The COVID-19 inflection point: Learning fast from crisis | Rita McGrath | Big Think Edge

To cope at 19, could you explain what you mean by an inflection point?

I understand you may have a graph or something to share.

I do! So there's one slide which kind of brings it to life. A strategic inflection point is something that fundamentally changes the assumptions that you make about your business. If you think about any business at any point in time, it has a set of things that are possible and a set of things that are not. What an inflection point does is it casts all those assumptions into doubt.

So if you think about COVID-19, right? All our assumptions about people can gather, people can meet freely, you know, people can be together – any business was based on those assumptions. Right now, we’re kind of reeling and trying to figure out, well, what this change in the social environment means for a business model. How are we going to make money? What are we going to do? So this is a perfect example of an inflection point, which is going to really call into question what we thought was true.

Great! So how has this pandemic, would you say, been a teachable moment for us all when it comes to seeing around corners?

Well, I think the thing that will be true about this is the shock to the system. Like, this really throws everything up, you know? It really owns for a reason. So a lot of routines that were in place just because that's the way we've always done things, or gee, you know, way back in the past there was some constraint that made us have to do things a certain way – all that evaporates.

Depending on the duration of this, we're going to see an awful lot of questioning of why we did things that way to begin with. So I think there are going to be many routines and practices that are not going to snap back to the way they used to be. There's going to be a new normal, if you will, and I think that's something that a lot of people haven't quite grasped yet. I think there's this sort of sense of, oh when all this is over, we're just going to go back to the way it used to be. I don't think that's going to be true.

What are some of the assumptions we've all been operating under that are no longer relevant, both short term and long term?

Well, I think if I were to take that sort of really, really macro perspective, I think a lot of assumptions about the purpose of the corporation, the rights that various participants in that organization have to the value that it's created… you know, for many years now we've been dealing with this kind of maximizing shareholder value mantra, which to me has really been responsible for an awful lot of income inequality, the rise of really vast numbers of horrible jobs, the degradation of the middle class, and many, many ills that are now being kind of flushed out.

Interestingly, you're starting to see strikes at companies like Amazon and Instacart. Workers are starting to say, hey, you know, you're making record profits. Many of you companies that are benefiting from this current crisis, we need to participate and we need better protections, and we deserve a voice. I think you're starting to see that sort of beginning of what could be a very sudden shift in sentiment about the rights of people who, you know, to be honest, create value.

I mean, it's workers, it's managers. I mean, you know, the guys at the top, sure they have a role to play, but they're not the ones doing the actual work. I think there's going to be a lot more of a voice for people who have been sort of not really had a seat at the table for a long time.

And so you mentioned to me when we spoke before this about the shaking up of the social order. Can you give examples of that, and what precisely do you mean?

Well, so since really, since the 80s, we've had this notion that owning shares in a company is what's going to give you the right to decide where the resources of that company go. And very often, it's the resources that are going to go into the pockets of people who have shareholder control, right? I think what we're going to see is much more of a return to the way things were back in the 60s and 50s, where there was a sense that corporations existed not just for their executives and shareholders, but, you know, for members of the community, for their employees, to be good corporate citizens and a lot of those kinds of things.

So I think we could begin to see a rewiring of society in a way that could lend itself to far more equality, far more balance in the way that social resources are distributed. Now, if we don't get this right, by the way, I mean, the scenario here is going to be bad. I mean, we're not going to bounce right back.

From what I've been reading from my economist friends, the most cheerful scenario they can think of is something like a 5 to 10 percent shrinkage of world GDP. So, you know, the pie is going to shrink, and you know, people who have already been living on the edge, you know, I mean, if you live paycheck to paycheck, you're already a paycheck behind.

So your resources are exhausted; your buffers are gone. And so, you know, the way society responds to it is going to be very challenging. One of the phenomena that I've been sort of looking back at history to see how Americans – how other societies respond to these kind of cataclysmic events – and I recall Franklin Delano Roosevelt’s 1938 "Rendezvous with History" speech, in which he very publicly said, we're not going to be jerked around by a very few wealthy people controlling the productive resources of our economy.

We're going to do different things, and he ushered in a period of tremendous experimentation and, you know, tremendous ways of instituting social buffers that we've come to take for granted now. But we forget, you know, those things are not given from God. I mean, human institutions have to create those things, right?

Now, so we're getting some questions now. If you could expand on the concept of inflection points and perhaps walk us through a few that you've explored in your book, that would be great.

I'd be delighted! So, as I said, a strategic inflection point is some event that dramatically changes what's possible at any given point in time. So just to take as an example the rise of the direct-to-consumer cohort of companies. So these would be companies like Dollar Shave Club or Casper and mattresses, or Glossier and makeup, Stitch Fix and clothing. These are all companies that have realized that given today's technologies, you don't need the conventional retail value chain.

So you think about a Procter & Gamble, you know, in conventional retail they invest in R&D that allows them to make great products for which they can charge a premium price. They have used their armies of salespeople just to get these things to various retail channels, and underpinning the whole thing is, you know, hundreds, tens of billions of dollars of mass market advertising.

Well, if you think about it, once you've got YouTube, once you've got Facebook, once you've got Amazon Web Services, once you've got Google, you’ve got these huge platforms—the constraints that used to be upon your ability to communicate have radically changed.

