Reinventing Capitalism for the post COVID-19 world

For the past few days, predictions of what will change in the World once we have cleared the current crisis are popping up everywhere. As this unprecedented global situation unfolds, the long-lasting effect on our society become evident. Among a handful of global revolutions, there seems to be no turning back from COVID-19.

As food for thought, I recommend starting with this fascinating Politico article from Friday: “Coronavirus Will Change the World Permanently. Here’s How.”

Today I would like to focus on three of the changes mentioned by Politico which will directly affect Out Leadership member companies:

  • Less individualism
  • The rules we’ve lived by won’t all apply
  • More restraints on mass consumption

COVID-19 is highlighting several dysfunctions in our economic system even further: abysmal inequalities (the poor are disproportionately affected by the virus); the frivolity of an economic system focused on consumption rather than connection (we discover we do not have what we need but have a lot of stuff we don’t need in our home these days) and the complete aberration of individualism in a connected world (our personal responsibility in responding to “common bads” has never been so obvious – we can all play our role in combating the virus).

This will only accelerate the collapse of companies and brands which cannot demonstrate a social purpose. Specifically, companies will be expected to demonstrate a commitment to greater equality, demonstrate that their product fosters human connection and finally that as an organization they contribute towards a “common good” objective.

At Out Leadership, we predict that companies will find themselves under unprecedented pressure from employees, consumers, and shareholders in the immediate aftermath of the crisis to meet their legal responsibility to respect human rights and expectations to act as “good corporate citizens”. A recent study showed that 67% of young consumers in the United States have stopped purchasing from companies they believe stand for something or behave in a way that does not align with their values. A 2017 survey found that 75% of people in the US believe employers should take a public stand on matters of importance. This trend will only accelerate.

Among several initiatives to prepare the future launched in the past two weeks, Out Leadership is working with the Center for Talent Innovation on a white paper on “Diversity & Inclusion in times of crisis” looking at the lessons learned from the 2008 economic crisis and how companies can ensure that they continue to demonstrate their values in a world in which values will become paramount.

LGBT+ equality, besides being the right thing to do, will remain an efficient way – arguably the most efficient way – of signaling commitment as a company to the values of human rights, diversity and inclusion and of meeting expectations of staff and stakeholders. Given the stigma that many LGBT+ people experience, a company’s willingness to stand up for LGBT+ inclusion is seen by many as a litmus test of its values.

The COVID-19 hangover will see the triumph of value-driven companies and change capitalism inexorably for the better.