Experience from Pandemic Paves the Way for New Normal
by Elliot Koh, Aditi Menon, and Elizabeth Lande
When COVID-19 went international last spring, the steel industry reacted in the best way it could: By halting one-third of its production. Compounding the issue, social-
distancing and lockdown orders led to yet further plant closures . However, when consumers found themselves stuck at home, their purchasing increased, particularly on
new home appliances and machinery increasing demand for steel, a commodity that
was suddenly scarce. In response to the spiking demand, steelmakers rushed to meet
their former levels, then surpassed them. Steel prices rose dramatically, and many
firms struggled to adapt.
This story is familiar, in one form another, for nearly all companies over the past year. Lumber prices rose 112 percent for much the same reason that steel did, and grain became more expensive due to fewer workers as well as poor growing conditions. In essence, the COVID-19 pandemic forced all industries to adjust their business models to avoid being left behind. The situation is no different for consulting firms.
Previously an industry that sent teams to client sites every week, consultancies have been forced to scramble to reinvent their approach. The University of Washington Consulting
Association grappled with this situation during a project for Seaport Steel, a steel company that serves as an intermediary between steel mills and consumers.
Seaport Steel is a steel intermediary; their costs, sales, and profits are heavily dependent on the current price of steel. In 2020 steel prices rose significantly compared to prices during 2019, when they had been on a marginal decline. If the trend of falling steel prices from 2019 had continued, their costs would have declined in 2020, resulting in lower material costs and, other things being equal, higher profits.
However, as the pandemic altered the market in 2020, and because the pandemic is projected to continue into at least the summer of this year, the UWCA team had to make their recommendation based on last year’s pandemic-shocked prices. Proposals about profits were thus based on rising steel prices. This decision wasn’t as straightforward as it sounds, though. The team analyzed how to improve profits by determining what characteristics of a steel order made it more profitable during the pandemic, though a change in the global markets would change the characteristics of profitable order and thus potentially invalidate the team’s analysis and final conclusions.
The engagement was further affected due to social distancing restrictions. Just as firms the world over have ceased client meetings, the UWCA team was unable to visit Seaport Steel’s facility. Being on site would have provided a more visual way of understanding how an intermediary steel company works, as most of the team was unfamiliar with the steel industry before the engagement. Learning how a company operates – and, in this case, how Seaport Steel processes its steel – is a huge part of any project. Increasingly, UWCA consultants are having to learn how to build relationships and tacit knowledge virtually, rather than by spending time “in the trenches” with clients.
Still, the team was able to work against the challenges thanks to a virtual workspace, and productivity increased. Despite the team being dispersed across the West Coast, a remote format allowed members to frequently meet with the client and as a team, reducing the strain of commuting and the difficulties of finding meeting spaces. Cutting down on the commute ensured that more time was spent on productive work, and the conclusion to the engagement proved successful for both parties.
THE WORLD AT LARGE
According to US News, 70 percent of U.S. workers worked remotely last April. As the pandemic continues, employees have predominately continued to work from home. The
change from largely office-based work has
proved challenging for some businesses and
revolutionary for others. Research conducted by
multiple independent outlets and major firms alike
shine light on two key areas of the business world:
productivity and collaborative work.
Perhaps the most obvious shift of the
pandemic is the reality of working from home.
Students are not immune to this either, and the
phrase “Zoom University” has entered the popular
lexicon. With a majority of workers’ and students’ time spent at home, the surveys and studies certainly had a large enough pool to draw from. Based on their findings, several conclusions, albeit vague ones, can be drawn.
The first deals with remote productivity: Are we really working more productively while working from home? In short, the answers vary. Two surveys conducted by PwC, one in June and one in December, showed that an averaged 48 percent of employers believed they were being more productive. An average of 31 percent of employees said the same thing.
A survey by Boston Consulting Group went a level deeper and surveyed its employees with a more specific set of questions. Seventy-six percent of remote employees reported productivity increases on individual tasks, 60 percent of remote employees reported increases on managerial tasks, and 44 percent of remote employees reported that they had been as productive on collaborative tasks. The average is higher than either report from PwC, but the key area of note is the collaborative aspect. Less than half of the employees surveyed felt collaboratively productive from home.
It is nearly impossible to truly quantify “productivity,” nor is there a single factor behind these statistics. This makes a catch-all solution or explanation almost impossible to reach. Some data seems to conflict, too: Despite apparent lowered collaboration, working remotely is, as shown in the discussion of the UWCA project with Seaport, incredibly convenient, and thus workers have expressed a desire to continue working remotely.
In the same PwC survey, 29 percent of employees wanted to work remotely five days a week, and over half wanted to work remotely for at least three days. The lowest percentage category, a mere eight percent, did not wish to work remotely at all.
Still, there is the important aspect of human interaction to consider. A July report from the National Bureau of Economic Research reported that the average workday lengthened by 48.5 minutes. As the boundaries between workspace and home blur,
employees in a variety of fields have experienced higher
rates of burnout, mental drainage, and isolation. It should
then come as no surprise that companies have mixed
plans for the post-pandemic workspace.