So, I mean, it's interesting because if you think about YouTube, just as an example, if you wanted to get a visual message like this one to millions of people worldwide, I mean, back in the day, you had to be a media empire. You had to run your own studio. You had to really be just, you know, on a completely different plane, and that created entry barriers, and that created the need to have assets to participate.

Equally, and so what you find is that today, like two kids in a garage with a smartphone can rival what Metro-Goldwyn-Mayer did, you know, all those years ago. And so, a lot of our assumptions about, "Oh, well, it will be, nobody could take us on, it's too expensive, it's too whatever."

If you think about something like Dollar Shave Club versus Gillette, right? I mean, Dollar Shave Club was all about, like, who needs these guys? We'll send the shavers directly to you! You don't have to deal with the razor fortress in the store because they're afraid of being shoplifted.

And Gillette didn't even see it coming. I mean, you know, for years, their business model was better technology. You know, and if you think about it, what were the big innovations in shaving? Well, in 1990, we had the rise of the Sensor, and some bright spark over at Gillette said, hey, you know, we could put two blades on a stem, and that'll be better than one.

And they had this fantastic cartoon to launch this thing with where like the cartoon, the cartoon, the first blade would come along, trying to pick the hair up from your face, and then the second blade would slice it off! Awesome! This thing was so great, it became a business school case study, kind of the rock of the launch of the Sensor, and this took them for about ten years.

And then about ten years later, they said, huh, we need the next innovation! The next thing to keep the product category alive. What did they come up with? Three blades! This was awesome! And three is better than two, and two is better than one, and charge higher prices.

And they sort of settled back thinking, okay, now we're just going to let that machine run for another ten years. And then tragedy strikes, right? [__] comes to market with the world's first four-bladed razor! I mean, my God, the catastrophe! You can imagine the consternation in Gillette headquarters!

Well, what do they do? They tie everybody up with the lawyers and then they rush to market with five! Yes, five blades! Because five is better! And, you know, I think what's interesting to me about that story is Gillette is an incredibly successful company. Their product line has had a competitive advantage for decades, which, in this day and age, is very hard to pull off.

But their assumptions were all colored by this notion of, two, you know, three is better than two; two is better than one! What if it never dawned on them that, you know, basically a guy and his buddy could come up with a viral video, you know, that would appeal to a certain category of young men, and that this whole business model of shipping direct-to-consumers would ever be economically possible and feasible?

Dollar Shave Club sort of paved the way, and so today we have this entire cohort of direct-consumer companies that have bravely sought out whole new business models based on this inflection point represented by today's modern communication technologies.

Also, exponential thinking comes to mind as a way to understand the rate of change in the world today. How can we shift our thinking into that mindset?

Yeah, I think human beings are terrible at exponential things. We don’t understand the way that these curves work, which is one of the reasons, frankly, why so many countries have kind of bungled the way that the COVID-19 virus has been managed. It's because we don't understand that if on day one you have one, day two you have two, and so forth.

There's a wonderful explanation of this that's given by a Washington Post reporter called Megan McArdle, and she uses the analogy of a lily pond. And she says, well, you know, to understand, right? So if on day one you have one lily, on day two you have two, on day three you have four, and day 46, it takes 47 days to cover the whole pond. At what point is half the pond covered?

And the answer is day 46! So, you know, that rate of exponential growth is something we're very bad at. So I think what we have to do is, you know, take a step back from linear projections, which are well captured in spreadsheets, and really think about what are the extreme cases that we could be looking at and that we need to respond to.

And I think stories from the future, counterfactual thinking, for example, Intel employs science fiction writers, not because they’re making predictions, but because they want their engineers and their designers to be attuned to a world which is quite different from the world that we live in day to day.

And so they want them to be thinking about, what are those exponentially different futures we might want to be getting prepared for, right? And so I just wanted to remind the audience we have questions coming in that if you would like to ask a question to Rita, to put it in the comment box on the bottom left of your screen.

So, Rita, what other mindset shifts would serve us well in this time, do you think?

Mindset shifts? Yeah, well, I think what's kind of interesting to me, and, you know, as someone who's lived in the world of uncertainty my whole life – I mean, I study innovation, so I study contexts in which there's a huge amount of uncertainty relative to knowledge.

What's interesting to me now is we've all been shoved collectively into that world, and so the mindset really has to be not so much about proving that you're right and stressing the point and saying, oh, I have all the answers. The mindset really needs to be around what can I discover, and launching a whole series of very rapid moment experiments.

And so I just finished, in fact, writing a piece talking about what constricted leaders do in this time. I think the first thing you can do is, you know, send a message that we're in a world of high uncertainty, and that's going to require different disciplines of us. And therefore, what we need to do is plan to learn as quickly as possible.

We've got to stop thinking, you know, making a prediction and having it come true is success, and making a prediction and having it not come true is failure. We've really got to get away from that because things are very unpredictable. You know, an exponential situation, you know, it's really, really tough.

So I think some other pieces of advice from the sciences of complexity are something that, you know, a lot of people have misunderstood. So to deal with a complex system—so the difference between a complicated system and a complex one is a complicated system, like an airplane, you know, has lots and lots of parts, but you kind of know what it's going to do once all those parts are assembled because the relationships among the parts are pretty predictable.

So if I turn a crank and move this thing one foot, I should turn that crank and that thing will move that thing one foot every time I turn the crank. With a complex system, on the other hand, elements of it are interdependent, and what that means is, I turn a crank and maybe it goes this way, maybe it goes that way, maybe it goes this way. If I don't turn the crank at all, that thing still may go that way.

