In March, as the pandemic rolled in and began to uproot our daily lives, I made a prediction.
Predicting a 50% increase in remote work in the early days of the COVID-19 pandemic felt radical. Yet today, the question itself feels fundamentally outdated. There are no longer “in-office” or remote employees. There are simply employees, many of whose job flexibility allow them to work remotely.
With the benefit of months of sitting in a home office, cloistered from human contact, here’s three new predictions on how business life will forever change.
Oil and Gas Continues Commoditization
The oil and gas industry has enjoyed a remarkable run of profitability. As recently as 2013, Exxon Mobil was the most valuable company in the world, eventually reaching a market capitalization of $446 million. Today it is worth less than 1/2 of that. Exploration of international fields and the subsequent massive development efforts don’t make the same economic sense as it did a decade ago. Fracking bolstered North American supply tremendously. And while Exxon didn’t help itself by being late to the fracking game, its struggles are emblematic of the industry as a whole.
COVID-19 crushed the demand curve and drove oil and gas operators to further reduce operating costs to remain profitable, and even solvent. Meanwhile, renewables continue to make up a large and large share of energy production. As of this writing, the amount of solar power has increased 43 times since 2010. Renewables now make up 30 exajoules or over 5% of the worldwide demand. COVID-19’s glut of energy has forced suppliers to be more creative and deploy capital in atypical ways.
The crunched demand curve will bounce back, but trends do not point to a full restoration. Do you see the same amount of workers fighting traffic every day in late 2021 as they did in late 2019? Doubtful. The noted clean-up guru, Kon Mari has a litmus test for whether something should be preserved. “Does it bring you joy?” If the answer is no, then dispose of the item. The Kon-Mari Business version would be “Does this event maximize utility?” Many business travelers will say no to non-essential travel, both now and into the future. It’s easy to see a future where oil and gas fades from its pole position as the King of Energy into a subdued and supplemental role.
Classic Institutional Holds Weaken
The deconstruction of classic institutional behaviors has exposed their weakened ability to deal with a modern world. Sure, universities went virtual, but at some point paying $200,000 for online classes does feel like the best economic investment when a true expert from Udemy.com is hawking the same wares for $25.
A great example of this education shift from university education to less formal sources is seen anecdotally via the 1997 Good Willing Hunting film. Matt Damon’s character flexes his self-taught knowledge on his “unoriginal” Harvard educated nemesis. When his nemesis paints a bleak picture of Damon’s future due to his lack of a degree, Damon responds, “Maybe so, but at least I won’t be unoriginal.” The idea of these power dynamics playing out today is laughable. Damon’s character likely responds “Well, I’ll be retired at 35 after I sell my software company for a billion or so.”
Attending college was drilled into a generating of high-performing academic kids for generations and while it still feels like the best possible choice for many, cracks in the formal education’s pricey armor have been illuminated by COVID-19. We are paying how much for Ethan’s education and he’s doing it virtually?
The polisher of formal education’s mantle has long been the corporation and today’s corporations are making intentional moves away from the throne of formal post-graduation education. Google and Apple opened their tech jobs to non-degree holders and many startups have followed suit.
Social Fragmentation Reverses its Sharp Increase
A quick look at current events shows the degree of fragmentation that developed since COVID-19 hit. Technology’s self-constrained ecosystems allow a person to never leave their house for food, work, or exercise. An unfortunate by-product of this insular way of life has been fragmentation as human nature is to double down on social media and news echo chambers.
Isolation is a well-known defense mechanism during stressful events. It is hard-wired into our biology. An injured fox returns to the den to lick his wounds. As a highly contagious pandemic rages, returning to the den is the best possible solution.
Yet, humans thrive on interaction with others. The richness of face to face interactions cannot be duplicated via technology. Escalating rules of engagement exist, depending on the demands of information to be exchanged. Each rung provides greater context.
- Phone call
- Video call
- Face to face
Today these options are more carefully considered than ever before. COVID-19 helped to drive digitalization three of four years ahead in a matter of a few months. “Old-school” executives around the globe had to learn how to met digitally.. Yet face to face interaction remains a crucial pillar in trust and rapport building. We’ll see office parties, team meetings, and less social fragmentation once again. Humans long to interact with others, to build great products, and great cultures together.