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In this episode of Lehigh University’s College of Business IlLUminate podcast, we are speaking with Andrew Ward about societal shifts, and how your organization can actually plan for things like COVID-19 and a world pandemic. Ward is a professor in the Department of Management in the College of Business at Lehigh University. He conducts research on issues related to corporate governance including CEO succession, CEO compensation, CEO board relations, reputation, and leadership. And he's also working on a book titled Shift Happens: Ensuring Organizational Resiliency in a Disrupted Future.

He spoke with Rob Gerth, director of marketing and communications for Lehigh Business. Listen to the podcast here and subscribe and download Lehigh Business on Apple Podcasts or wherever you get your podcasts.

Below is an edited excerpt from that conversation.

Read the complete podcast transcript.

Rob Gerth: There's a grocery store chain in Texas – H-E-B, and they actually planned for a pandemic. They were thinking it would be flu, but what was it about this chain of supermarkets that was on target where the rest of the country wasn't prepared?

Andrew Ward: I think it's actually more surprising that this chain of stores was prepared, rather than the others that weren't prepared. Because most of us don't really think that far into the future or how the world is changing around us. Businesses also run by individuals are the same way. So businesses tend to focus on executing their business in the environment they face today and spend relatively little time thinking about what is coming down the pike. I mean, really, we all had a chance to see this coming when it began in China and started getting publicity in January and started spreading. So it's not so much that we can't see it coming. It's really that we don't want to. We prefer not to make changes in our lives until we're forced to do that. And yet when you have big changes like this, change is going to be forced upon us, and it is those who are prepared and take that early action that have better outcomes. 

Gerth: Can you give us some examples of some things that caused societal shift in the past? Was 9/11 a societal shift?

Ward: There's certainly these individual events like what's happening now or 9/11 that are big events, big crises, big disruptors. And most of the things that we're talking about in terms of societal shifts are more of these kind of big, continuous disruptors that happen over a longer period of time, rather than being sort of individually event-driven. And, I mean, one of the things about these individual events is that when you have a kind of immediate, obvious threat people can be mobilized to take action to overcome it.

It's often much harder to mobilize people to combat these continuous, incremental disruptors like climate change, for example. When there's a climate change event, like a hurricane, people will jump into action, but even though we're facing higher and higher frequency of these events, it's hard to mobilize people into making changes to their everyday lives to address it. So that's why we're thinking about this, and it's why people like Greta Thunberg, movements like Extinction Rebellion are trying to draw our attention to these kind of emerging trends and emerging crises before it's too late. But equally, it's why most people are ignoring these things.

Gerth: In the book you're working on, you're following eight major societal shifts. Can you run through those and give us a little example of what each one is?

Ward: The changing demographics, climate change, big data/fast data, rapid urbanization, social commerce, blockchain, technology advances in particular artificial intelligence, and energy generation and storage:

Demographics - In the developed economies like the US, people are generally living longer, healthier lives, but they're also having children later and fewer often. And so we're seeing an aging society and a declining population. In developing economies we're seeing a very different sort of picture. We've got a younger, booming population, and there's vast potential there for a sort of economic development. And so we'll see maybe a big sort of shift in the economic pattern of the world there. 

Urbanization - Back in the 1950s less than 30% of the world lived in urban areas. By 2008 we crossed that threshold of 50%, where now more than 50% of the world lives in an urban area. By 2050 this is going to be probably 75%. The US is already pretty urbanized, but you're going to see huge growth in urban areas in Asia, in Africa particularly. And this development of these sort of big megacities which continue to get bigger and bigger. And that has big implications for things like the spread of pandemics. When we're all so packed into small areas and relying on public transportation and dense populations.

Climate change - We're focused on climate change as a big shift. We've seen this huge, dramatic rise in these major weather events. We track these weather events that cause more than a billion dollars’ worth of damage, and the just number of those over the last forty years has just escalated tremendously. 

Energy generation and storage - There's a vast potential to shift energy generation both at the grid level but also in terms of microgeneration. We're trying to see a shift to renewable energy, but storage is key to that. The problem with renewable energy is that the generation of it is unpredictable. And lot of energy is used when the sun goes down. How do you store that energy to be able to transfer it within time? And it's also going to lead to the transformation of transportation, digital devices, all sorts of wearables, and kind of other industries that will be spawned from that.

Big data and fast data - We're currently analyzing only a tiny, tiny fraction of the data that's collected, and there's just such a huge potential in so many areas, particularly in healthcare. One of the keys that everybody's talking about now in terms of controlling this pandemic is the lack of sort of information and data that we have about its spread and who has it and testing and things like that. Then we're looking also at technological advances so whether it's robotics, internet of things, but particularly artificial intelligence and how AI will transform will transform the workplace and will disrupt many professions, occupations, particularly white-collar jobs.

Social commerce - We've seen this big decline in trust over the last 40 years in the institutions of society, and what are we using as a basis for trust now? Social commerce. These peer-to-peer platforms that we're using more—trusting more peers and reviews and things like that and these platforms like Uber and Airbnb where we do things that we thought we'd never do. Getting into cars with strangers or staying in strangers' houses. It's just reflecting a big change in the nature of trust. And then there's the rise of social influencers, the people who are—not necessarily celebrities, but people in spheres whether it's going to be talking about recipes or looking after dogs or whatever it is that you've seen this rise of social influencers who are creating a new basis for trust through relationships.

Blockchain - Also all about trust. We've heard of bitcoin probably and other cryptocurrencies, but what the underlying technology of blockchain is all about is just connecting secure records of transactions and digital products so we can use and have a secure record of different transactions. And so that has the potential to sort of replace potentially a lot of institutions, and so you're seeing blockchain being used in financial services a lot right now but also in other areas like healthcare and digital health records and areas like that.

Gerth: Why is it so hard for companies to address these issues?

Ward: I think part of the problem is this very short term focus in US business and this shorter and shorter tenures of CEOs. And a lot of these things that we're talking about—it's going to be 10, 15 years before people are literally forced into action, and so what we're trying to say is, "Well, let's kind of think about this." But the incentives aren't necessarily there for people to think of them if they're being rewarded on a short term basis, if their likely tenure is only relatively short: 2, 3, 4 years. 

Gerth: Do you have any advice for organization’s trying to look at societal shifts?

Ward: It really has to be driven by the senior leaders in the company. Someone who can say, "Well, we need to be able to think about this because in a lot of instances if the world changes dramatically, then we're going to go out of business."

One of the things that's interesting about what's going on right now with the COVID-19 crisis is that we're seeing this massive shift where you've got a lot of companies which are effectively shutting down and going out business even if it's temporarily. And on the other hand, you've got other businesses which are producing as fast as they can and growing as fast as they can and ramping up as fast as they can because that environment shift's in line with what they're doing. And so this is just a picture, a kind of rapid speeding up of what is actually going to happen over a longer period of time due to all of these types of societal shifts.

Andrew Ward

Andrew Ward

Andrew Ward, Ph.D., is a professor in the Department of Management at Lehigh Business.

Rob Gerth

Rob Gerth

Rob Gerth is director of marketing and communications at Lehigh Business.