2020 will be remembered for generations to come as the most disruptive year in modern history. The COVID-19 pandemic has exposed how underprepared our global systems are for dealing with massive and urgent disruption, and how interconnected the nature of our society and world truly are. These realizations highlight the importance of rebuilding from the crisis with more resilient, equitable, and sustainable societies and economies.
Energy and sustainability have also been impacted as leaders have seen their goals, plans, and resources temporarily derailed or in need of recalibration. Because disruption is certain to be part of the new normal, we’ve identified three key lessons energy and sustainability professionals can take away from the crisis to inform their recovery efforts.
A preventive mindset is imperative
We’ve seen that a global crisis has the power to undermine hundreds of years of effort to erect modern agricultural, medical, transport, energy, and societal infrastructure and systems. We can anticipate future crises will have a similar impact, especially those tied to climate change. Whether it is another health crisis or some form of societal collapse, future disruption is likely inevitable as 9 of the 15 global climate tipping points that regulate the planet have already been activated.
Despite these circumstances, leading organizations find themselves uniquely positioned to become heroes of disruption by adopting a preventive mindset. Some have called the COVID-19 crisis the “trial” for future climate crises; the steps that companies take in the coming months have the power to transform the long-term health and resilience of their business.
Now is a time to consider adopting practices that improve longevity. The need to change business practices has never been so critical, and the solutions to do so are at our fingertips. For example, by addressing energy efficiency, data collection and management, and carbon reduction in the supply chain, companies can realize significant environmental impact while improving the reliability of the goods and services needed for sustained growth.
Many companies have been forced to adapt to working-from-home. This, too, has long-term potential as a means to increase the productivity and efficiency of workers while simultaneously eliminating transport emissions. Companies that use this crisis experience to consider other digital solutions, or to evolve their workforce, may realize short-term benefits, but also prepare themselves for future disruption.
Even with the current headwinds, we see increased sustainability resolve from our clients, and believe that crisis can facilitate change. Many of them are using this time as an opportunity to make genuine, thoughtful, and long-term investments in their business for future preparedness. Take, for example, our client Faurecia, who committed to a partnership with Schneider Electric to pursue its carbon neutrality goals in the midst of the pandemic.
Purpose is more important than ever
Business leaders face increasing complexity. Executives must tackle more problems than their predecessors and are challenged by a wide variety of threats to their businesses. For many, the answer is purpose, which guides the way when things are at their most difficult. It comes as no surprise, then, that sustainable indices performed significantly better during the pandemic than their peers. And those companies with a commitment to their employees, customers, communities, suppliers, investors, and the planet have sought creative means to innovate during the crisis, turning challenge into opportunity and positioning themselves for post-pandemic growth.
The next vanguard will be companies that place purpose-driven strategies like circularity at their core. The pandemic has demonstrated how vulnerable single-revenue stream businesses are, and how fragile a goods-based economy can be. The persistent approach of growth without limits in a world of finite resources will be difficult to sustain, and a risk in a future exposed to greater disruption. Our present economic and social circumstances provide businesses with an opportunity to authentically reinvent themselves. Businesses that do not run the risk of remaining unprepared for disruption in the future.
Flexibility and resilience are the new names of the game
The new normal, for many, is still uncertainty and disruption, and the lessons we learn today could end up obsolete during the crisis of tomorrow. The key is plasticity—the ability to move with and mold with disruption rather than remaining rigid and potentially being broken by it. Even companies with diverse portfolios—like Disney, for example, one of the most profitable global corporations in 2019, now facing a 2020 loss of USD$1B—will be challenged to reimagine systems and assumptions previously taken for granted.
Digitization and advanced technologies like machine learning, paired with human intelligence and ingenuity, are more critical than ever to enable flexibility and resilience. Organizations who embraced digitization before and during the pandemic were able to more quickly mobilize a remote workforce and maintain a competitive advantage. Twitter, for example, was one of the first companies to pivot to a work from home model at the beginning of the pandemic. Having proven that it can work, the company says it will now support employees who wants to continue to do so. Others who faced the challenge of falling sales rapidly pivoted in unexpected ways to meet new demand: restaurants became grocers, cosmetic manufactures began producing hand sanitizer, and apparel manufacturers made masks. In many cases, businesses pivoted not only because they knew their product or service was no longer in demand, but because it was the right thing to do.
In recovery, savvy businesses will consider how to build flexible, digital strategies into their operations to buffer them against the impacts of future disruption. Take microgrids as an example: not only can these solutions help companies achieve carbon and efficiency goals, they can also be “islanded” from the grid, essential during a grid-disrupting event or in a wildly volatile electricity market.
The “New” Normal: Build Back Better
Our world may never go back to “business as usual.” For organizations, this presents an opportunity for (potentially) radical transformation. The lessons taught to us by the COVID-19 pandemic can be applied to building back differently—and better.
Radical transformation is possible, and a crisis is a moment to embrace the challenge. Consider the case of IBM, who reinvented itself from a products company to a services company, defying expectations and building a resilient business as a result.
Changing times can imperil even the most successful companies, who, in a crisis need to look at their entire portfolios, rationally and candidly…they can find their way back if they are willing to reinvent themselves in ways that will make them viable and relevant…but you must understand that transformation is a constant and continuous process…and you must embrace the notion that when faced with tough times your goal must not be merely to survive but to succeed, and success comes through leadership.
–Bridget van Kralingen, IBM
We’ve seen that change can happen faster than expected, and its impacts should not be underestimated. The discomfort we feel today is preparing us for an accelerated future. The potential for radical change is there if we simply let go of old ways and propel our businesses with purpose into the new normal.
This is not the first disruption of magnitude that organizations have faced, and it certainly won’t be the last. We invite you to access and share our full Accelerate Recovery toolkit for more inspiration and practical tips for building back better.