower
costs, become more resilient, and simplify their value propo-
sitions — all while lowering prices. Prior to COVID, consumers
were increasingly prioritizing a company’s social responsibility
and environmental impact when making a purchasing decision,
giving rise to the importance of customer signals like the BCorp
certifcation, ESG reporting and other forms of impact measure-
ment and management.
While some companies continue to build upon their social
responsibility commitments to maintain customer engagement,
COVID has also forced a number of companies to immediately
respond to changing customer profles. Telecom companies
around the world have waived fees for roaming and long-dis-
tance while increasing data use allowances. Energy producers
are passing cost savings from decreased demand onto consum-
ers, albeit sometimes with the nudge of local governments.
Consumer goods giants like Unilever and L’Oréal are extend-
ing credit and payment relief to help some retail customers and
SMEs manage and protect jobs, while shifting production from
typical consumer products to hand sanitizer.
OPPORTUNITY 3: ALIGN WITH SDG 7, AFFORDABLE & CLEAN ENERGY, AND
SDG 13, CLIMATE ACTION. Climate change and afordable clean
energy will continue to be absolute priorities. While COVID
has contributed to a dramatic drop in price for non-renewable
forms of energy, it has also demonstrated just how accessible
climate improvement is. Demand for renewable forms of en-
ergy is increasing, as costs continue to decrease. Organizations
that innovate in reshaping systems of all sorts to reduce climate
impact will be recognized and supported. Old claims that cli-
mate improvement is too difcult will be resoundingly rejected,
as will claims that massive behavioural change is impossible,
or that sustaining core systems comes inevitably with adverse
ed
climate efects.
The foodgate is now open. Many more businesses than Mi-
crosoft and IKEA will need to follow through on multi-billion-
dollar commitments to become carbon neutral or positive, as the
yo
consequences of climate inaction — or of not also fattening the
‘climate curve’ — remain likely to be magnitudes more severe
than what we’ve seen so far from COVID.
OPPORTUNITY 4: ALIGN WITH SDG 8, DECENT WORK & ECONOMIC GROWTH
AND SDG 11, SUSTAINABLE CITIES & COMMUNITIES. Companies that
directly engage in their communities will win. It has always
op
been true that companies depend on the communities in which
they operate, but now, the strength of any company will be more
deeply connected to the welfare of those in the geographic areas
in which it operates. Companies must stand ready to collaborate
with public-sector actors, non-governmental organizations and
organizations of any type that are co-located to protect the wel-
fare of everyone in their communities. Intense ‘local-ness’ is an
tC
essential mandate that will emerge from the experience of CO-
VID. Within this framework, organizations must demonstrate a
commitment to breaking down inequality. Public-facing state-
ments, while important, will not be enough. Diversity, equity and
inclusion all the way up to the C-suite will be a critical component
of success.
Consider, for example, the sports franchises that have do-
nated to local communities, and UnitedHealth’s $10 million
No
COVID response fund for non-profts in hard hit states as part of
a $60 million commitment to support heavily impacted popu-
lations. Scandanavian Airlines, headquartered in Stockholm,
developed a program with a local university to provide laid-of
workers with the opportunity to fast-track their training to be-
come much needed healthcare support workers. A long list of
early responses from companies shows how inspired engage-
ment is making a profound diference in communities.
Do
OPPORTUNITY 5: ALIGN WITH SDG 9, INDUSTRY, INNOVATION AND INFRA-
STRUCTURE AND SDG 10, REDUCED INEQUALITIES. Companies will be
rewarded for great global citizenship by assuring that they
leave nobody behind from access to their products and ser-
vices. In addition to the mandate for local citizenship, companies
will win by assuring that their capabilities, goods, and services
are globally accessible. Post-war systems designed for efciency
This document is authorized for educator review use only by zubair ahmad, Other (University not listed) until Oct 2021. Copying or posting is an infringement of copyright.
Permissions@hbsp.harvard.edu or 617.783.7860
t
os
rP
through economies of scale in mostly urbanized centres that left
behind the poor and disenfranchised have been challenged at the
core. COVID has made it vividly clear that we are all inextricably
interconnected. Behaviour in parts of the world that appear re-
mote is directly relevant to human experience anywhere else in
the world.
Companies that use new technologies, especially commu-
nication and computing advances, to overcome industrial-era
conceptualizations of scale and of sustainability will win. When
the world urgently needed a tool to remain interconnected as
we began to self-isolate, Zoom demonstrated how its technol-
ogy, its business model and its resilience to challenges was more
relevant than ever. Recognizing the global humanitarian risk of
a lack of respirators in other parts of the world, 3M struck a deal
with the U.S. government to continue exporting its highly cov-
eted N95 masks. And LEGO and the LEGO Foundation quickly
sprung into action to support children with the resources and
digital tools they require to continue learning, whether they were
in a refugee camp in a war-torn country, or waiting out the quar-
antine from their homes.
In closing
Leading a company after COVID will require dealing thought-
fully and sensitively with the pain, sufering, loss and fnancial
consequences of the pandemic for stakeholders across the board:
employees, customers, distributors and communities.
Moving forward will also depend on the recognition that
there is no going back to old ways of doing things. The United Na-
tions’ SDGs provide a roadmap for what the new reality should
look like. Going forward, what will distinguish the winners from
the losers will be a reorientation of the entire organization to cre-
ate value in a new era in which a business’s contributions to posi-
tive social outcomes and environmental sustainability are critical
to its fnancial success, and therefore just as important.
Anita M. McGahan is a University Professor
and the George E. Connell Professor of
Organizations and Society at the Rotman
School of Management and Munk School
of Global Affairs & Public Policy. Jason
Sukhram (Rotman MBA/BASc ‘14) is a Senior Manager with the MaRS
Discovery District’s Centre for Impact Investing.
rotmanmagazine.ca / 11