So many aspects of lives operated on autopilot until recently. Not anymore. The second and third-order effects of C-19 are — for good and for ill — breaking centuries-old habits. The Coronavirus just pressed CTL-Alt-Delete. Let’s embrace this fresh start.
Almost exactly 5 years ago, back in season 5 of “Game of Thrones” (sidebar: doesn’t it seem like a lifetime ago that we had the luxury of being consumed with a mere television show?), the putative Queen of the Seven Kingdoms Daenarys Targaryen lamented the stasis of Westerosi society and proclaimed:
“Lannister, Targaryen, Baratheon, Stark, Tyrell — they’re all just spokes on a wheel. This one’s on top, then that one’s on top, and on and on it spins, crushing those on the ground. I’m not going to stop the wheel. I’m going to break the wheel.”
It occurred to me recently that C-19 accomplished what Khaleesi couldn’t: it “broke the wheel”. While much of the analysis in the news has been forward-looking (how coronavirus will alter life at some point in the future), it is already transforming us in meaningful ways.
One immediate impact is the suspension of certain personal as well as societal habits. Only time will tell if these shifts are structural or cyclical, but I believe that some changes are going to be permanent. Why? Because we’re being forced to turn off the autopilot at the same time as we’re being presented with the necessity to do things differently. While C-19 is taking lives and ravaging livelihoods, it’s also — in the background — forcing us to reassess whole aspects of our society.
I’ve noticed that the crisis is having three particular effects, all of which might turn out to be permanent:
- We’re breaking the stranglehold of antiquated practices
- We’re recalculating what constitutes value in the COVID-19 world
- We’re shifting where we spend our time and money, and soon maybe where we call home
In other words, our lives just got a hard “reset’.
The end of a lot of QWERTY Effects?
Two of the social institutions that formed the heart of our day to day existence until the Coronavirus hit — working 9 to 5 in an office and our kids going to a physical school — are actually throwbacks from other centuries that have long since gone past their best-by date.
If nothing else, C-19 has put an end to the lie that we need to go to a workplace in order to perform our knowledge jobs. Let’s be honest: commuting sucks (especially here in LA, where I live) and the virus has provided a tantalizing taste of life without it. I can confidently predict that we’re not going to work like it’s 2019 ever again.
In fact, the shift has already begun. Twitter’s CEO has announced that its employees can WFH forever if they want. Spotify and Shopify both recently decided that they will become “remote-first” companies. Facebook’s Mark Zuckerberg also moved aggressively in that direction, declaring that “in 5–10 years we could have 50% (of our workforce) working remotely.”
Overall, analysts predict that over 25% of American employees will work from home at least part-time by 2022 — up from only 4 percent before the pandemic.
And why not? Spending one hour stuck in traffic or on mass transit to access the same inbox you have at home was an institutional relic of a bygone era. The idea that one has to “go” to work dates back to when it involved assembly lines and factories, not Google Docs and Microsoft Teams rooms.
What about sending your kids to school so that they can be taught as one undifferentiated group in a classroom? Well, until we were reluctantly forced to abandon it in March, we were blindly relying on an 18th-century notion in a 21st-century world. Don’t believe me? The current model of secondary education was actually inspired by the Prussians (a country that no longer exists) at the insistence of Frederick the Great after the country’s defeat in the early stages of the Napoleonic Wars.
These are both examples of what is called the ‘QWERTY Effect’, named after the curious reason why most English keyboards have letters that spell out Q-W-E-R-T-Y in the upper left-hand corner. In the era when people wrote on typewriters with keys, the mechanics of the earliest machines were very delicate. The main challenge was to prevent users from typing too quickly and jamming the type-bars together. In 1873, Christopher Latham Sholes managed to slow down the speed at which people could type by laying out the keys in one of the least efficient ways possible, and the QWERTY layout was born. Fast forward almost 150 years, and the keyboard on which I’m typing (should I write ‘keying’?) this post on is still the same.
The QWERTY keyboard has become a metaphor for practices that persist well past their point of relevance, and for the power of high switching costs (an economic term quantifying the resistance to change) in preserving outmoded but deeply ingrained activities. One of the silver linings of the Coronavirus is that we’re getting rid of some of these societal fossils — and not a second too soon.
But that’s not the only reconsideration that’s happening.
A lot of our utility calculations are about to change
One of the most important consequences of this pandemic is that it’s forcing consumers to reconsider “value” going forward.
Why do people go out to eat? As an Australian chef recently noted, “It’s not just about eating. It’s about social interaction, the atmosphere — it’s dinner and a show.” But what if there is less pomp and much less romance on offer at the restaurant? Diners can now look forward to shorter and disposable menus, higher prices, service with a mask instead of a smile, and a less pleasant experience overall. So will it still be worth it? We’re about to find out.
Here’s another new proposition: will you still travel if it takes you 4 hours to check-in? Imagine getting your temperature tested as often as we currently get our boarding passes scanned. How about if you have to raise your hand (I’m not joking) to get permission from someone from the cabin crew to go to the bathroom on the flight? These are some of the changes being proposed in order to make flying safe. I’m sure that we’ll suffer these indignities for that trip to the sun to escape East Coast winters, but will the trade-off look positive for a day trip from LA to SF?
