COMMENT There is no doubt that the coronavirus pandemic has changed both business and people, but what could those changes mean for the future? What could changed management styles really mean for business? Join me as I journey to 2027 and ponder two potential alternatives.
By the spring of 2021, after the slow decline of the Covid-19 pandemic, two global real estate service firms – we’ll call them Red and Blue – dominated the industry. But over the course of the next five years Red and Blue were led and managed in totally different ways.
The triumph of the Reds
Matthew had led the most profitable part of the Red business for three years when in May 2021 he was asked to take over as chief executive. By this time most of the directors and staff still in the business were working more or less permanently from home and the firm had reduced in size. As the summer months drew closer, the fear of infection from Covid-19 dissipated and as Matthew believed strongly that team spirit was vital to success, he gradually got more of his people to come back to the office. First for two days then three days a week. A round of seminars and workshops helped renew their personal relationships and created a revised plan they could all support.
Along the way they were able to go back to the pub where they, men and women alike, joshed with one another like the old days and rapidly re-established their espirit de corps. Before long everyone wanted to come to the office four days a week (no-one had put in a full day on a Friday since about 2010).
Matthew of course had Reg, who had been a vital factor in leading staff and client entertaining for years. Red Reg dusted off his annual calendar of events, made some tweaks to reflect social distancing, and embarked on a new round of cycle rides, quiz evenings etc, which made work fun.
By the time the next recession hit in 2026, Red was in good shape and the tight-knit teamwork Matthew had engendered enabled the business to once again rapidly to develop a survival plan. A plan which was in stark contrast to the disarray at their principal competitor Blue, where senior breakaways were common and many newish staff reported never having really felt part of the business.
The dominance of Blue
Over at Blue, Rachel sat in her small garden on a sunny May afternoon in 2021 and pondered her surprise appointment as chief executive. Although normal life had largely resumed, commercial activity remained at a very low ebb. The firm had reduced in size and Rachel was determined that a recession like this one would never again cause such trauma.
She reflected on how successful homeworking had been. Technology enabled regular contact between all her people and as there was far less “office distraction” tasks could be completed much more efficiently. Not having to commute saved two hours a day, there was more time for exercise and she and her partner could share domestic chores and childcare. Zoom meetings had at first seemed stiff but people gradually relaxed on them, and the informality that breeds a more creative environment had gradually re-emerged.
Rachel of course also had Reg, who had played such a part in staff and client events over the years. Blue Reg quickly saw that technology enabled different methods of creating social glue online which kept everybody feeling part of the same team and new members were rapidly engaged.
Rachel and Reg also realised that younger millennials and Gen Zs were far less interested in boozy sessions and when everyone did get together it was for an outdoor barbeque or a charity walk or bike ride, so that the social distancing rules could be observed.
By the time the bust of 2026 came along Rachel’s flexible operation, with its low cost base, was able to cope with the rapidly shrunken revenue far more easily than Red; which with its fancy offices and lower productivity looked as though it was about to implode.
Two very different, but very real alternative management styles. Which corner to you stand in? Red or Blue? Steering a middle course could be even more difficult.
Alan Froggatt is principal at Touchstone Advisers
