As the world eagerly awaits a breakthrough that might end the COVID-19 pandemic, many of us are trying to understand how to adapt our professional practices to the circumstances of the health crisis—and to anticipate how things might change in a post-pandemic environment. How can companies nurture customers’ mental health while also driving growth? How can managers foster relationships when they can’t meet with team members face-to-face? How can companies plan for an uncertain future, and how will this momentous global event change how we think of leadership?
On this episode of the Big Question, Chicago Booth faculty field questions from Booth students and alumni about how COVID-19 has changed, and will change, various aspects of management and leadership—sharing perspectives and strategies that can help professionals and their organizations succeed at an extraordinary time.
Hal Weitzman: What will management and leadership look like in the post-COVID-19 era? Welcome to a special edition of “The Big Question,” the video series from Chicago Booth Review. I’m Hal Weitzman, but this time it’s not me asking the questions. It’s our Booth MBA students and recent graduates. Here’s the episode.
Matt Grayhack: Hi, my name’s Matt Grayhack. I’m in the last few weeks of my first year in Chicago Booth’s Full-Time Program. My question is: What should companies be doing to address customer mental health while also driving demand?
Ayelet Fishbach: Consumers’ needs have changed. They’re in a different mental state. They’ve been in the era, pre the pandemic. How are we going to address this as marketers?
As a first step, I would say, let’s analyze what happened. Let’s see how exactly those needs have changed. And in terms of the psychology of this change, we see a shift from approach goals to avoidance goals. We see that for most people, most of the time, when they get up in the morning, they are more likely to think, “How am I going to survive this day? How am I going to stay safe?” than “How am I going to thrive?” instead. “How am I going to act to flourish, to develop myself?”
This is not great news, but hopefully this is temporary, and that will change. With this shift from approach goals—from wanting to do more, to achieve more, to do better— to avoidance goals—to thinking about safety and security—we need to think about how our products, how our services can address that.
As a second step, I would say, we need to recognize that the psychology of consumers is pretty much the same. People still want to feel entertained. People want to feel pretty. On a deeper level, people want to feel that they are doing something meaningful. People are interested in products that connect them with other people. The need to connect, and the need to do something that enables me to express myself: these are fundamental psychological needs, and they are not going to change because of the pandemic.
The ways in which people pursue them are going to change. So what we need to do as marketers is think about these needs and think about how can we help people achieve them when it’s harder to use the usual routes and when the concern is more about survival, my first point.
So for example, if you’re in the business of helping people do something intellectual, well, they cannot go to public places. They cannot interact with other people in museums. Well, what can you do to bring it home? OK, if you’re in the business of helping people to feel more attractive, to feel pretty, we all want to feel good about ourselves. Well, if people don’t feel comfortable going to the beauty salon, what are you going to do so that they can do it at home? If you’re in the business of helping people keep in shape, how are you going to provide these services outdoors, or, again, at home? How are you going to use your creativity to make people able to help people satisfy their goals in ways that they did not know existed?
Companies that do well are companies that adjust. And this is my third and last point. And sometimes evolution is slow. Sometimes trends are changing over time, and we have time to do the market research and fully understand how these changes are taking place and adjust. Sometimes that change happens overnight. And the change that we are seeing now is more of the latter. It’s basically overnight that people stopped feeling comfortable being in certain places with certain people. And we have to see a very fast evolution in the products that people use, in the services that they are using, in the ways in which they relate to others, to the world, in the ways in which they develop themselves. Can you be part of this fast evolution? I certainly hope so.
Nicholas Epley: That’s a great question, Matt. Let me answer the question that you asked, and then I’ll answer a slightly different version that you might’ve asked as well.
You asked how companies can maintain customers’ well-being while also driving growth. One of the big determinants of people’s well-being is their sense of social connection with others. Companies can actually play a meaningful role there, particularly if your company is having direct person-to-person conversations with your customers. Enable your employees to try to take opportunities to have conversations with your customers, to ask your customers how they’re doing. Those moments of social interaction tend to be positive for people and more positive than we expect, even between strangers.
