With the rapidly changing COVID-19 landscape, it can be challenging to distinguish temporary shifts from lasting trends. We see eight key COVID-related themes with enduring impacts across social, technological, economic and political dimensions.
COVID-related signal shifts – eight themes
❶ Ways of working
Does remote work become the new normal and office/business travel become the exception?
Likely persistence of remote work has implications for real estate, housing, work culture
❷ Labor force
Will displaced jobs come back? Will automation accelerate?
Digital transformation roadmaps provide timeline and impact for workforce change
❸ Digital commerce
Is this the tipping point for the dominance of the digital economy over the physical economy?
Rebalancing of investment, resources and workforce to support hybrid model of digital and physical
❹ Supply chain & manufacturing
Will existing supply chains return to normal or be reconfigured?
Localizing of the supply chain will drive adoption of enhanced supply chain technology
❺ Continuity & resilience
How will companies bolster Business Continuity Planning (BCP) to ensure resilience? Will ‘as-a-service’ trends accelerate?
Development of new approaches to BCP that cover larger, more frequent and globally concurrent events
❻ Environment & climate change
Is ESG core to how businesses recover? Can this be done while sustaining desired economic outcomes?
Enterprises recognize that investor/public pressure for climate change will persist
❼ Debt burden
Will the large debts weaken the recovery out of this pandemic?
Emerging negative loop between rising unemployment, missed rent and mortgage and bankruptcies
❽ (De)globalization
Will countries increasingly look inwards for prosperity?
Globalization is in reverse, as trade and foreign investment are projected to fall sharply
Bringing trust and technology together is critical for organizations to navigate these themes and position for success in the New Reality.
Trust and technology were key challenges, even pre-COVID
Even before COVID-19, organizations faced significant challenges around trust and technology.
Trust in organizations, government, and media has been declining for several years. Many companies already viewed creating and maintaining trust across key stakeholder groups as a concrete challenge requiring real attention and resources. Organizations have also struggled with major trust gaps in technology with questions of algorithmic bias and lack of confidence in AI-driven decisions. According to the Enterprise Reboot, a collaboration between KPMG International and HFS Research that surveyed enterprise technology leaders across nine countries, less than one-quarter believe people are ready to make decisions based on what an AI-driven machine says.1
COVID-19 has intensified these challenges – and created new ones
COVID-19 has exacerbated these challenges and thrust this topic into the spotlight. Trust has always been essential for agility, transformation and resilience – traits that are even more critical now.
Now, companies must engender trust across key stakeholder groups that they can effectively confront multiple obstacles at the same time. Stakeholders need to believe in a company’s ability to both manage new COVID-related obstacles, as well as the ‘business as usual’ hurdles they faced even before the pandemic. This rests on the ability to pivot and execute new strategies quickly.
For example, the surge in digital commerce and disruption to traditional supply chains has intensified the need for trust that ecosystem partners are both financially and operationally resilient – both that a company will remain ‘in business’ and be able to effectively pivot to meet new demand and tackle unexpected challenges quickly.
COVID-19 has also accelerated the adoption of many technologies across the spectrum. In a recent survey of enterprise technology leaders, 60% of respondents agreed that COVID-19 has created an impetus to accelerate their digital transformation initiatives.2 Confronted with new COVID-related challenges, many companies rushed to implement new technologies on condensed timelines. Many CIOs who had not yet fully embraced cloud suddenly scaled – and fast. Emerging technologies that previously saw hype but limited enterprise adoption – like blockchain, AI, drones and AR/VR – gained interest.
In many cases, these rapid technology deployments led to successful innovation and directly helped in the fight against COVID. But, at the same time, they often heightened existing concerns around trust and intensified questions around cybersecurity and risk practices.
In addition, many enterprises are now facing new challenges around trust. These range from navigating employee safety and privacy considerations as offices reopen to developing entirely new client relationships in this environment.
Building a trusted organization – by design
In today’s competitive landscape, where customers, clients and alliance partners have many options to choose from and can demand more from businesses, building a trusted organization is more important than ever.
Companies must create a new type of trust that will enable them to manage several challenges at the same time. A strong approach is thoughtful and intentional, and takes into account an organization’s diverse stakeholder ecosystem. Companies should integrate trust, technology and governance consciously into organizational structures and overall enterprise strategies. But companies that take a piecemeal, reactive approach to trust and technology will likely trail their peers.
An effective trust infrastructure includes six key elements. Engaging these elements allows organizations to maintain trust and confidence while undertaking significant changes and pivoting to meet new challenges.3
Building an effective trust infrastructure
Purpose & strategy
- Are organizations re-articulating purpose?
- Do employees trust their employers around redundancy decisions?
Leadership & management
- Are leaders trusting employees to work remotely?
- Are leaders perceived as putting ‘people ahead of profit’?
Culture
- How are employers sustaining trust and culture in a remote environment?
- How do companies pursue innovation in a remote working environment?
Systems and processes
- How do organizations ensure that their systems and processes are resilient and nimble enough?
- Adoption of new technologies depends on assurance that technologies can be trusted.
Products, services & operations
- Enterprises need to ensure confidence and trust that the supply chain is operational.
- How are organizations enhancing BCPs to build resilience?
Governance & structure
- Trust is needed to move to flatter organizational structures.
- Are existing governance mechanisms fit for purpose to enable quick decision-making?
Especially during turbulent times, trust helps organizations navigate the next wave of unpredictable shocks. We know that trust enables people and organizations to innovate, experiment, embrace new technologies and ultimately grow. Finding ways to partner trust and technology together will be a game-changer for tomorrow’s successful organizations. How will your company rise to the challenge?
About KPMG
COVID-19 has created unprecedented challenges for businesses and revealed the need for digital transformation at a speed and scale we’ve rarely seen before. KPMG is ready to help your organization navigate uncertainty and prepare for the New Reality. Today, we are working with enterprises in virtually every industry to deploy emerging technologies in response to COVID-19 challenges, recover quickly, and build the resilience to adapt to future disruption. Learn more
Footnotes
- ‘The Enterprise Reboot’ – KPMG and HFS Research
- ‘The Enterprise Reboot’ – KPMG and HFS Research
- KPMG study “Trustworthy by design: A practical guide to organizational trust”
