McKinsey & Co. says organizations should adopt a new operating model and an all-in approach to transformation as they emerge from the COVID-19 pandemic. In a recent article, the consulting firm advises businesses to assess their full potential, set high aspirations, and deliberately sequence the moves to get there.
"Incrementalism is especially risky, particularly for organizations trying to break out of what feels like a COVID-19 perpetual crisis," the firm says in "This Way Out: How Leading Companies Chart a Full-potential COVID-Exit." "Our findings from past downturns confirm, as well, that companies that take an all-in approach emerge stronger and sustain that competitive advantage for almost a decade afterward."
In a separate article, McKinsey also advises that the strongest organizations are reinventing themselves with "swift, nimble, and versatile" operating models, which are most effective amid uncertainty. "How COVID-19 Is Redefining the Next-normal Operating Model" says the agile practices that helped organizations respond to COVID-19 should continue in a new operating model.
First, organizations should continue to base business priorities strictly on the company's purpose. Second, they should bypass traditional corporate hierarchies and deploy cross-functional teams with decentralized decision-making authority to address outcome-focused tasks. Third, they should create rigorous processes and invest in reskilling, reallocating, and reenergizing employees, emphasizing skills-based mobility. Fourth, organizations should direct technology toward facilitating the work of customer-facing teams.
McKinsey advises organizations to implement a process to evaluate crisis-initiated changes, decide which shifts to make permanent, and drive a broader transformation toward speed and efficiency. — L. Nelson
U.S. Employers Can Mandate Vaccination
EEOC guidance makes exceptions for disabilities or religious beliefs.
As COVID-19 vaccines continue to be distributed throughout the population, questions have been raised about whether employers can mandate the vaccination of their employees. To clarify this issue, updated U.S. Equal Employment Opportunity Commission guidance states that, indeed, employers can require their employees to receive the vaccine.
The guidance clarifies that vaccinations are not "medical examinations," which cannot be required of existing employees under the Americans with Disabilities Act. Exposure to COVID-19 is largely considered a "direct threat" to the workplace, making a vaccination requirement lawful.
Under specific circumstances — such as a disability or religious belief — the employer could not mandate vaccination and would need to make reasonable accommodations, such as remote work, available for an employee. Only if such accommodation is not possible could the employer exclude the employee from the workplace.
Organizations that require mandatory vaccinations should draft a policy that clearly informs employees what to expect. — L. Wamsley
Building an Adaptable Workforce
Surveys say enhancing employee skills is key to business resiliency.
The COVID-19 pandemic and its tumultuous business disruptions have made organizations rethink what makes them resilient. According to two new studies, what global business leaders now see as key to resiliency is a highly adaptable workforce.
In the 2021 Deloitte Global Human Capital Trends report, 72% of more than 6,000 executives identify "the ability of their people to adapt, reskill, and assume new roles" as a priority for navigating future disruptions. Similarly, according to a McKinsey & Co. survey, Rethink Capabilities to Emerge Stronger From COVID-19, 78% percent of business leaders around the world say addressing gaps in capability is vital to their organization's long-term growth, with 73% valuing retraining or redeploying existing employees to fill those gaps.
"Amid disruptions, organizations either sink or swim based on their workforce's capabilities like collaboration, creativity, judgment, and flexibility," says Erica Volini, principal and global human capital leader at Deloitte Consulting LLP in Phoenix. "It's clear that workforce and human-centric matters are top priorities for C-suite and board leaders."
Both studies show that organizations want to invest in developing their workforce, but many have far to go when it comes to creating effective programs. Still, well over half of the executives surveyed by Deloitte say they plan to focus on "reimagining work" over the next three years. This means not only teaching employees new skills, but giving them more choice over what they do or even integrating the physical, mental, financial, and social well-being of workers into the design of work, itself.
"Moving forward, those leaders who address human capital holistically and build business decision-making around human potential will thrive," Volini says. — C. Janesko
Mindful of Mental Well-being
The pandemic is taking a toll on employee mental health, says Darcy Gruttadaro, director of the Center for Workplace Mental Health at the American Psychiatric Association.
What measures can organizations take to support the mental health of employees during the pandemic?
Data shows a tripling of people experiencing anxiety and depression and major concerns with a potential spike in suicides and overdoses. Employers play a key role in addressing mental health concerns. We recommend that employers use a LEAD Framework.
First, leadership: Leaders set the culture of organizations, so having them discuss mental health opens the door to employees seeking support and services when they are needed. Second, effective communication: Ensure supervisors and managers are regularly checking in one-on-one with those reporting to them. Be sure that people managers are asking how people are doing and giving them space and time to share the challenges they may face. Third, adapt to change: Now is the time for employers to evaluate policies and practices that can be adapted to accommodate for the need for flexibility. Fourth, double down on access to care: Employers should look at their employee assistance program (EAP) usage data and see an increase in people accessing it. If that is not the case, find out why. Work with your EAP to find innovative ways to reach employees in distress.
What are some signs that employees may be struggling with mental health problems?
Nearly everyone is experiencing some strain on their mental health during this pandemic. The key issue is whether people are seeing change in colleagues that is significant and suggests a person may be experiencing a mental health issue. The change could be in appearance, behavior, mood, or thinking. Examples of ways it might show up at work, include:
- Withdrawing from social connection with others.
- Procrastination and indecisiveness.
- Not engaged or not seeming to care about work.
- Angry outbursts or refusal to follow direction.
- Unexplained absence or consistently showing up late to meetings.
- Inability to handle multiple tasks.
- Wandering off topic.
52% of business leaders and employees in 11 countries say trust is higher at their organization today than it was before the pandemic.
61% of business leaders and employees say COVID-19 has positively reshaped their perceptions about remote work, but
55% still think it's easier to trust colleagues in a physical workplace than colleagues working virtually.
"Organizations will need to carefully consider how to foster relationships between location-based and work-from-anywhere employees to ensure hybrid models reach their full performance potential," says Dan Schawbel, managing partner, Workplace Intelligence.
Source: The Workforce Institute at UKG, Trust in the Modern Workplace
How can internal auditors who are feeling stress from the pandemic maintain their mental health and address any symptoms they may be experiencing?
Our mental and physical health are interconnected. Self-care is more important now than ever, especially for those suddenly working remotely. Be sure to get adequate sleep, eat right, set a reasonable work schedule, avoid excessive work hours, exercise — even if it just involves walking around the neighborhood or indoors — and take breaks during the workday. Stay socially connected with colleagues, family, and friends, and find ways to quiet your mind such as through meditation. If you are experiencing distress, do not wait — reach out to the EAP or a primary care provider. Mental health is like any other health issue — the sooner you get help, the better the outcome.
Committing to Social Justice
Investment groups aren't acting on public statements on diversity.
U.S. corporate executives increasingly have been taking stands on social issues such as global warming, economic inequality, and racial injustice, but their actions may not match their words.
In a survey by JUST Capital, 79% of Americans say it will be just as important, or more important, for business leaders to speak out publicly on social issues over the next four years. That percentage compares with 68% who thought so in 2020. Members of both U.S. political parties support corporate leaders' activism (87% of Democrats and 75% of Republicans).
Meanwhile, a report from the nonpartisan group Majority Action found that asset managers such as BlackRock and Vanguard, while making statements in support of racial justice and equality, often do not back up those statements when it comes to composition of corporate boards. Of the 178 S&P 500 companies that had no Black directors as of their 2020 annual meetings, BlackRock voted to support the entire board at 163 of the companies, and Vanguard voted to support the entire board at 166. — G. Nordhoff