The path to the next normal - McKinsey & Company

1 May 2020 The path to the next normal Leading with resolve through the coronavirus pandemicCover image: Cultura RF/Getty ImagesCopyright 2020 McKinsey & Company . All rights reserved. This publication is not intended to be used as the basis for trading in the shares of any Company or for undertaking any other complex or significant financial transaction without consulting appropriate professional part of this publication may be copied or redistributed in any form without the prior written consent of McKinsey & 2020 The path to the next normal Leading with resolve through the coronavirus pandemicOn March 11, 2020, the World Health Organization formally declared COVID-19 a pandemic, underscoring the precipitous global uncertainty that had plunged lives and livelihoods into a still-unfolding two months later, daily reports of outbreaks and of waxing and waning infection and mortality rates continue to heighten anxiety, stir grief.

2 And cast into question the contours of our collective social and economic future. Never in modern history have countries had to ask citizens around the world to stay home, curb travel, and maintain physical distance to preserve the health of families, colleagues, neighbors, and friends. And never have we seen job loss spike so fast, nor the threat of economic distress loom so this unprecedented reality, we are also witnessing the beginnings of a dramatic restructuring of the social and economic order the emergence of a new era that we view as the next normal . Dialogue and debate have only just begun on the shape this next normal will take. But since the onset of the pandemic, McKinsey has published a rapidly growing collection of insights (at least 250, at this two-month mark) on the impact of COVID-19 on the economy, the workforce, and the gamut of functions and industries, both globally and in specific regions across the world.

3 We have collected and curated the first 100 of these articles into four compendiums, organized by the initial stages of the path we see as leading from the current crisis to the post-pandemic era the next normal that will materialize after the battle against coronavirus has been initial stages are Resolve, Resilience, and Return; as we progress, they will be followed by Reimagination and this first compendium, The path to the next normal , we curate a selection of articles related to the initial stage, Resolve: how to confront the crisis, lead with purpose, and determine the scale and pace of action necessary to navigate toward greater resilience. We set forth strategies for keeping businesses and other institutions running organizing a nerve center, for example, and enabling communities to work, and learn, remotely.

4 And we offer examples to mobilize leaders across boards and the C-suite. At the time of this publication, the course of the pandemic remains unclear, and safeguarding both lives and livelihoods remains an exigent priority. We hope these insights begin to illuminate the path toward a future still in flux and inspire leaders with the necessary resolve to help forge the next can download this and three other compendiums at , as well as find these and our entire collection of individual insights at look forward to your feedback at NarisettiGlobal Publishing Director ElectMcKinsey Publishing2 ContentsCharting a purposeful path to the next normal Beyond coronavirus: The path to the next normal Demonstrating corporate purpose in the time of coronavirus6 11 Organizing the response Responding to coronavirus: The minimum viable nerve centerGetting ahead of the next stage of the coronavirus crisisTo weather a crisis, build a network of teams58 66 77 Mobilizing the C-suite Boards in the time of coronavirusThe CFO s role in helping companies navigate the coronavirus crisisWhen investors call: How your business should talk about coronavirusThe CIO s moment: Leadership through the first wave of the coronavirus crisisDriving digital change during a crisis: The chief digital officer and COVID-19 How chief data officers can navigate the COVID-19 response and beyondLeading with purpose: How marketing and sales leaders can shape the next normal140146 152 156 162 168 174 Leading with resolve Leadership in a crisis: Responding to the coronavirus outbreak and future challengesA leader s guide.

5 Communicating with teams, stakeholders, and communities during COVID-19 Decision making in uncertain timesApplying past leadership lessons to the coronavirus pandemicPositive leadership in uncertain timesRe-energizing through the epidemic: Stories from China18 24 32 38 44 47 Working remotely Revisiting agile teams after an abrupt shift to remote When governments go remoteAdapting workplace learning in the time of coronavirusA blueprint for remote working: Lesson from China86 9498 104 Experimenting with remote education at scale Coronavirus and the campus: How can US higher education organize to respond?Coronavirus: How should US higher education plan for an uncertain future?Getting the next phase of remote learning right in higher educationSchool system priorities in the age of coronavirus114 120 126 1313 Charting a purposeful path to the next normal6 Beyond coronavirus: The path to the next normal11 Demonstrating corporate purpose in the time of the coronavirus45 Beyond coronavirus: The path to the next normalThe coronavirus is not only a health crisis of immense proportion it s also an imminent restructuring of the global economic order.