And so you've got this systemic complexity that emerges because you've got interdependency between various components of the system, and what you need to be able to do in that kind of environment is very different than what you do when you're in a linear, much more predictable environment.

So, a couple of principles: First is, you want to think about how you can create slack resources in your system, how you can create redundancy. So a very simple idea here to take it very tactically is think about cross-training your people, right? If ten people know how to do each other's jobs, rather than ten people each knowing how to do one-tenth of a job, that by definition creates redundancy!

So, if two people get called out sick, or another person has an issue, the others know how to do it! It's a bit of slack in the system that creates some redundancy. A second principle is you want to be able to cut off the parts of the system that are going wrong so that you can preserve the whole system, the system as a whole.

So a way of thinking about that might be you might want to have self-managing teams in your organization focused on specific areas of activity, and you really want to get authority as close to the coalface as you can. So you want to have people that are actually enmeshed in the phenomenon making decisions about what to do.

Because by the time that a message has gotten from the edge of the organization to the CEO and back again, you know, it just takes a long long time. So, the really interesting design principles that come out of the science of complexity, that I think could be very, very helpful to us now.

So, a big thing we want actionable learning. So, in your mind, how do business leaders create mechanisms right now in a resource-constrained organization for learning fast?

Well, I think this notion of quick experimentation is absolutely key. So, you know, encouraging people to say, what are our assumptions, how are they changing, what do we think about the world, where could we see an opportunity for ourselves? And then really encouraging people to try things and just experiment on a small scale.

If I go back to my Franklin Delano Roosevelt example, what they did because nobody knew what to do—you know, the economy was in crisis, the world order was very unstable, and people really did not know what the answer was—so to me, the answer, the beginning of the answer, is you started to run a series of quick tests, quick experiments, you know, getting people to really try things out.

And I think that's how you start to facilitate cross-organizational learning. I think the more you can give people tools, the better. So a great illustration of this is something they've done at Adobe for a long time, before this current crisis. But I think it's the kind of example others could learn from.

It's something called a kickbox, and a kickbox is a red box, and inside the box is an instruction manual, a notebook for bad ideas, another notebook for good ideas, some post-it notes, because of course, all innovation requires post-it notes, but you know, a candy bar, a Starbucks card, because if all innovation requires caffeine and sugar.

But the most important thing in that box is a small amount of money; it's a $1,000 gift card, and that gift card can be used by anybody who would like to try an experiment. And they don't have to go to anybody for approval. They don’t have to sell their idea. What they do have to do, though, is they have to use the instructions and they have to provide the learning that they gained from doing their experiment, whatever happened, into a common platform so that others can learn from what they did.

And they'll tell you at Adobe that they see this as a way of not only getting more people involved in innovation, but it's also a great training vehicle. Now you’ve got this $1,000; you learn to do an experiment, you learn to get the result, you learn to put that in, and I think it’s a wonderful kind of mechanism for spreading that learning very democratically, almost.

A couple of other techniques I've seen companies use very effectively are small task forces that cut horizontally across the organization. So let’s say that you’re, you know, you’re very concerned about customer service as your people are distributed and working at home. Well, why not get a bunch of you know Millennials or younger people across the organization, get eight or ten of them, put them on this job, and say, okay, you know, your task is to help us think through how we’re going to maintain high levels of customer engagement and customer satisfaction, high levels of employee engagement and satisfaction, you know, with a constrained budget and without a lot of time to do it? So go figure it out!

And sometimes people will come back to you with really interesting ideas that you'd never have thought of without those constraints. So, this is a question from the audience, which is what should businesses and business leaders be focusing on right now?

Well, I think it depends on where you are in the arc of this crisis as it's passing through. So I think, you know, firstly, you want to focus on health, welfare, the well-being of your people. You know, where is everybody? And, you know, once you've sort of secured the basic kind of continuity, then it's how do the people that need to be delivering whatever the organization is delivering, how do they connect?

How do they communicate? You need, I think, sort of a building blocks phase where you need to just get that stuff working. Once you've got it working, then I think it's a question of really stopping and reflecting that what are we going to be doing now?

So, you know, all the basic lessons we seem to have forgotten in the last ten years of, you know, conserve your cash, don't take on more fixed costs than you can afford, you know, try to really look for sources of new revenue as creatively as you can because right now we're at a standstill.

Right? I mean, I know very little revenue outside of the resources needed for the immediate crisis that’s changing hands. Conferences have stopped, sports have stopped. I mean, it's just incredible to me how things have come to kind of a standstill. So I think I'm getting out of survival mode. Then I think it's time to start thinking about, all right, what's on potentially on the other side of this?

What are some of the positive things that can come out of this, and how does that look for our organization? How are we going to position ourselves now in the downturn so that the upturn could really be a great opportunity for us?

And that's the interesting thing about inflection points. You know, if you get on the right side of one, it can take your business to fabulous new heights. If you miss it, or try to resist it, or bury your head in the sand, it can cause your business to dramatically evolve.

What do you think is the opportunity for businesses right now? And we discussed a little bit the other day about businesses that have been started in really bad economic times. Can you give examples of that and what you see could be the opportunity for businesses now?

Sure! Well, I think what we're seeing is the great unfreezing, right? So a lot of opportunities are going to open up because this taken-for-granted ways we've always done things are going to really dramatically shift.