So license your employees to connect meaningfully with your customers. That’ll benefit your customers’ well-being as well as, I bet, your employees’ well-being, and strengthen the relationship between your company and that customer, which might also then drive growth.
The other question that I’d like to answer is a slight variant of the one that you asked, which is how can companies maintain their employees’ well-being while also driving growth or maintaining company success? And there, too, I think we want to pay attention to social connection. Is your company giving your employees opportunities to connect with each other, not just in business contexts, but in personal ways? Do you have book clubs or opportunities for them to talk with each other, just to get to know each other a little bit better? That’s something that companies can do.
The other thing that companies can do is satisfy another critical determinant of our well-being, and that is giving people a sense of meaning and purpose in what they do. One way you can do this is that companies can connect their employees with their end users so that you actually see what positive impact you might be having on other people’s lives. And that’s likely to make your employees feel better about the work that they’re doing and maybe work a little harder to do a good job when they’re at work.
Ricardo el Aouar van Dijk: Hi, my name is Ricardo el Aouar van Dijk. I’m a first-year Full-Time MBA student at Booth. And my big question is, given this current situation, how can companies and individuals better plan for an uncertain future?
Gregory D. Bunch: Ricardo, you have asked a great question. Given this current situation, how can companies and individuals better plan for an uncertain future? The answer I’m going to give you applies to both companies and individuals, but I’m going to focus on you and how you can enhance your own career in this current moment.
We’ll start with the word planning itself. General Dwight David Eisenhower said that “Planning is essential. Plans are worthless.” What did he mean by that? He meant that as situations change, plans need to be updated, but a planner considers various scenarios. They consider success scenarios of various types, failure scenarios, and even weird scenarios.
How do we generate those scenarios? To understand that, let me talk about three roles that you need to play in these uncertain times. You need to think like a philosopher. You need to think like a strategist. And you need to act like an entrepreneur.
Let’s start with the philosopher. A philosopher asks three questions: What is reality? What is the good life? And who am I? Let’s take these in order. “What is reality?” has to do with knowledge representation of a current situation. What is the market reality? How is it changing in light of current situations? “What is the good life?” has to do with the goal and aim that you have. Is it wealth building? Is it service? Is it advancing in your career? The third question, “Who am I?,” is the famous question of identity in philosophy, but for a business person, it has to do with your superpower. What makes you unique? What differentiates you in the marketplace as an individual or as a company? Think like a philosopher.
Second, think like a strategist. The strategist is a person who makes decisions in the present based on learning from the past about how to grow or defend in the future. And as such, the strategist asks four questions: How should we grow? How should we defend? What’s going on in our competitive landscape? And what makes us uniquely valuable? Let’s take the last two questions. What’s going on in the competitive landscape? It’s important in these times that we pay attention to our historic rivals, but also pay attention to new entrants, to startups, changes in technology. We have to pay attention to changes in government and regulatory situations. We have to pay attention to cultural and societal changes. What’s going on in the competitive landscape? And the fourth question we focus on is what makes us uniquely valuable, uniquely valuable to the customer, to the supplier, to the employer? What gives us our differentiating edge? It’s back to the philosopher question of who am I? What is our superpower?
So we’ve looked at “think like a philosopher,” “think like a strategist.” Now we talk about “act like an entrepreneur.” This is the age of the entrepreneur. The entrepreneur asks one fundamental question: What’s the opportunity? The entrepreneur is always scanning the horizon, looking for what’s new, what’s next, what’s the way to take a lower good and transform it into a higher good or service that a customer will pay for. The entrepreneur is creatively combining existing things to create something new, to build businesses, to delight customers, to create jobs and create wealth for herself or himself. And so, in answer to your question, do scenario planning, but do it like the philosopher and the strategist, and then act like the entrepreneur—boldly reaching out for the opportunity to create a better future.
Amy Pho: Hi, my name is Amy Pho, and I’m a second-year student in the Full-Time MBA Program. My big question is: How can companies maintain or build a strong culture given that the remote work environment is likely to stay in place long term?
