With the onset of Covid-19, we began to understand the fragility of our systems. From the production and distribution of food, to a general lack of preparedness within government and healthcare for this global event, we watched the foundations crack across systems that are critical to our way of life. Systems that we largely thought were the model example of an advanced western capitalist society. And through these observations, one thing has become clear — our society’s prioritization of centralization has failed us. In fact, centralization has made us vulnerable.
“In the first weeks of the pandemic hitting, one thing became clear…centralization has made us vulnerable.” — Tessa Forshaw
Historically, for the past hundred years or so, centralization has been considered the gold standard. It yields high efficiency. It provides scalability. It became the key principle for management styles across nearly every type of organization.
Hundreds of leaders and consultants have made fortunes by specializing in centralization via process methodologies such as Six Sigma that eliminate transport, movement, and other types of process waste. This has traditionally been cost effective. But it has also left us vulnerable — and this has never been more evident than in the midst of the pandemic.
Consider this: in just the first month of the pandemic in the U.S., medical-grade personal protective equipment (PPE), ventilators and even crucial medications were unavailable — not just to the public, but to the medical personnel and hospital systems we rely on everyday. Households and stores began running out of basic necessities. Australians and Americans alike made global news for their toilet paper shortage.
By now, you’ve heard these stories. You’ve probably experienced the shortages yourself. But step back to consider how quickly that system failed us. Within the span of a few weeks, vast and complex supply chains required to bring necessities to communities across the world simply broke. These are perhaps the most obvious failures of centralization — centralized approaches to manufacturing, supply chains, and distribution led to several single points of failure across the industry.
But when we think of centralized systems that can be vulnerable during a global event, we often forget to include cities. Never before has the impact of centralization within metropolitan areas been more apparent. Designed for high population density due to an outdated need for us to all be proximally located for work, cities became high-risk zones of contagion during the pandemic.
Rather than risk their health during their commute or while working in their office, workers who were able to do so, elected to remain at home with the support of their leadership. Office buildings in major metropolitan areas across the world were suddenly empty. The on-site technology, tools, resources and physical space, unnecessary.
The once-celebrated open office floor plan — intentionally designed for collaboration, open communication and swift operations — became a liability. And many companies are predicting a work-from-home policy well into 2021. Some have even adjusted for distributed teams to continue to work well into the future.
In New York City, the entire metropolitan area was under shelter-in-place orders. The population density that under normal circumstances brings such vibrant energy, forced New Yorkers to take extra precautions. While much of the country was encouraged to take social distance walks, many New Yorkers feared even stepping outside of their doors. One of my students from Harvard didn’t leave his apartment for nearly nine weeks! Several others did, and subsequently caught Covid-19.
New York was not alone. Similar scenarios played out across the world. Like New York, consumers in the U.K., Australia, Europe, Asia and other parts of the world, stayed home and stopped buying. The pandemic slowed the U.S. and global economy, and companies were forced to lay off employees as a result.
Recruitment stalled, even in organizations hiring for jobs that could be done from home. Not for lack of cash flow, but because many companies had not yet embraced remote recruitment policies and practices, and relied on centralized in-person interviewing tactics.
Yes, all of this has occurred as a result of Covid-19. But the truth is, centralization was a problem long before this global event. The pandemic merely highlighted the vulnerabilities that already existed.
For example, even the way in which you’re accessing this very article on the internet is largely centralized. And in many countries, this centralization has given governments around the world control over the internet and communication (e.g. the Great Firewall of China).
From supply chains, to cities, to the internet, to governments and more, centralization has always allowed for single points of failure and single points of control. In the context of work, it is no different. This default norm of centralization is becoming outdated, and in some instances, harmful.
Centralized approaches to office designs have led to inflated costs of living in tech and business centers such as the Bay Area or New York City. After all, to participate in the opportunities brought about by industries such as tech or fashion, you have typically had to live in proximity to the hiring organizations.
But this approach is also restricting companies for their innovation potential by limiting recruiting to the geographies in which their offices are located, and excluding workers who can’t afford to live in these metropolises.
“As a result of the Digital Revolution, the Future of Work — and the way in which we’ve been forced to re-think how we work in response to the pandemic — society now has new ways of innovating across formerly centralized systems.”
— Tessa Forshaw
Centralization has also traditionally led companies to carry the cost of large, in-house services teams across business functions — from the finance to legal to human resources — even if the teams aren’t in full utilization all of the time.
So, while centralization was an innovation of the Industrial Revolution, we now face new opportunities arising, in part due to the pandemic. As a result of the Digital Revolution, the Future of Work — and the way in which we’ve been forced to re-think how we work in response to the pandemic — society has new ways of working, and of innovating across formerly centralized systems. But only if we leave the constraints of centralization behind.
In response to the vulnerability of centralization during a pandemic, leaders across every industry began designing and building short-term solutions to centralized system failures. But what opportunities exist if organizations work toward distributed, decentralized systems moving forward? The exciting truth is that entirely new opportunities open up that could enhance The Future of Work.
According to Science Magazine, in response to the magnitude of the Covid-19 pandemic, medical providers, infectious disease researchers and scientists were able to compare treatment options, and potential clues to design a vaccine in real-time. Widespread adoption of communication tools such as Slack throughout healthcare and scientific communities accelerated during this time, in order to collaborate across disciplines, organizations and borders. This collaboration, which we will study for years to come, led to globally-distributed decision making at scale, and at speed.
In a similar fashion, without the once-necessary foundation of centralized offices, organizations were forced to quickly (and without warning) begin managing workflows through distributed teams, as their employees sheltered at home. Without the confines of geography, organizations are able to tap into a broader pool of talent beyond traditional tech centers with high costs of living — meaning talent can live anywhere, without limiting their professional opportunities.
Using workflow technologies such as Asana, Airtable or Monday, organizations are able to create transparency to see when, where and how successfully work is being completed. As a result, distributed collaboration can be successful at scale. This means companies can recruit remote-only team members moving forward, as well as partner with external talent networks, agencies or freelancers, tracking project successes and ROI in real-time.
Already, we’re seeing positive outcomes — more authentic leadership leading to increased trust between employees and organizations, and better work/life balance for employees at every level. We’ve also seen more authentic and even humorous interactions with our colleagues and their kids, allowing us to understand our teammates on a deeply personal and human level. And the list goes on.
As a result of the unexpected positive outcomes, Twitter, Nationwide, CoinBase, Google, Facebook, Zillow, Drift, Amazon, Microsoft, Slack and more, have implemented long-term — if not permanent — work-from-home policies. And distributed web platforms like Braintrust are using emerging technologies such as blockchain to create transparency between organizations and individuals. In doing so, they’re helping organizations rethink how their workforces are structured, and assemble flexible, vetted, distributed teams to tackle business challenges on an agile and as-needed basis.
Watching the world respond swiftly to the challenges of the pandemic has accelerated the adoption of technologies such as blockchain, as well as the tools, methodologies and communication that is accelerating the Future of Work. The way in which people have come together to solve a challenge beyond the confines of organization, specialization, geography or nationality, will be studied in the future. And it should be studied in the future! We’re living in the midst of a global transformation, and the opportunities of decentralization are unfolding before us!”
To learn more about how my research on the Future of Work can inform your business strategies, or how you might design for centralization, please reach out! I’d love to hear from you.
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