A PERSONAL LEVEL
Increased productivity has been particularly evident in the tech sector. To understand on a more personal level how working in a fully remote setting has affected
teams within the heavy tech space,
UWCA interviewed two managers
based in Silicon Valley to talk about their past experiences. Sanjay Kumar, an Engineering
Manager at Apple in San Francisco, has been in the industry for over a decade and has experience in managing teams, writing code, and communicating and
collaborating in the programming space. He believes that the productivity of his team and other people he has worked with during the pandemic has increased
because everyone is working remotely. By being at home, many unnecessary components of working in person have been eliminated, such as commuting to
offices and spontaneous workplace distractions.
With Bay Area traffic becoming increasingly congested, traveling to work can take anywhere from 15 minutes to two hours, depending on where people live. The lack of a daily commute saves an average of 30 minutes per day which can then reallocated for more productive uses: Finishing a project, having a team meeting, or spending more time with family.
An interesting, and even amusing, facet of working in person is that people no longer waste as much time on midday errand trips. Instead, they can shop online in a more convenient fashion.
“Because there are less office distractions like co-workers coming by your desk and chatting, execution of planned projects is happening very efficiently,” Sanjay said. He went on to say that once the pandemic is over, he believes the business world should transition to a mostly remote model.
He’s not alone, either. The PwC survey showed that just over 70 percent of US executives plan to invest in tools for virtual collaboration and “IT infrastructure to secure virtual connectivity.” Sixty-four percent say they will be training managers to work with a greater number of remote employees.
Pradeep Rajan, an IT Manager at network technology company at VIAVI Solutions and a former employee at Cisco, offered a different viewpoint on the situation. While he did agree that productivity has increased in the past year, he believed it was happened for a different reason.
“People were scared of losing their jobs because of the pandemic, so they were working extra diligently to make sure they weren’t among the ones that were laid off,” Rajan said.
He argues that this fear was the prime motivator of increased productivity. Now that time has passed, and concerns have eased for those still working, productivity is slowly going back down to their pre-pandemic levels. As people have adjusted to working remotely and gotten comfortable working online, people are less likely to be “on” all day. Employees seem to have reacted to the negative side effects observed in the National Bureau of Economic Research survey and constructed better boundaries to separate work and home lives.
For Rajan, to successfully work in a smaller tech company, being in person has more advantages than disadvantages. Much like the 56 percent of workers surveyed by BCG who didn’t report better collaboration productivity, he misses the strategy and design sessions that he conducted regularly with his team using conference rooms and whiteboards. White-boarding sessions are harder to conduct online, and the online tools designed for such planning sessions are limited. Even after a full year of remote work, operating technology in a collaborative manner often proves challenging.
Another positive of working in person is the ease of onboarding for new hires. "There is a new guy in my office, and he is finding it really difficult, the transition,” Rajan said. For many new employees, the lack of easy access to a manager’s or director’s office has made the transition more difficult than usual. Even the support and mentorship gained from chatting in a coffee line is gone.
WHAT TO EXPECT
It’s the reasons cited by Rajan that make total remote work an unlikely possibility for the business world. Executives are ready to return to offices in some form or another by this summer. But, thanks to some degrees of increased productivity and general employee satisfaction, the previous world of the five-day-a-week commute is almost
certainly on the chopping block. The size of the cut remains to be seen and will be influenced by several factors.
Employee input can be expected to play a large role, but so can the size of the company. VIAVI Solutions is a smaller company compared to Apple, and the different dynamics form a different mindset for their employees. A smaller company lacks the infrastructure to be as effective in the long-term in a remote environment while a multinational corporation can better support its employees online.
Perhaps the best takeaway is the most obvious one: the hybrid model is coming.
HYBRID AT HOME
The transition to a new normal is not limited to the professional world. UWCA is keenly aware of what a return to in-person enterprises brings with it, on both sides of the spectrum. Just as major companies have determined the benefits of remote and office models, UWCA has done so for its own operations. Key among these is the new ease with which engagements can be conducted.
This begs the question: What kind of in-person interaction with client is most valuable? As to be expected, the beginning stages of any project are critical. The visit builds trust and a professional relationship that respect’s each side’s time and talent. Visiting the client site also gives an understanding of the company in ways not easily replicated on screens. In accordance, UWCA hopes to return to in-person client visits for the beginning of projects when health regulations allow for it, just as the Seaport Steel engagement team wanted to do.
Ideally, the final recommendation meeting will be in person as well. Closing projects with a strong solution as well as appreciation for each side’s involvement is critical to success on a business and personal level.
In between the initial visit and the closing recommendation, in-person visits will be infrequent, but virtual interactions will occur regularly. The past two quarters of successful engagements have proven that weekly client meetings are just as effective remotely. Less time is lost to travel, and the communication process flows smoothly. For UWCA, this walks the hybrid line and is a “best of both worlds” situation: Strong relationships and efficient use of time that deliver the desired outcome for the team and the client.