Excerpts of the Talk: ‘Future of Work, Jobs and Careers after COVID-19,’ Talk by Mr. Sanjiv Mehta, Chairman & MD, Hindustan Unilever, Moderated by Mr. Ronnie Screwvala, first-generation Indian entrepreneur and philanthropist
Dated: April 8, 2020
This is a summary of a very insightful recent talk on how markets could change after the COVID 19 crisis is over and what impact it may have on the jobs and how the work gets done. It is a talk delivered by Mr. Sanjiv Mehta, Chairman, and MD of Hindustan Unilever. The whole session was very professionally moderated by Mr. Ronnie Screwvala, first-generation Indian entrepreneur and philanthropist.
Mr. Mehta started by saying that the market predictions should only be treated as predictions, as the reality will be shaped by many other factors. The meltdown of global financial markets is indicative that the economies are headed towards recession. While the threat of recession is real, financial markets cannot be the only indicator of the upcoming recession. The market situation post-COVID 19 will depend on many factors, such as how successfully India can contain the spread of the virus.
India is a large domestic economy whose dependence on export is not very high. But the Indian economy was performing poorly even before the COVID 19 crisis. The Indian government has done a great job in restricting the spread of the virus with the lockdown. It now needs to focus on both lives and livelihood. The government needs to show the same resolve and decisiveness from ensuring that the economy does not stall.
Broken credit lines could lead to a liquidity crisis, widespread bankruptcies, and significant job losses. Mr.Mehta pointed out that the recovery of the markets also depends on many factors, such as the degree to which the demand is delayed versus the degree to which the demand is lost.
The Economists predict recession cycles often in three forms, viz., V-shaped, U-shaped, or L shaped. In a V-shaped recession, the economy suffers a sharp downturn, followed by a strong recovery. In a U-shaped recession, the shock persists, there is some permanent damage from an output perspective, but the economy bounces back slowly. The L-shaped recession is ugly, and there is significant structural damage to the economy, causing issues in the supply side, labour markets, capital formation, and productivity function. The recovery from the L-shaped recession takes many years. While the V-shaped recession is plausible, the country needs to prepare for L-shaped recession as a worst case scenario.
Mr. Mehta also suggested how the impact of COVID 19 crisis could manifest itself. It could knock the consumer confidence due to the shocks in financial markets. Household incomes could contract. Households could then start saving and spending less.
There could be a direct drop-in consumer confidence. Since financial markets and consumer confidence are strongly correlated, with a downturn in financial markets, consumer confidence can drop sharply. The drop in consumer confidence could have a severe adverse impact on consumer spending.
On the other hand, there could also be a supply-side shock. In all the previous recessions, there had been issues with the big financial institutions. The government supported these institutions, and the market started to recover gradually. However, in the current scenario, there could be challenges both on supply side and the demand side. This gap could widen considerably, creating problems in the economy.
In Mr. Mehta’s opinion, the global economy after COVID 19 will be different in a number of ways both microeconomic and macroeconomic
On the microeconomic level, the crisis has already spurred the adoption of technology and new business models. E-learning, digital monitoring of healthcare, work-from-home, and many more innovations will be the next big things. At the macroeconomic level, even before COVID-19, the world was moving away from globalization. It remains to be seen if this crisis could increase the forces behind anti-globalization. The COVID-19 crisis could also impact political outcomes, such as the US elections. Depending on our current world leaders, the crisis could increase the cooperation between the countries or at the other extreme, could increase unilateralism.
To all the business owners, Mr. Mehta suggested:
1. Don’t be too dependent on the predictions
2. Don’t let turbulence in financial markets cloud your judgment
3. Focus on consumer confidence signals
4. Study your consumer data and calibrate insights
5. The impact is going to be different across countries, and across business segments. Start thinking about how you will address the post-crisis world, keeping your specific realities in perspective.
Mr. Mehta also highlighted the essential qualities that a leader needs to display during this crisis:
1. Keep calm
2. Retain confidence
3. Relentlessly communicate with your people
4. Collaborate with your partners
5. Reach out to the community
6. Be compassionate
7. Most importantly, focus on cash. Liquidity and cash will determine who will survive this crisis
Speaking on the future of work, Mr. Mehta pointed out that technology has enabled us to work successfully from remote locations. Despite the current lockdown of the country, the supply chains of Hindustan Unilever are functioning. Hindustan Unilever has also successfully consummated a Rs. 3,045 crores (Euro 375.6 million) merger with GlaxoSmithKline Consumer Healthcare division.
The adoption of technology at work has accelerated. AI (Artificial Intelligence), ML (Machine Learning), Cloud Computing, Blockchain Technologies, etc., have redefined the man-machine relationship. There will be tremendous implications of the entry of digital natives into the workplace. A study from McKinsey shows that 60-65 million jobs could be created in the next few years due to the surge in productivity. At the same time, it will be critical to redeploy 40-45 million workers whose jobs may be displaced or modified due to technology. Specialists, insight-driven, and multi-disciplinary roles will replace many routine jobs. Skills like creativity, empathy, and collaboration will be essential for success in the new world that is unfolding before us. Roles like Data Scientists, and System Designers, will be in demand.
Not only are the jobs going to change, but the way the work is done will also change. The work will have more interdependence, collaboration, agility, and flexibility. Vectors on which teams will evolve will be remote, and gig-oriented, i.e., incredibly agile and flexible, real-time performance-driven (combination of permanent employees, temporary hires, freelancers, machine-assisted people, etc., coming together to complete a task). Agile and organic (teams will evolve depending on the stage of the work), will be the new norms for organisational working. Members will be able to nominate themselves to work on projects based on their passion.
Addressing how one should plan their career in times of crisis, Mr. Mehta suggested:
1. Take charge of your career
2. Career is not solely about vertical progression. One should work to gain diverse experience and learn new skills
3. It will be important to learn, unlearn, and relearn all the time
4. Expertise, domain skills, leadership, intuition-based decision making, ambition, and humility are timeless skills, and one should keep them in sight always
Mr. Mehta also answered several questions that were moderated by Mr. Ronnie Screwvala. His talk and answers to the very pointed questions were indeed very positive and gave the audience a lot of hope of what the future holds for all of us.
You can view the complete talk on YouTube: https://www.youtube.com/watch?v=RUKyUK50TPY
Summarized by Astha Sharma (Senior Manager: ISB-CBM)