So if you think of a lot of companies, Microsoft, I believe, was founded in a downturn, for example, and came out of that with this vision of a computer on every desk. So I think the kinds of opportunities—so let’s sketch out some areas where I think there’ll be just some really interesting new things to think about.

I think the first one is the environment. I'm thinking about this virus like Mother Nature basically saying, you know, human beings, like you had—like a Jewish grandmother, right? You had your chance; I waited it out. It took you 40 years, and now I’m putting my foot down.

You know, but if you think about it, what we will learn in the next six months about having a physical environment that we live in changes from changes in human activity, I think it's going to open up really interesting new business models and ideas.

Because, you know, we've been unable to run this experiment ever. You know, we've been unable to say, okay, human beings just stop it, and let's see what the effect is. And here we are with a naturally occurring experiment. There are dolphins swimming in the canals in Venice; there’s crystal-clear air in places that kind of have gotten used to permanent smog.

There are people, you know, who are physically challenged by a polluted environment that are now sort of opening their eyes and look—this is gorgeous! Animals, you know, are kind of coming out of their hibernation.

So I think one of the things that's going to be an interesting question is, you know, assuming that we go into some kind of new state of being, I think people are going to be a lot more... [Music] there's gonna be a lot more conversation about how much of this, you know, ecology-damaging, polluting kind of activity do we want to tolerate?

And the other side of that is that opens up entrepreneurial opportunity because there's always going to be somebody that's got a better way to do this right now that it's been shown this is necessary.

So I definitely think the environment is one area where things are going to be radically different. Another area is definitely education. You know, we’re again in another natural experiment, right? We’ve got now dads and moms sort of at home all day with their offspring, and I’m intrigued by, you know, the number of men I’ve spoken to who are like, oh my God, I had no idea how hard it was to try to get anything done with the commitments of family and other people's demands on your time kind of being pressing.

So that's sort of on the personal note. On how we deliver education, I think this is perhaps going to be a real turning point. I think when we look back on this, we’re going to say, okay, what we’re learning about education is that it’s not just the content of a lecture, let’s say. You know, what we’re learning about education is it can be very much bilateral.

So I have one of my co-workers who has two teenagers, and what they’re doing is the slower kids in the class are actually being coached by the kids that are getting the ideas, and they’re happening on the phone. You know, and so one kid will say, oh gee, I missed that division problem in Mrs. Tanner's class, and another kid would say, let me show you how it’s done, and they get together to manage it.

And so you've got these communities now of rather than learning being one way, learning is now more of a community experience for those kids. You've also got the case where learning can be much more democratized, right? So that same content now doesn’t need to be channeled through a channel.

If you think about high school or a college or a university, they’re chapels basically, you know? On one side is your consuming population, your students, and on the other side is your providing population, teachers and administrators.

Well, what would happen if Dollar Shave Club for education and it becomes democratized? So I think there are a number of areas like that where new possibilities are going to open up because the old ways have been, for however long, kind of dismantled.

How do you think business as usual is going to change after this? We were discussing travel and face-to-face meetings, in-person meetings. What do you think the landscape of business will be from that standpoint going forward?

Well, I think there’s going to be a lot more questioning the value of all that stuff. You know, I'm in a community—many communities—of people that just travel all the time. I mean, they’re just road warriors; they’re constantly gone. And, you know, a lot of them are now saying, why am I doing this? You know, why did I fly to Singapore for an hour-and-a-half meeting?

You know, why did I need to be on the road to deliver an hour in the quarter keynote? You know, why did I have to visit 17 sales operations in one week? So I don't think that we're going to ever see the death of face-to-face. I mean, there are, you know, things – we’re social creatures and we value it, but I do think what you're going to start to see, especially because budgets are going to be constrained—I mean, don't forget we're going into a pretty certainly a recession, possibly a very deep one—and you know, people are going to start to be a lot more disciplined about, you know, what really does require that face-to-face fly-across-the-world kind of activity and what can be managed in more remote.

You know, let’s travel intensively. So I think we’re going to question that the value of travel and events and things a lot more. And this is going to be interesting because, you know, a lot of these things take on a life of their own. “Oh, we always have the annual client event in May” or “We always have the annual blood level up.” You know?

And it wouldn’t surprise me at all if we start to see people really saying, wait a minute! Given our goals, is that conference, that event, that meeting really the best way to achieve our goals, or could we get there some other way?

Another sort of layer to that is, do you think about the airlines just as a category? We’ve sort of gotten into this mindset, which is that anybody should be able to buy a ticket and fly across the world for any damn reason that they please, but there’s no constraint whatsoever!

And I wouldn’t be surprised if the whole environmental movement is going to say, wait a minute! You know, we need to put some rails around the growth and the activity of that industry because the reality is, no matter how energy efficient a particular plane flight is, if you have ten more of them five years from now than you do today, you know, it destroys any benefit to the environment of that extra energy efficiency.

So I think, you know, it’s really interesting to think about some of the questions that we’re going to be asking about the legitimacy of some of these industry activities and are we really going to be rethinking some of why we did this in the first place?

Right, so this is a question from the audience. Are there any leaders or organizations that have impressed you with how they are navigating this inflection point right now?

Well, I think what’s been fascinating is the rise to prominence of experts in government. You know, Dr. Fauci would be an example of, you know, somebody who’s calm, reasonable, you know, laying out the vision as they know it. You know, at a corporate level, I mean, you know, just a friend of mine, a woman in mine I know, McLemore, who designs clothing basically for business women, professional women.

