Naumche Ivanovski on LinkedIn and Twitter.

The coronavirus crisis is a world-changing event. Here are seven elements for business leaders to consider as they plan for the next normal.

• Distance is back

Even before COVID-19 hit, there were signs of unease, expressed in calls for protectionism and more restrictive immigration and visa policies. In these ways, people sought, in effect, to create more distance from those unlike themselves.

According to one study, more than three billion people live in countries whose borders are now totally closed to nonresidents; 93 percent live in countries that have imposed new limits on entry, because of the coronavirus. Eventually, the tourists will come back and the borders will reopen, but it is certainly possible that the previous status quo will not return.

• Resilience AND efficiency

Even when lockdown restrictions begin to ease, businesses will need to figure out how to operate in new ways. In short, resiliency—the ability to absorb a shock, and to come out of it better than the competition—will be the key to survival and long-term prosperity.

One implication of this has to do with how supply chains operate; companies are finding themselves vulnerable because they cannot get the parts they need. Supply chains built on just-in-time inventory and distributed component sourcing may well have to be reconsidered, given the way many have been disrupted. Instead, companies will want to build backup and safety plans.

Other key elements of business structure will also be revisited. For example, the Wall Street Journal observed that the crisis has revealed weaknesses in succession plans as leaders get sick and deputies quickly need to be found across all aspects of operations. Companies are learning the hard way that succession planning has to go much deeper than the C-suite, and much broader, responding to possible short-term disruptions as well.

• The rise of the contact-free economy

In three areas in particular—digital commerce, telemedicine, and automation—the COVID-19 pandemic could prove to be a decisive turning point.

Greater automation was already occurring before COVID-19. In late 2017, the McKinsey Global Institute estimated that 60 percent of all jobs could see more than 30 percent of their key tasks automated, affecting 400 million to 800 million jobs around the world by 2030. According to the Brookings Institution, over the three recessions that have occurred over the past 30 years, the pace of automation increased during each.

• More government intervention in the economy

During times of great crisis, such as World War II, citizens have proved willingness to accept—even embrace—greater government control of the economy. Already, there has been economic intervention on a scale that hasn’t been seen for decades, if at all. As of April 10, governments across the globe had announced stimulus plans amounting to $10.6 trillion—the equivalent of eight Marshall Plans. Most spending is directed to three areas—supporting citizens’ basic needs, preserving jobs, and helping businesses to survive another day.

A push to redefine the global public health ecosystem to better navigate possible future pandemics and related threats could provide additional impetus for cross-country public-sector intervention. In the same way that reform of financial institutions gained momentum in 2009, the same could be true for public health in the near future.

At some point, governments may decide to get out of the business of business; how they do so will be complicated and differentiated. How much, how fast, and in what ways governments reduce their economic role will be one of the most important questions of the next decade.

• More scrutiny for business

Rightly or wrongly, there is a perception in many countries that during the financial crisis, financial institutions were culpable for the trauma, accepted billions of dollars from taxpayers, and gave little back. Now citizens all over the world could face higher taxes and/or fewer services in order to pay for the $10.6 trillion committed so far. The public will expect—indeed, demand—that their money be used for the benefit of society at large. This raises complicated questions. What does it mean for businesses to do right by their employees and customers? If a financial institution accepts a bailout, how should it think about calling in loans? When, if ever, is it appropriate to resume buybacks and pay higher dividends?

• Changing industry structures, consumer behavior, market positions, and sector attractiveness

One of the key questions facing business leaders is whether their industry will rebound from the economic shock posed by the virus, or sustain lasting damage. The answer to this question likely lies in an assessment of the degree to which industries find themselves susceptible to the elements highlighted in this article. For example, those that have shown themselves to be less resilient may find it difficult to regain their pre-COVID-19 standing. In the auto sector, for example, companies have relied on global just-in-time-based supply chains; they will be under pressure to change so that continuity of supply is just as valued as cost and speed to market.

• Finding the silver linings

If necessity is the mother of invention—and it often is—there could be some positive outcomes of the coronavirus crisis. These are unlikely to come anywhere near to compensating for the human and economic toll it is wreaking. However, given the general shortage of optimism at the moment, it may be heartening to consider a few encouraging possibilities.

One has to do with the human imperative to communicate. In this sense, the death of distance continues to be very real, and very positive. Individuals, communities, businesses, and governments alike are all learning new ways to connect: almost everyone knows a story of the grandparent who finally learned to Zoom, Skype, or FaceTime.

For businesses, the consequences have been profound. Many have learned how to operate remotely—at a high level and at far greater speed. These practices could well stick, making for better management and more flexible workforces—something that could be particularly useful for many women, the disabled, and those who prefer untraditional career trajectories.

Business leaders now have a better sense of what can, and cannot, be done outside their companies’ traditional processes. Many are beginning to appreciate the speed with which their organizations can move once they change how they do things. In short, the coronavirus is forcing both the pace and scale of workplace innovation. Indeed, as businesses are forced to do more with less, many are finding better, simpler, less expensive, and faster ways to operate.

Review the full article at: https://www.mckinsey.com/featured-insights/leadership/the-future-is-not-what-it-used-to-be-thoughts-on-the-shape-of-the-next-normal