George Wu: Thanks, Amy, for the question. The question about how you sustain a culture of an organization in this remote world is a challenging one. Well, actually, it might be a challenging one. It actually might be fairly straightforward.
To the extent that organizations have well-articulated cultures, cultures that everyone buys into, a lot of those things, if they’re thought about seriously—we think about how to convert that culture into a more remote environment—are pretty natural. So if we have a culture where what we are is we’re direct with each other in a respectful way, that’s something that translates naturally to an online environment. If we have a culture in which it’s something like: “We’re a fun culture in which we do crazy things,” you know, like a lot of these startup cultures, those kinds of things are gonna be more challenging because I think they really require the spontaneity and being impetuous and doing maybe sometimes silly things and so on.
So one of the things that is important with all of these things is to really think about the culture and to just recognize, as you have, that the culture doesn’t naturally follow through when we move from one mode of interacting face-to-face, where we know how that culture works out and what it means for us to be part of that culture, to a different world, and to be more deliberate, and probably for people in that organization to have conversations about what it actually means.
So there’s a similar kind of thing that happens when the economy is stressful for an organization. Organizations say that their employees matter the most. It’s a culture in which employees come first. And then all of a sudden, we have an environment in which the times are rough. Our profits are going down. Maybe we’re losing money. And the natural thing is that questions of layoffs and things like that come into question. And those are really great tests for thinking about whether these are really things that are really fundamental to our culture or things that we just say. And so in the same way, to the extent that these new environments maybe put in some ways a stress test on some aspects of our culture, that’s actually a good thing.
Juan Garcia: Hi, my name is Juan Garcia. I’m a first year in the Full-Time MBA Program. And my question today is: How is the power balance going to shift in the world after the pandemic? Thank you.
John Paul Rollert: It’s a great question, Juan Garcia, and an important one as well. A sense of invincibility is always a temptation to the strong, as is the assumption that individual risks should be lionized over the more mundane requirements of social security. For a long time now, the United States has been a very strong country, and perhaps the chief defect of that strength has been a tendency to give far too much room to the adventurism of individual risk to the detriment of common security.
Take financial risk. Over the last 40 years, as a consequence of developments in technology, shifts in popular opinion, and changes in public policy, the casino of capitalism has grown to afford more and better games to those who would wage the highest stakes possible. And of course, those who’ve been most successful at that casino have enjoyed spoils unimaginable almost. The amount of money, and therein power they’ve enjoyed, has only grown over time.
But history has thrown all of us something of a curveball over the last 15 years, first in the form of the financial crisis, and more recently, in the form of the ongoing COVID-19 crisis. In the case of both of these crises, the US government has had to step in and backstop the economy to the tune of trillions of dollars. And I believe that experience is going to lead us to rethink the way that we approach questions of risk.
On the one hand, I think what COVID-19 in particular has helped to do is put into perspective the downsides of risk. Death, of course, is the great equalizer. And while it is true that COVID-19 has affected different communities in different ways, none of us has been able to escape its ravages altogether.
In the second case, however, if you think of the actions the federal government has taken to protect the economy, for the second time in a dozen years, you’ve had an instance where the US government has essentially afforded an insurance policy that has most benefited those who are best off among us, and arguably need those insurance policies the least. They’ve effectively played the highest stakes hands in the casino of capitalism, lost, and had their chips returned to them.
And so my own hunch is that on the back end of this, as we’re reassessing the way in which we conduct our business, generally speaking as a national community, we are going to think in much broader terms about the nature of insurance and the way in which we think about risk. And we’re going to afford social insurance in more and better ways to a greater number of people. And that insurance is ultimately going to be paid by those who’ve already accepted its benefits in different ways over the last 12 years. Those who are best off among us are going to be asked to pay more for that insurance they’ve already enjoyed, and therein their wealth, and by virtue of that their power, is going to be reallocated accordingly.
Gregory D. Bunch: Juan, you’ve asked a great question. How is the power balance going to change in the postpandemic world? We’re going to see a continued growth of very powerful companies, oligopolies and monopolies, platforms, and people resisting those. We’re gonna see small companies try to find a way to work with and against these monopolies. We’ll see more David and Goliath battles.