And she's an entrepreneur; she started her own business and so forth. And even though her own business is really suffering because nobody's buying fancy clothes right now, she’s taken her garment district factories and devoted a portion of her sewing and physical production to making protective equipment for healthcare workers.

And I just find that so inspiring! You know, that somebody would deliberately do that. And, you know, all across the country there are leaders who are trying to keep people on payroll, you know? Do not have people thrown out on the street. That kind of thing, I think, is really inspiring!

What’s your advice for people looking to seize on the market needs and opportunities that are rising out of this crisis? And how should one look at the world from the perspective of an entrepreneur/innovator at this point in time?

So, I think, you know, this crisis is like any other situation where opportunities are present and entrepreneurs like yourself see them. Right? So you see a gap in the market, or you see an unmet need. So the way that I think about it is, you know, start off with what's the job to be done?

And this is a term that Clayton Christensen popularized. And he said, don't think about people purchasing products or subscribing to services as much as you do about hiring them to get a job done in your life. And that, so when you understand what the job is to be done, then you can see different ways that that job could be addressed, that the job could be met.

And so I think with respect to the crisis in particular, you know, that's where you can start to look at where there are likely to be scarcities, where are there likely to be surpluses? I mean, interestingly, we are producing— the world is producing so much oil right now, there is actually, for the first time in my living memory anyway, the viable threat that we won’t have any place to put it!

The storage spaces are just running out! So, you know, they sort of checklist of things to run down as scarcities, surpluses. Where are their resources in one place that could potentially be mobilized in another place? And that’s often the seed of entrepreneurial good.

Where are people with, you know, important jobs to be done, where they just can’t get them in any reasonable way? So I think, I think sort of lenses that you look through these things is really, is there an unmet job that these are too expensive to get done? Or there can't be done, or whatever there's a barrier? And, and that's where the entrepreneurial opportunities are likely to emerge.

And so, this is another question. I know that your business focus, but do you have any thoughts about how we can personally learn from such an unprecedented event with no endpoints clear yet?

Yeah, absolutely! And one of the chapters in my book talks about what do you do at a personal level, right? When so much of what you may have assumed is going to be just very, very different and how do you build that sort of personal resilience in?

And I think the first thing to think about is if the world around you is changed utterly, you know, think differently about your goals. So, the kind of conversation I often have with corporate people is you ask them, what is it you want to achieve? And they'll say, I want to be in level 3, you know, Q4, whatever. I want to be a marketing master or whatever.

And you say, well, why do you want to do that? And they’ll say, because, you know, that's the hierarchy. That's where I want to be! So instead think about it in terms of, well, I’d like to be that because I want to do creative work, I want to open a space for other people, I want to really have people that energize me around me all the time, and I want the output to be visually beautiful and stimulating, really, really deeply for artistic creation or something.

Well, if that’s what you want, my encouragement would be, there's many different ways of getting that! Now, being a level 3, EQ, whatever may be one of those paths, but one thing that crisis is going to do is open up a lot of really different paths to getting to those kinds of goals so I think the more clear you can be about what are the things that energize and excite you, even if the way you thought you were going to get there may not— the path that you could have—keep that in the back of your mind as you're making decisions.

I think a second thing to remember is—and this gets back to this notion of unfreezing—I think a lot of the barriers to opportunity that have existed for many, many people in our society are likely to be really challenged.

For example, the fact that many jobs today require a bachelor’s degree, right? Why is that? Basically, it’s for the convenience of the hiring department. It allows you to sort out the number of applications, and you can just throw all the ones without bachelor’s degrees in the reject pile.

And then you’ve got a much smaller pile of applicants you have to deal with. And the sad part of it is many jobs require a bachelor’s degree don’t actually require a bachelor’s degree to be done, right? And there was a recent Harvard study which basically looked at degree inflation in our economy.

So imagine now that we’re all in this virtual world where learning is very, very accessible, you can pick up new skills really quickly. Imagine if you could have credentialing of what you can actually do without having to have a degree.

Instead, what you've got is some kind of credential by a reputable authority that says, you know, yes, Victoria can do XYZ and here are the three projects she's worked on where she's demonstrated that! Well, my God, who wouldn’t want to have that level of granularity about what somebody could do if you were hiring someone, right?

And so I think, you know, one of the possible personal things to think about is what are the barriers that were in place that may be radically reshaped that could open up an opportunity for the future?

I think it's also really important to not wallow in the loss of what was too much because it's gonna be different! I mean, I don't know how exactly, but the world ahead of us is definitely going to be different, and it's gonna be tough for an awful lot of people! And I don't think we should incite of that, but out of those kinds of seismic shifts, almost often come, you know, new green shoots!

If we truly are heading towards this environment—and I hope we are—where we're starting to have a more balanced view of how the resources in our society are distributed, that could be a better kind of environment in which to live our lessons of our careers.

So for an individual, are there reflection exercises that you recommend for making the most of this time?

Oh, absolutely! So, one of the things I talked about in the book is an exercise that I used to do when I was at Wharton. I did my PhD there, in which we brought to Colombia in our advanced management program, and we call it the fortune exercise.

So the instructions are you imagine yourself five years or ten years, some period in the future, and some reporter is going to write about your amazing career, right? Your amazing life, and you're going to write that article, a five years from that!

