Posted: 11 Jun. 2020

Welcome to the virtual age: Industrial 5.0 is changing the future of work

by Rahul Mehendale, managing director, and Jennifer Radin, principal, Deloitte Consulting LLP

Last month, Twitter CEO Jack Dorsey told employees that many of them would be able to work from home indefinitely…even after the risk of COVID-19 subsides. That prompted us to take a look at how the pandemic might make working remotely the rule rather than the exception for our health care and life sciences clients. Most of our Deloitte colleagues have been working remotely since the middle of March. Back then, many of us expected that we (and our clients) would be back in our offices after a brief stretch working out of our temporary home offices. Our home offices have since taken on a feeling of permanence.

COVID-19, an event that has accelerated several aspects of the of future of health, has become the catalyst to a future of work that might otherwise have taken years to attain. Rather than a new normal, we expect the new abnormal will continue to evolve. The end-state is neither clear nor predictable. 

We now understand that few people will return to the workplace they knew a few months ago. Even frontline clinicians—who never left their physical workplaces—have watched their jobs change in countless ways. With people unable or unwilling to leave their homes for health or safety reasons, businesses have had to adapt to accommodate their customers. For instance, nearly double the number of consumers used telehealth or virtual health in the past year, now at 28 percent, according to a recent Deloitte survey of more than 1,500 consumers. As more physician-patient interactions happen virtually, this percentage will likely continue to rise, as our colleagues Bill Fera and Urvi Shah noted in an April 28 blog. To prepare, health systems should ensure clinicians are trained on how to interact with the patient during a virtual visit.

Welcome to the Virtual Age

COVID-19 has heralded the start of the Virtual Age, which is tectonic enough to qualify as the Fifth Industrial Revolution. A recent survey of 25,000 American workers found that 34 percent had the option to work from home. This is more than double the pre-pandemic amount of 15 percent.1 Across multiple sectors, workers are conducting meetings, participating in workshops, and receiving training via the internet. This blog, for example, was written and edited online and discussed in virtual meeting rooms. The Fifth Industrial Revolution has us all re-imagining work, workforces, and workplaces.

Deloitte’s COVID-19 response framework helps us structure strategies and actions along the three phases—Respond, Recover, and Thrive. Right now, we are at the tail-end of the Respond phase, which has been marked by immediate actions (e.g., sheltering at home, shutting down office locations, and eliminating travel). The Recover phase will build upon what we learned during the previous stage and can help ensure we can reopen work environments while minimizing the risk to employees. As hospitals and health systems move from responding to recovering, they might see an influx in demand from patients who had deferred services or who had been reluctant to reach out to their physician. We also expect to see continued demand from patients for virtual health services.

Our discussion, however, takes a longer-term view to structure the Thriving phase in the rapidly unfolding Virtual Age. A survey of human capital policies and practices in China at the onset of the COVID-19 outbreak revealed that 90 percent of people deemed it was an urgent requirement to provide their employees with remote and flexible work options, as noted in a recent Deloitte article, The heart of resilient leadership: Responding to COVID-19. We expect this percentage will be substantially higher in the post-COVID-19 world.  

We have identified five potential elements of success in the Virtual Age. This is not, however, a one-size-fits-all approach. 

1. Culture: Culture eats strategy. Culture is the most important determinant of business success because it makes it possible for an enterprise to quickly prioritize across competing activities and quick decision-making that expresses the value system. In a new hybrid business model, there is no common area where employees can interact. Without seeing co-workers regularly in the workplace, a once strong and supportive culture can easily slip away. This can leave people feeling isolated and less productive. Employees also might be less inclined to build meaningful relationships with co-workers due to the increased effort and awkwardness of networking virtually. Moreover, the absence of close interactions with leaders, who demonstrate corporate values and culture during day-to-day activities, can make building or maintaining a cohesive and effective culture quite challenging.

To build an effective and strong corporate culture that expresses the values of the firm, businesses will need to continuously promote connectivity and interventions that can prevent isolation among employees. Leaders will need to host many more discussions and transmit their values. At every stage, leaders will have to display regular transparency. Along with covering actions, they should explain why actions were taken, and the options that were considered. Employers should work to make it the norm to stay connected through frequent virtual video check-ins or social events with teams and collaborative working sessions. This can help to build camaraderie and a sense of belonging. Seeing other people, and being able to recognize facial and physical cues, could help increase productivity, accountability, and collaboration, which are key factors to a successful team and culture. 

2. Organizational: Some of today’s work-from-home models could gravitate toward a work-from-anywhere-on-the-planet model. How we recruit and identify talent will likely go through some enormous changes. For example, perspective employees might no longer come into an office for an interview, nor will they base employment decisions on the location of the business. Remote teams can outperform traditional teams if the work is designed correctly, according to the recent Deloitte article COVID-19 and the virtualization of government. Some organizations will likely adopt hybrid models where remote working is complemented by bringing people together in central locations regularly to augment the remote structure. As working as a group becomes less frequent, company leaders should spend more time talking with their employees.

3. Economic: An immediate benefit of the Virtual Age is the drop in operational costs for expensive office space and reduced travel expenses for employees. However, remote working, combined with a further explosion of gig-based contract jobs, could lead to new economic models, which could have dramatic implications for tax and intellectual property (IP) policy. Some businesses might need to pay taxes in geographies where their employees live. How business IP is structured and held could grow more complex, driven by fragmentation in where it is developed, where it is hosted, and where it is deployed and maintained. This could further contrast geographically disparate locations where economic activity related to this IP is finally executed.

4. Infrastructure: As we reimagine workplace, video conferencing platforms and document sharing sites that help improve the flow of communications will likely be seen as table stakes. For some businesses, IT and technical support will become more complicated because there will no longer be a single location for employees to find supplies, equipment or technical assistance. Security, collaboration, connectivity, and access can drive productivity. Adapting to telework can be key for business productivity, but the cost of building the infrastructure to accommodate thousands of employees could be complicated and expensive. Augmented workforces using voice technologies and artificial intelligence can alleviate the need for consumers and service providers to be co-located. With remote-work platforms, shared services can be sourced from anywhere.

5. Relationships: The ability to quickly build inter- and intra-organizational relationships could be critical in a virtual work setting. Three areas—responsiveness, enthusiasm, and creativity—could outweigh any other metrics for relationship building. Responsiveness builds a sense of trust and dependability among peers and colleagues. Employees who consistently respond within three hours may become the norm for effective relationship building. The ability to express enthusiasm will likely be crucial for building effective virtual work teams. As it becomes difficult to observe body language, the shift from the non-verbal to the verbal will likely be a challenge for employees to master. Being able to sense someone’s enthusiasm for a topic during a virtual meeting, for example, can create an immediate sense of a relationship between two people. People who come up with effective ideas or solutions will likely gain credibility more quickly in a virtual setting.  

An opportunity in disguise

 The COVID-19 pandemic has created a rapid shift in behaviors that impact us all personally and professionally. But rapid change can bring opportunities. As we adjust to this virtual world, network effects that distinguish digital business models with the prevalence of winner-take-all or winner-take-most models become only more important for business sustainability and success. Health organizations that effectively execute on the five pillars outlined in this blog should be positioned to create value for their customers as well as their clinical and non-clinical workforces. As we re-imagine the new reality of health care together (and shape the human experience of consumers and workforce experience), how we leverage this unique opportunity to bring the ecosystem actors together can define the way forward into the future of health.

Endnotes

1.  Is working from home the future of work? Forbes, April 10, 2020

2. 9 ways to fight mental health stigma, National Alliance on Mental Illness, October 11, 2017

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