The pandemic has blindsided much of the corporate world, and this will not be the last time that we see a "black swan,” or rare catastrophe, affect the economy, said Karl Moore, professor of strategy and organization at McGill University.
“We’re going to have to understand that the black swan is not an unusual an event as we thought,” Moore told Kitco News.
A health crisis is not the only event that could severely impact the business world; global warming, mass migration as a result of climate change, and the rise of China would be other agents of change, Moore noted.
“Pandemics will probably occur on a more regular basis, not yearly or anything like that, but it’s going to come along and you’re going to have to learn go lock down quicker,” he said.
Many large retailers have filed for bankruptcy this year, and Moore said that while COVID-19 presented a systemic shock to all sectors, many of the failed businesses lacked sound management foresight.
“As a family, we’ve moved much more online and that is reflective of Canadian and U.S. society. So it’s probably the poorly managed ones that got into deep trouble. They should have seen the move to online coming because it’s been happening for years,” he said. “David Bensadoun of Aldo comes to my class every year and every year we talked about the growth of online and how we have to evolve to be with it. If you’re a major retailer and you don’t know that, what cave are you living in is what I have to ask myself.”
One of the major changes that all businesses will have to adapt to is working from home. The challenge of maintaining a corporate culture while employees are working remotely is one of the core problems that CEOs will have to deal with now, Moore said.
Moore has researched personality traits of business leaders, and in particular, extroverts versus introverts.
“Actually, I think this is when the quieter, introverted, assured leader is a very good person to have,” Moore said, “we’re in deep trouble, I need someone that’s going to think it through, that’s going to be calm and not get overly excited.”
Another major change that happen at the management level is the different style of leadership that will come from millennial CEOs.
“In the past when I was young, it was more like [the managers] were in charge, we worked for them, and we followed their strategies reasonably blindly. In today’s world, [younger workers] are already challenging us, bringing things to the table that we don’t necessarily understand, and are reverse measuring us a big part of the time. So I think greater humility, greater learning, greater approach in strategy means that millennials and generation Z’s are going to manage and lead differently, rightly so,” Moore said.