And so the article will talk about, you know, what was your leadership style, what were some of the critical values that caused you to make the decisions the way that you did? How did you empower your people? How did you set an example for others? So sort of what were you like as a leader?

And the next chapter is what happened to your family during this time? You know, what—you know, how did you manage to thrive? How did they manage to thrive? How did you guarantee or how do you balance their success with your success as a person?

And then the last piece is really a kind of community. How did you fit into the broader community? How did you extend the reach of what you did? And so the exercise is really one, if you could do it, you could paint that picture of the future and work backward. You know, what decisions would you want to make today that would help you bring that future into reality?

Now, it’s not a prediction, right? I'm not a huge believer in predictions because the world is so uncertain. But it's sort of a guiding set of principles that can take you forward. A great resource for this particular question is Clayton Christensen's book, "How Will You Measure Your Life?"

And among the things he says in that book, he tells a very poignant story about going back to his Harvard reunions. You may have heard this story, read it yourself, but he said, you know, I went back at five years, and everybody had great jobs, and they were all terrific and starting families. It was all exciting. And go back ten years, and you know, some people are looking tired and haggard.

Go back twenty years, you know, they're getting divorced, their kids are alienated; they're not happy people. And he said, well, was it their intention to have that be the outcome twenty years after graduation? And he said, no, it wasn't, but they kind of stumbled into that.

And so his argument, and the one that I make as well, is be intentional about it! You know, make decisions on the basis of something intentional you're thinking about for your future.

So this is sort of a follow-on to the reflection exercises that you were speaking about earlier. So is there a role of using art or creative making as a process tool for developing expansive and innovative thinking? Is there a tool—yes, this is an audience question—is there a process or a tool for developing expansive, innovative thinking?

Oh, there are lots of them! There are lots of them! So a couple of resources I would look at is David Kidder, of the company Bionic, has written a great book. I think it’s called "New New," but it’s called “Debate,” and in that book he's got a series of exercises that he takes people through to reframe and open up their minds.

Alexander Osterwalder of Strategyzer has just massive numbers of tools that you can use. His book "Business Model Generation," I think is a really nice place to start in business, anyways. I think trying to think of business creativity.

I also think another great source is a company that I'm partnering with called Solve Next, and they have across a set of processes they call "Think Wrong." And I actually, I bring them into my classes at Columbia. It’s sort of the next generation of design thinking is what they do.

And what they argue is that when you’re on a predictable path, you can kind of continue to think the way that you’ve always thought. But if you really want to make a bold decision, if you want to make a bold path, you need to throw—what they call wrong thinking, which means not the conventional way of thinking.

So they have a website; it’s called Solve Next, and they have a whole series of drills that they take you through that conjure their principles of how you can do this. So, among the things they talk about are get out, you know, get out of the building to really observe, and then come back and sort of integrate what you’ve seen. That’s a really good design principle, you know?

Things like think about what resources you have to offer. So this whole series of steps they take people through. So there’s a wealth of resources out there for helping you kind of break that stranglehold that the past has on the way that you’ve always thought about things.

On a kind of a workshop level, an exercise I do, which I borrowed from the Solve Next guys, is called a brand takeover. And it goes like this: so here you are, you know, running your business and you’re making Oreo cookies or something.

Well, let’s say you got taken over by Nike, right? What would Nike do with your brand? What would they stop doing if Nike bought you? Right? What would they start doing? If they increased your advertising budget by tenfold, how would you spend the money?

And it’s so interesting to me that, like, once you’re given permission to sort of be somebody else, you look at your business in a completely different way. But as long as you’re sort of, I’m my Oreos and I’ve got to represent the brand and I’ve got a little at signs after my tweets, you're in that sort of corporate trap.

It’s very, very difficult to broaden out! That’s a really interesting point! And I asked, how would you advise business leaders at this point to be spending their time so they’re actually growing throughout it now? You've touched on a few—are there any other things that you think they might be doing?

I think resist the temptation to respond to every crisis real-time, you know? To every thing that feels important real-time. I mean, another great resource on leadership in this is my friend Tom Collett, who wrote a wonderful book called "In Extremis Leadership."

And Tom was the leadership dean at West Point, so he literally taught people who were in dangerous situations for real, you know? And he was the leadership guru there! A couple of observations he would make about people that lead in dangerous times, and he said something to me I thought was wonderful; those two things were wonderful!

And one of the things I’ve cited in the book is when times are good, people will put up with awful, terrible, incompetent, horrible leadership as long as everything’s fine. Nobody looks under the hood, right? But when things are really problematic, that’s when we start looking for competence!

So a couple of things he argues about what leaders need to do in these times. The first thing is not to do what seems like the natural thing, which is to get all excited, and you’re charging around, and you’re making decisions and making statements. He says, you know, what you want to do is dampen the emotional temperature. You want to get people calmed down!

Because if you’re in this kind of adrenaline-infused—you’re, you know, your glands are firing and you’re in fight-or-flight mode, it's very difficult to get people to make progress. You're kind of frozen in the headlights. So calm everybody down.

The second thing you want to do is give people a meaningful task that gets their mind off their own anxiety. So, you know, for now what I want you to do is take this pen and move it from here to there, right? And I give you further instructions when I know more, but for right now, that's the most important thing to be doing, and it gets people focused on, okay, that's my task, out of themselves so that they're not sitting there wallowing in ambiguity.