A classic example of that unfolded in the last few weeks here in Chicago as tiny Basecamp, a company with 56 employees, launched a new product, an email product, hey.com, and had to fight with the largest corporation in the world, Apple Corporation. It required tremendous strategic thinking by the senior management of Basecamp and great execution to find a way to tip the balance of power in their favor.
A key to any change in power has to do with strategy, execution, and luck. The nation state, the corporation, the individual who can use strategy effectively, manage and execute the strategy, and gets lucky will have greater opportunity in this new world. So, Juan, I don’t know exactly who will benefit in this new age. I do know that people who master strategy, execute well, and who get lucky are the ones who will come out prosperous in this new age.
Annie Pemberton: Hi, I’m Annie Pemberton, and I’m a member of the Chicago Booth Full-Time MBA Program, Class of 2020. As a new graduate, I will soon be joining a new company in a management role. My question is: How can I best develop relationships with my new team, and what challenges will the current virtual environment present in accomplishing that goal? Thank you.
George Wu: Thanks, Annie, for your question. I think this is a question that I’m sure all of the graduates of the 2020 class have. You’re joining new organizations. Some of you worked in those organizations last summer and probably got to know some people, but a bunch of you are going to organizations where you probably have never really met anybody. Maybe you met somebody during a recruiting visit or something like that, but it’s not as if you really have relationships with those people. So I think it’s going to be a challenge, frankly, to get to know people.
I think there’s two things that are important to think about. One is that we interact and get to know people through our professional meetings, one-on-one, in groups and teams, or whatever. And I think those can be navigated. Part of it is that you have to be very conscious about understanding that you’re joining a team in which people are familiar with each other, their rituals, their jokes, and things like that. And that, as an outsider, those things are always hard when we join these new organizations or new rituals or new teams, but they’re especially hard when people are on Zoom and a lot of the cues that we usually use to kind of decipher things aren’t there. And frankly that others can’t immediately see that we’re puzzled by some of the kinds of things that are going on. So trying to navigate those kinds of things is going to be difficult. And I think that one of the things is that people will understand that if it’s pointed out to them, and to find mentors in your organization to fill in the blanks, to help you to understand how to navigate those things, is important.
The second part is probably harder, which is that a lot of how we make sense of an organization, how we make sense of people, is just by observing how things work on a day-to-day basis. So we see Person A and Person B tend to interact. We see that Person A ignores Person C. We see who has close relationships. We bump into people. We have a conversation, sometimes a professional conversation, sometimes a nonprofessional conversation. All of those things are important.
And what it means is that a lot of the feedback that we get, a lot of the, let’s say, tacit knowledge of how organizations work, is omitted. And what you have to actively do is think that all that, what we’ll call serendipity, is gonna disappear. People aren’t going to accidentally bump into each other. And therefore, in some way, what you have to do is create space in your professional lives for that. And that could be time at the end of meetings just to have casual conversations. It could be time to just check in with people. I think all of that stuff is important, but I think you need to be much more deliberate about things than you would be just joining an organization, which is hard in any case.
Kwaku Yiadom: Hello. I am Kwaku Yiadom, a first-year student in the Booth Full-Time MBA Program. My question is: Is the pandemic going to redefine what we think of as good leadership? Thank you.
John Paul Rollert: It’s an excellent question, Kwaku. 2020 marks the 100th anniversary of the passing of the great German sociologist Max Weber, who died from complications of the Spanish flu. A year before his death, in 1919, Weber famously gave his vocational lectures, one of which focused on politics. In that lecture, among other things, he ruminated on the types of leadership the world might see in the aftermath of the First World War. There were three in total.
The first was what he described as the authority of the eternal yesterday. This is the claim of custom or tradition, the kind of leadership most consistent with the vision of older Europe, of kings and princes, and the claims that they tended to have. For Weber, that particular vision of leadership had been essentially consigned to the historical dustbin with the experience of the First World War, and that, in turn, left two other types of leadership.