For this reason, business travel seems unlikely to return to pre-pandemic levels, now that Zoom proved to be a decent substitute. If you can close the deal from the comfort of your own home, will you still accept to be an Uber-Airport-Conference Room-Hotel Room-Airport-Uber road warrior as readily?
These reassessments all turn towards the negative. However, some might flow in the other direction. What if a current “bug” becomes a feature? Up until now, people have largely been forced to work in an office. But soon going to a workplace will be a lifestyle decision. Young people who have small apartments and who want to socialize as well as meet their future wives and husbands will opt-in; commuters will move out; introverts and extroverts will sort themselves according to their social type. The bottom line: there will be more options, and how we make those cost-benefit calculations will have changed completely.
Some of these reconsiderations might actually reverse the centuries-old trend of increasing urbanization, upending not just how we live and work, but where.
Are cities like New York as attractive a destination to live in if you don’t have to be there to have a job in Finance or Fashion? When professional opportunities are decoupled from a specific urban center — Seattle for Microsoft and Amazon, NYC for Wall Street, Hollywood for actors — the appeal of the place will turn on other factors. In other words, the utility of living in a city will be computed differently.
I suspect that the new urban living equation will produce some immediate losers and reshape the demand curve for downtown. For instance, I think that commercial real estate is a dead man walking. Residential real estate assumptions may be totally remade, too. I could see cities becoming the near-exclusive province of young people — relatively immune to C-19 and desperate to socialize, despite the risks (“I’m not going to let Corona stop me from going to spring break!”) while empty-nesters leave the city core and flock to exurban and even rural areas. The CEO of real estate website Redfin said on CNBC recently that he predicts an exodus from large expensive cities like NYC and SF in favor of cheaper ones (Philadelphia or Portland) but even more to big towns (Madison, WI and Boulder, CO).
It’s early days yet, but what made sense before COVID-19 may not from now on. This will be true for how we vote with our dollars in addition to our feet.
We’re going to allocate capital differently
Home will become even more of a castle for a lot of us. Money that would have gone toward things like gym memberships are being re-allocated to Peloton and Fight Camp for some, a set of barbells for others. As Scott Galloway points out, companies that cater to sprucing up our hearths (Restoration Hardware, SONOS) will be buoyed by that rising tide. You can bet that a bigger share of wallet will go towards making our home and WFH environments more pleasant (bigger TV) and productive (better desk) for the foreseeable future.
This is already happening. Overstock.com reported recently that outdoor furniture sales have exploded in recent weeks as Americans settle in for summer staycations. What was once “nice to have” is now “need to have”. Fast home broadband is mission-critical (for Netflix … oh and also for work); so is a good home computer (and lighting for Zoom calls).
C-19 is completely upending how we spend our money, and many of these changes will be permanent.
Not every part of the wheel got broken, of course. In fact, C-19 has actually exacerbated some deplorable aspects of our society
Inequality is already worse today than it was 2 months ago, and it will only widen in the coming years. The twin health and economic crises are disproportionately affecting people of color, as well as the poorest and most precarious among us.
The gulf between the 1% and the 99% is becoming a Grand Canyon. The U.S. Labor Department said another 2.4 million workers filed jobless claims last week, bringing the total number of jobs lost since mid-March to 38.6 million. But the impact is not being felt equally. Nearly 40% of Americans who make $40,000 or less have lost their jobs during the pandemic, compared to 19% of Americans who earn between $40,000 and $100,000 per year, according to the Federal Reserve. Meanwhile, just 13% of people with $100,000 or more in annual income have lost their jobs.
So too, somewhat counter-intuitively, is the distance between the 1% and 0.1%. The Bobby Axelrods and Logan Roys of this world are getting richer while the middle-class hollows out further and faster. In fact, more than 600 U.S. billionaires have already increased their combined net worth by $434b during the coronavirus lockdown, according to Forbes.
It seems like the Lannisters can’t stop winning, even when Winter has come for the rest of us.
So what does this all mean for you?
C-19 will no doubt change the way we live and work, but let’s not be blind to how it has done so already. Many of these transformations are wrenching in the short term, but some might turn out to be silver linings.
First and foremost, ask yourself: what is most important to hold on to, and what can I let go of? Are there QWERTY-like aspects to your life that you’ve been allowing to linger purely out of habit? Can you use these strange times to “spring clean” some outdated practices at your organization?
We’re being given a chance to adopt new — and ideally better — ways of living. For many, WFH is producing a lot of WTF moments. But if we get the hang of it, we might also achieve better work-life integration on the other side of this.
Second, think about how this could affect your career, company, or industry. Just because you seem to be spared doesn’t mean that the downstream effects of this crisis won’t reorder your world, too. I’ve written before about how change feels perilous for most of us. But it also presents a real opportunity — for creating innovative products and services, for instance. Resets can be positive, too.
So explore what’s being transformed, while also being open — even willing — to adapt. Contrary to popular belief, evolution is not merely the story of the survival of the fittest; it’s about adjusting most advantageously to new circumstances. The Coronavirus is not an extinction event, but it is triggering a wholesale re-ordering of societal and economic eco-systems.
We may not have summoned this moment, but we can make the most of it — by embracing the clean slate some of this has provided. In some profound and probably permanent ways, the wheel we have gotten so used to has been broken. Rather than lament the loss, let’s embrace the restart — and leave behind what should have been left behind long ago.