And a third thing he points out is you really want to have leaders who have built up a reservoir of trust where they've been trustworthy in their previous interactions. They've been at the same level with their people. They didn't count on a ball in the past.

And he makes a great point: this is the time to build up trust. It’s not when you need it! The time to build up trust is before you need it! And then the last thing he talks about is competence. Do you actually know what you're doing? Do you have the skills to lead us through?

And I think one of the mistakes that leaders make sometimes in these situations is pretending to know more than they do. None of us know now; let us know what tomorrow is going to be like, let alone, you know, six months or a year from now!

So I think it’s much wiser as a leader to say, look, here’s what I know! And be very authentic about this, here are my hypotheses about what the next step might be, but here’s my path to learn that! And so be much more willing to be open to the fact that I may not know.

And the final point on this I think is something Stanley McChrystal talks about a lot, which is he said, you know, if I'm making all the important decisions, there's something wrong with the system! Decisions should be made as close to the phenomenon as possible by the people that know as much as possible because they're right there!

And very few decisions should be making their way to me. Oh! Another appointment—my good friend Amira Ibarra wrote a great article which won a big prize last year called "The Leader’s Coach," and she said what leaders now need to do, because you've got to build these organizations that can respond to a challenge sort of from within, she says the leaders need to be more like coaches.

Instead of telling people what to do and evaluating their performance, they have to be asking questions, they have to be drawing people out and helping them develop themselves. And that doesn’t come naturally to everyone, so I think practicing those skills in this stressful time would be a really good money-in-the-bank kind of idea for whatever comes after.

So, individually, is this likely to impact where we live? Do you think that people will end up leaving the cities or spreading out from there?

Announcing the death of cities? You know, forever! So we can’t go through these waves, right? So in the 70s, right forward to New York, "Drop Dead!" Right? Nobody was leaving the city for the suburbs, and then during the 80s, the cities got hot again.

And would they come back to the city? In the sort of 70s and 80s, people moved, so it kind of comes in waves. I do think that a lot of research suggests that people being together in a density of places does contribute to innovation and to growth.

In that high-growth places, they tend to be denser places. Now, with this big shift with the social distancing, however long that goes, the question really arises: well, can we mimic some of the effects of being physically near each other with this kind of intermediary technology?

Are we going to start to see more of that where, you know, people will say, well, you know, I can have a much better life in a lower-cost place? I don’t have to live in San Francisco or Washington, and I can be as connected as I need to be to my creative colleagues by using technology!

It’s been predicted for a long, long time that that would happen. To date, it has not! You know, people tend to still cluster in places where they perceive opportunities to be. And we still send us any economies of density, you know?

But it's gonna be people are gonna take. But that's—I think there’ll be more kind of on the table. I wouldn’t be surprised, by the way, some of the smaller or more remote cities start to try to take advantage of that.

So to say, hey, why do you need to be putting yourself at risk in a dense place where you’re living on top of three other people? Come on out here! This place might…

So this is an interesting question to me. As a result of COVID-19, would you expect many large companies to realize they have expendable payroll in their businesses and begin reduction in force policies?

Yes, I do! Yeah, I do. Now, I don’t think I agree with it, but I do expect to see that. The reason I don’t agree with it is there’s a mountain of research that shows that if you were able to stave off the wave of kind of downsizing, offshoring, you know, whatever you go through with your workforce, that you will emerge from a recession in a much better place than if you sort of took a meat ax to your staff.

But, you know, unfortunately, there are a lot of companies that are still run with this kind of "fire the left-hand side of the building; workers are expendable" mindset. I don’t happen to think that's helpful for communities or for organizations, and in the long run, I don’t think it’s very profitable!

Unfortunately, this is back to this point about we need to really rethink the structure of incentives in capitalism. Here we've set it up so that managing for those short-term members can often be rewarded, and we’ve sort of legitimized that, which is very different from some other countries.

I mean, do you go to, say, Germany, where workers actually sit on boards of companies? They have actual decision-making power; you see an awful lot less of that.

So, this is another question from the audience. How do you see commerce change from country to country, and what do you think will change within governments and how they deal with businesses nationally and internationally?

I do think we're going to start to get a lot smarter about our global supply chains. The ones that we've built are very fragile. There was a very interesting piece in the paper the other day about why America, which is one of the richest countries in the world, can’t afford 70 percent face masks.

And it’s because all those masks have been, you know, they’re low-margin items so they’ve been offshored and nobody bothered to ask the question, well, what about if all those countries that we’ve offshored this production to suddenly decide they don’t want to sell these things? They want to keep them for themselves!

So I think you’re gonna start to see a revisiting of some of our assumptions about these really, really extensive global supply chains, and we may begin to see real localization.

So I think it’s going to be some combination of, you know, robotics, artificial intelligence, and so forth working in conjunction with people because if you think about operating a global, very fragmented, very distributed supply chain, it’s a pain in the neck, you know?

You have to keep track of currency fluctuations and customs regulations. I mean, there’s a lot of complexity to it that, you know, labor costs alone can’t cover!

The other big issue that I think we’ll start to realize is that innovation requires contact with the sort of point of production. And in the U.S. in particular, we’ve sort of said, oh well, we’ll let other people do the manufacturing and we’ll just do the innovation without realizing that those awesome needs are really tightly aligned!

So I think we’ll start to see different countries, you know, taking a much harder look at what are we going to do in terms of global trade versus what are we going to try to utilize or keep private?

