Empathy: the Post-COVID Catalyst

Animal Domestication. Agriculture. Industrial Revolution. The Internet.

Evolutionary incidents that occurred over centuries and decades in uniting the world, then flattening it, and eventually connecting us all in real-time.

In less than a quarter, a micro-protein gone rogue has the whole world grounded to a halt to help flatten the curve of the virus onslaught.

The COVID-19 has not just halted daily life, but has reset as life-as-usual.

Even as the world recovers, finds cures, and builds protection against this pandemic and hopefully future ones, there are some undeniable signs of reset we cannot ignore. The underpinning common theme in all these signs is EMPATHY.

Long seen as a global supreme power, the U.S. is shaken and trying to grapple with it's long history of being run by financial pressures rather than business-driven demand: we don't have the supply chain control or nimbleness to pivot our manufacturing facilities to produce the much-needed masks, drugs, and protection. We sent low-value roles offshore, and now struggle to find talent to execute what are suddenly "mission-critical" jobs. We acquired innovations in the seemingly "noble" guise of championing growth, only to shut down competition.

People are considered as balance sheet numbers: innovation talent, knowledge repositories, and think-tanks are lost in quarterly employment numbers. Recall Motorola? The IPs were sold on a fireside deal to Google. Yahoo? You get the point.

Boeing had a toss-up of building a fighter jet or the 747 in the 60s. The chief engineer stood up to the CEO and told him he would not let go of his team of 1000+ engineers. What was planned as 17 aircrafts today numbers over 2500+ Queens of the Skies that Boeing is still building. And banking on.

When the pandemic hit the U.S., the bean counters cowered under their roofs and kept quiet. Understaffed healthcare and frontline people from hospitals (which organizations these bean counters had stripped to the bone) are the ones who stepped up to save lives. Including the bean counters'.

Enterprise leaders should bravely stop answering to quarterly results, and build their organization based on Empathy. If every employee is going to come to office wondering when they would be dealt the pink slip, you are not going to see innovation. Your employees will not add value. They will simply focus on keeping their jobs safe. After COVID-19, most employees aren't even going to come into an office, and keeping them anchored to the company vision will take a new set of DNA.

The Enterprise of the Future will thrive on Value. And value is engendered by treating employees with Empathy.

In the larger picture, economies that depend on offshore labor arbitrage are going to find themselves importing goods at higher prices from the countries they were exporting to, or discount license fees for IPs.

As Marshall Auerback writes, "Much of Europe and Asian countries like China, South Korea and Japan are poised for the transition. Based on their traditions of rigid state-driven capitalism, these nations instinctively grasp how state capacity and direction can help drive further industrial development. It remains to be seen if the U.S. is fully capable of it. That is unlikely, if the prevailing neoliberal ideology persists, limiting the role of the U.S. government to be, at best, a neutral umpire that sustains efficient, rent-free markets able to supervise the delivery of an increasingly narrow set of public goods (as opposed to an active participant in industrial policy)."

We are already seen as a weakened or even irrelevant power in the G7 and other global events. Our college education is a free-market business, more focused on producing football teams and building $1B stadiums, more under pressure for star faculty to publish-or-perish, raise multi-million "chairs," and less focused on teaching, research, and innovation. We have the largest university system in the world.

Our healthcare system has been sundered into opaque fine print and legalese, denying the very paying pool the services they are sold. Health benefits eat up a full 15% of average income in the U.S.

Our banking system is the world's laughing stock. Bank CEOs pay themselves unquestioned bonuses, even as they fire a few thousand people every quarter or so. The very word "Bank" has lost trust with people.

The Congress and Senate fight "socialism" and yet would be extremely reluctant to tie their pays and health benefits to performance and goals.

A new form of governance based on Empathy is the need of the day.

Auerback concludes: "The question is: As the world moves to a post-carbon future, can the U.S. economy take away the primacy of rent-extracting sectors like finance, insurance and real estate; Hollywood films, smartphone apps, or increasingly irrelevant sectors like oil and natural gas exports, and join the leaders of the pack? Or is coronavirus merely the pandemic that presages a more terminal disease?"

Your thoughts welcome.

Karthik