6 Here s how leaders can begin navigating to what s next. Baona/Getty Imagesby Kevin Sneader and Shubham Singhal6 The path to the next normal May 2020 For some organizations, near-term survival is the only agenda item. Others are peering through the fog of uncertainty, thinking about how to position themselves once the crisis has passed and things return to normal . The question is, What will normal look like? While no one can say how long the crisis will last, what we find on the other side will not look like the normal of recent years. These words were written 11 years ago, amid the last global financial crisis, by one of our former managing partners, Ian Davis. They ring true today but if anything, understate the reality the world is currently is increasingly clear our era will be defined by a fundamental schism: the period before COVID-19 and the new normal that will emerge in the post-viral era: the next normal .

7 In this unprecedented new reality, we will witness a dramatic restructuring of the economic and social order in which business and society have traditionally operated. And in the near future, we will see the beginning of discussion and debate about what the next normal could entail and how sharply its contours will diverge from those that previously shaped our , we attempt to answer the question being posed by leaders across the public, private, and social sectors: What will it take to navigate this crisis, now that our traditional metrics and assumptions have been rendered irrelevant? More simply put, it s our turn to answer a question that many of us once asked of our grandparents: What did you do during the war?Our answer is a call to act across five stages, leading from the crisis of today to the next normal that will emerge after the battle against coronavirus has been won: Resolve, Resilience, Return, Reimagination, and duration of each stage will vary based on geographic and industry context, and institutions may find themselves operating in more than one stage simultaneously.

8 Today, on , a group of colleagues published Safeguarding our lives and our livelihoods: The imperative of our time, which emphasizes the urgency of solving now for the virus and the economy, and thereby precedes our focus here on reimagining the future, , these five stages represent the imperative of our time: the battle against COVID-19 is one that leaders today must win if we are to find an economically and socially viable path to the next almost all countries, crisis-response efforts are in full motion. A large array of public-health interventions has been deployed. Healthcare systems are explicitly on a war footing to increase their capacity of beds, supplies, and trained workers. Efforts are under way to alleviate shortages of much-needed medical supplies. Business-continuity and employee-safety plans have been escalated, with remote work established as the default operating mode.

9 Many are dealing with acute slowdowns in their The shock to our livelihoods from the economic impact of virus-suppression efforts could be the biggest in nearly a c ent u r coronavirus: The path to the next normal7operations, while some seek to accelerate to meet demand in critical areas spanning food, household supplies, and paper goods. Educational institutions are moving online to provide ongoing learning opportunities as physical classrooms shut down. This is the stage on which leaders are currently focused. For more, please see Coronavirus: Leading through the crisis on yet, a toxic combination of inaction and paralysis remains, stymying choices that must be made: lockdown or not; isolation or quarantine; shut down the factory now or wait for an order from above. That is why we have called this first stage Resolve: the need to determine the scale, pace, and depth of action required at the state and business levels.

10 As one CEO told us: I know what to do. I just need to decide whether those who need to act share my resolve to do so. ResilienceThe pandemic has metastasized into a burgeoning crisis for the economy and financial system. The acute pullback in economic activity, necessary to protect public health, is simultaneously jeopardizing the economic well-being of citizens and institutions. The rapid succession of liquidity and solvency challenges hitting multiple industries is proving resistant to the efforts of central banks and governments to keep the financial system functioning. A health crisis is turning into a financial crisis as uncertainty about the size, duration, and shape of the decline in GDP and employment undermines what remains of business McKinsey Global Institute analysis, based on multiple sources, indicates that the shock to our livelihoods from the economic impact of virus-suppression efforts could be the biggest in nearly a century.