“Substantial overheads created by physical locations could easily be cut….That would certainly be wiser than cutting research and development budgets, which, when budgets are tight, are frequently where the C-suite looks for savings—a strategy that can only be characterized as shooting oneself in the foot.”
The first half of 2020 has brought so much upheaval and disruption that it is almost hard to contemplate. In the future, there will be entire treatises and dissertations written that seek to understand the socioeconomic, psychological and inter-personal dynamics brought to bear. For now, individuals, families, business leaders, government officials— everyone really—are left to figure out what is next in this ever-changing landscape before us, which in the United States has become even more complicated by domestic unrest in virtually every major city.
Few could have imagined in January that by March the U.S. economy would be completely shuttered, along with most major economies around the world. Even fewer could have imagined that as businesses struggled for survival historic civil unrest would grip America. Are these disruptions the new norm? Doubtful. This too will pass. One Italian virologist has suggested that COVID-19 is mutating to become less lethal, as is common with many viruses, particularly coronaviruses. And the violence in the streets seems to be waning, although protesters seem determined to have their voices heard.
In the Trend Toward Remote, What Becomes of Silicon Valley?
As states are opening up slowly, many businesses— of all sizes really— remain cautious. Plans to return to pre-COVID normal are being discussed, but how can you, for example, get employees into the office when the U.S. Centers for Disease Control and Prevention (CDC) continues to recommend social distancing of at least six feet? With many offices being in high-rise buildings and elevators being only so large, the logistics of getting staff into and out of the office safely are daunting, let alone the reality that there is no plan for social distancing when using mass transit, for example.
Luckily, many corporations and firms have discovered that their employees have been nearly as productive— if not more productive— working from home. Indeed, Facebook has announced that they are moving toward a permanent remote workforce. And if Facebook is making such a move, many other Silicon Valley tech companies will certainly follow suit, as will corporations and law firms all over the country.
But what will become of Silicon Valley? Silicon Valley largely exists simply because it exists. In other words, the raison d’ être for Silicon Valley is because large tech giants have located there, bringing hundreds of thousands (if not millions) of jobs into the area. It has caused real estate to be among the most expensive anywhere in America. If Facebook and other Silicon Valley tech companies are not going to physically be located in “the Valley” what becomes of the real estate market?
Shooting Oneself in the Foot
And what becomes of the real estate market in major U.S. cities that have long been home to law firms and corporations? Is it really necessary moving forward to be paying $60 or $70 or $100 or more per square foot? Substantial overheads created by physical locations could easily be cut, making physical locations one of the first casualties of the post-COVID U.S. economy. That would certainly be wiser than cutting research and development budgets, which, when budgets are tight, are frequently where the C-suite looks for savings—a strategy that can only be characterized as shooting oneself in the foot.
Of course, most companies just can’t help themselves. When money is tight, the order from the C-suite is to stop innovating. Despite the need to readjust priorities and support remote workstreams, 70% of respondents to a recent survey reported having to put IT projects on hold due to the lockdown. “With less time and fewer resources to innovate, businesses are challenged to explore new technologies to deliver the applications that they require,” writes [AI]thority.
Position for Transition in Post-COVID Economy
While predictions are always difficult, it seems certain that the post-COVID U.S. economy will look very different, with many more employees permanently working from home. And perhaps the real estate market will look very different as well. But what is not difficult to predict is that those corporations and firms that have robust computer systems and have a willingness to leverage cloud based systems will be best positioned for the future. We know this without a doubt because those companies and firms that had the most robust computer systems and cloud work environments were best positioned over the last three months, transitioning very easily into what could very well become the new normal—not because of any second wave of COVID-19 or greater civil unrest, but because remote workers are extremely productive.
Of course, even those forward-thinking employers will need more stout and powerful systems to enable a truly all-remote, all-secure workforce to deliver over the long term. Hacking and various other security threats have become omnipresent in 2020, and with a diffuse workforce, those threats will only escalate. But finding the right employees—which will become essential if you are going to trust your workforce to professionally deliver from home—could become easier because your geographical area will become the world.
So Much More to Discuss
“We are on the cusp of a new workplace, one where distributed workforces can collaborate on projects from any location and innovate together,” Johan de Haan, CTO at Mendix told [AI]thority.
It is probably more accurate to say that forward-thinking corporations and firms are on the cusp of a new workplace, with revolutionary possibilities that can offer significant cost savings by eliminating unnecessary overhead and focusing on what the office of the future will be.
For more information on this topic, I invite you to join me for a free webinar conversation on Tuesday, June 30, 2020. Our conversation will focus on what the post-COVID U.S. economy will likely look like, how corporations and law firms can and should be positioning themselves today, what types of computer systems and resources they can and should deploy to enable their workforce to safely and securely collaborate together and with clients, while keeping sensitive data and information secure, and much more.
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