With respect to governments, fascinating question, right? I mean, before this crisis we were seeing a lot of a move towards fragmentation in the global order. You know, that sort of post-World War II more or less stable relationship of countries to each other was starting to unravel a bit.

And, you know, it'll be interesting to see: does the crisis exacerbate that? So you’ve got, and you will have, huge numbers of angry citizens who feel that they were handed a very raw deal, and is it going to be a move toward, you know, toss the old regime out and we want radical change, which can go well and it can go really, really, really badly, as history has taught us?

You know, or is it going to be kind of wait a minute, let’s stick with what we do know. Let’s not throw everything out the window, and let's try to restore some sense of known order, and it’s hard to tell which way that could go at this point, right?

This is another question from the audience. We just have time for a few more. In the case of a recession, do you think this will bring down housing prices? Recently it's been quite unaffordable, so do you think it'll be brought back in line with the average salary?

Um, yes, I do! And I—I—but it comes back again to this allocation of resources in society because we’ve got plenty of housing in New York City. I forget what the number was, but of all the apartments that have been built in the last, something like ten years, there’s something like sixty percent of them that are sitting empty.

And the reason is that they’re all being built to the very top of the market, and that’s not where the demand is. So, you know, if we could have a combination of zoning rules and other changes, we make it profitable to build housing that was more affordable, we would see a lot more affordable housing.

But right now, it is as developers are heavily incentivized to sell just at the top of the market. Now that’s a change! Right? Back in the 50s, you had people like Donald Trump’s father building these middle-class developments that were meant to house people at an affordable price.

So I think the policy question is really what are we incentivizing? And right now, we’re just incentivizing the top of the market. We’re not really accenting the kind of construction everybody’s more pragmatically. Yes, I do think you will see housing prices come down!

I don’t know if you’ll see that in the really big population centers, but I do think you’ll see it as a broad trend. Now, that’s good and bad, right? A lot of people’s—the majority of their wealth is tied up in the price of their homes!

So that won’t be good news for a lot of them, but it could potentially make housing more reachable for people. So this is a question about nonprofits. Do you have any suggestions for nonprofit organizations with regard to messaging and outreach as we move out of the initial crisis into a period of constricted resources combined with increased demand?

Oh, that’s a tough one! And it’s tough! I mean, all those fancy fundraisers and, you know, things people really count on to supplement their annual budget, getting cancelled? That’s a huge blow!

I think it really comes back to let’s revisit the mission. Let’s be super clear about what we’re going to do and what we’re not going to do. And this would be a really good time to clear house! You know, I mean a lot of nonprofit—nonprofits, unfortunately, get tugged around by their donors and they get tugged around by the flavor of the moment.

And so getting really crisp about you, where are you going to participate and what exactly are you going to do? On what sort of off-the-chart strategy is one in terms of messaging? I think the message of, you know, we’re still here! We’re still here for you! We’re doing the best we can with limited resources!

And, you know, for those who do have the means, we could be a really good place for you to help your neighbors. You know, that kind of thing will help the cause that we’re working on! I think the more not-for-profits can demonstrate cooperative behavior—so let’s not all carve out fiefdoms and fight with each other over the resources.

Let’s demonstrate that we can actually work together for a more just society! You know, for our constituencies, I think that kind of behavior will be appreciated much more than, you know, there’s a hundred dollars worth of resources out there, and we want to get $99 of it!

You know, how do you look at that pot of donor money, right? What lessons are we learning in real-time that could serve us well as we face existential crises like this or other ones in the future?

I think we’re learning a lot about fragility versus resilience. We’re learning that we’ve built a number of systems that are really very fragile, and any little upset anywhere sort of puts them off kilter. So I think that’s one. We’re learning a lot about kindness and helping each other, you know?

I think these crises bring out the best and the worst of people, right? But you’re seeing kind acts of kindness everywhere, which is really very inspiring. I have to think it’s interesting that for the first time in a long time, you’re seeing most people have a common concern in society.

So now, especially in the U.S., it’s, you know, we’ve created an environment where many people don’t have common concerns, you know? So if I can buy my way to the best tickets at the ballgame and the first class on the airline and, you know, whatever else wealth and privilege will buy you, I'm not worried about, you know, whether somebody's got enough to eat or whether enough toilet paper or whatever!

And this disease has a very leveling common concern! I think we’re seeing now, you know, it doesn’t respect wealth, it doesn’t respect privilege! It can’t be bribed or bought off! It can’t even be bullied into submission, and I think that’s an interesting—I don’t know quite where it’s going to take us, but it’s an interesting new thing that we’re kind of dealing with right now!

So this is the last question. How can we rise above uncertainty and be more decisive in this moment and avoid wasting time?

I think back to this rapid experimentation because you don’t know the answer, so you're going to have to go discover the answer, and that’s where the decisiveness comes in. It’s, let's go find this out. It’s not let’s do this; it's let’s go find out what the right thing is to do! And I think that's the first step!

Well, thank you so much for your time. This has been wonderful! I really appreciate it. You're our second live stream ever; we’ll be doing more in the coming weeks and probably as an ongoing thing, but this has been marvelous!

Thank you! It’s such a pleasure to be your guest and looking forward to future conversations. Great! So for the audience, you can all exit Zoom at this point, and there will be a recording of it so you can look at it later as well or share it with others. Thank you for that! Thank you all!