One was leadership by rule of legality, by a focus on rationally created rules, put together with an eye toward hard facts and data of how best to rule the world around us. To some extent, this was the fullest expression of the Enlightenment, as realized in intelligent bureaucrats and healthy specialists running the world around us. That was one possible direction.
The second was ruled by charismatic leaders, a resort to that kind of primal force, the power of personality, which has helped to guide decision-making for better or worse for time immemorial. For Weber, this would be a second kind of claim to leadership that might help fill the emotional vacuum left by the departure of kings, princes, and the royalty leaving the leadership scene in a place like Europe.
Well, of course, Max Weber did not live long enough to see the rise of fascism. And in that respect, the kind of full flower of charismatic leadership turned wrong in the late 1920s and ’30s. Nor did he see afterward history changed once again, back to a more technocratic vision that helped to rule countries in the years after the Second World War and the extraordinary growth of the world economy.
Recently, history has kind of changed once again, arguably veering more back in favor of charismatic leadership. We have too long lived in an era where we have exchanged hard data and sober facts for titillation and tweets. We’ve lived very much in an era of music men, but I would suggest that with the advent of COVID-19, the music is coming to a conclusion. My hunch is that as we get through this particularly fraught and anxious period, we are going to have a reassessment of charismatic leadership and find ourselves veering more back toward the technocratic vision that lionizes sober facts and a concern with data and good decision-making over the kind of enchantment that you see with charismatic leadership.
We’ve seen some of the disasters this has led us to, in terms of bad decision-making. And my hunch is that it’s going to lead us, generally speaking, to perhaps be more adult and more accepting of specialized opinion and the way in which it can solve problems for us, as opposed to, again, the titillation of enchantment that comes with charismatic leadership. Maybe that’s hopeful thinking on my part. I guess we’ll just have to see.
Alex Brecht: Hello, my name is Alex Brecht, and I’m a member of the Full-Time MBA Class of 2022. My question is: What do you think are the potential long-term negative side effects of increased remote work? I’ve read a lot about the positives, but very little addressing the negative implications of this arrangement, especially as it pertains to working as part of a team. Thank you.
George Wu: Thanks, Alex, for the question. I think there’s two ways to think about this question. One is how to think about the effects of remote working from home today in this environment, where nobody’s really going to work. Nobody’s really interacting with anybody face-to-face. And then the second question is: How do you think about the negative effects in a world after a vaccine, when we’re back at work, but probably at home one day a week, two days a week, maybe even four days a week, maybe just going to work once a month, and so on. So I think those are a little bit different.
Let me just talk about the first one, which is that I think we’re in this environment now where at least one of the effects of not being at work is pretty obvious, which is just that we’re social animals. People like to see other people for the most part. Being isolated, even with this kind of very, you know, occasional or oftentimes very frequent Zoom interaction, is pretty different. And it means that people feel very isolated, and I think that’s gonna lead a lot of people to be pretty lonely.
The second piece is that it’s just going to be harder to build relationships with people, to build up trust, to get to know people in some kind of intimate way. There’s two major reasons for that. One is that when we interact with people, we use lots of cues. Some of those cues we’re not necessarily aware of, but that interacting with people on computer, those cues are pretty impoverished. We see part of them. We don’t see all of their body language, all kinds of things like that. So I think it’s very hard for people to build up the level of trust that they do when they’re with each other directly across the table, and so on.
The other aspect is that when we interact via the computer, everything is really planned. So I have a meeting with Alex. We’re scheduled to meet on Zoom at 2 p.m. And what that means is that those meetings can be very productive. They can be very efficient, but we don’t have the casual interaction that is really important. So to the extent that I get to know about you and hear about your hobbies and hear about what you did this weekend and where you’re going on vacation, maybe some of that stuff happens in the Zoom conversations, but I think a lot of them end up not have it happening. And therefore, I think it’s harder to really get to feel close with people, and that’s gonna inhibit people’s interactions.
Hal Weitzman: Well, that’s all for this episode. My thanks to our students and our faculty. For more research, analysis, and commentary, visit us online at Review.ChicagoBooth.edu. Goodbye.