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HOME NRI JOURNAL What Type of Leadership Does the Coronavirus Pandemic Demand?


Innovation magazine that generates hints for the future


What Type of Leadership Does the Coronavirus Pandemic Demand?

Hirofumi Tatematsu, Senior Corporate Managing Director, Consulting Division


#Hirofumi Tatematsu

Oct. 19, 2020

The Covid-19 pandemic is creating massive changes in society and the economy. Most of these changes feel like a mixture of fast-forwarding trends from the past and new developments emerging from the soil of current changes.

The ongoing acceleration of these trends has been felt in the establishment of diverse communication methods that utilize digital technology, the realization of telecommuting and other home-based workstyles, remote medicine, online diagnosis, and many other examples. While many of these developments had been discussed as concepts for some time, most of them had not yet become mainstream practices in our world. At-home work, for example, was a popular topic in the bubble era, as exemplified by the widespread debate on the efficacy of satellite offices and the 1991 founding of the Japan Satellite Office Association, the precursor of today’s Japan Telework Association. However, as we all know, these initially envisioned changes never came to be, due to the expansion of large-scale offices in major cities and the heavy concentration of business functions in those same cities.

An Upward Spiral of Accelerating Digitalization

Up to now, when innovative technologies, products, and services have come on the scene, their expansion has followed a process in which trailblazing companies and novelty-seeking consumers known as “innovators” and “early adopters” are the first to utilize them, after which the technologies gradually spread through society, establish a majority, and ultimately spur the formation of new cultures and systems.

By contrast, in the Covid-19 pandemic, people’s lives, work, and movements have been abruptly restricted. This has forced companies and individuals to adapt to life and work styles dependent on digital technology regardless of their preferences, and, in the process, it has changed cultures and individual minds. This transformation is characterized by changes in the sequence of events by which innovations become established, and by the emergence of an upward spiral phenomenon of accelerating digitalization.

However, it must also be noted that the rapid spread of these new technologies has made it hard for social and corporate rules to keep up with the changing times in their pursuit of more efficient functioning, which, in turn, has demanded even more investment in technology. In the Covid-19 pandemic, most economic and social activity has shifted to online spaces, and the digital revolution has continued its irreversible progress alongside technological advances like 5G. Nonetheless, it remains unclear exactly what benefits these changes will create for human society.

The Leaders Demanded by the Coming Era

What type of leadership is required in such a new era? As the twin waves of “accelerating change from past paradigms” and “new changes resulting from digitalization” crash onto the shores of the present, and as the suddenness of the pandemic forces us to confront the limits of human power, our society is faced with increasing uncertainty and anxiety about its future.

The collapse of business models whose operations had depended on the 3Cs (closed spaces, crowded places, and close-contact settings, which are coronavirus transmission risk factors), and the assumption of the spotlight and the starring role in value chains by new services that enable alternatives to the 3Cs, are already underway in many industries and professions. It is essential that leaders assess the impact these waves of change are having on their companies, and work proactively to ensure that no business opportunities are lost.

There has been much discussion of what predictions we can make about the world after Covid-19. However, the role of a leader is not to respond passively to possible futures, but to work actively to determine how to respond to the challenges posed by this major transformation period, and how then to build a desirable future.

We are already witnessing the expansion of telework, with its numerous attendant transformations in work style, employment system innovations, and the like. In addition, digital technology utilization and accompanying rule changes can be expected to move forward, through the repetition of regulatory easing and pilot testing, in public service fields such as education and medicine, where the pandemic has exposed lagging digital adaptation. At the same time, we can expect the future to bring increasing social instability, with the limits of economic distress policy expenditure and rising geopolitical risks caused by anti-globalization nationalism creating a high probability of difficulty and confusion.

In preparation for this very likely future, leaders will need to formulate multiple response scenarios and prepare thoroughly to ensure that they do not succumb to erratic or ill-considered reactions. Further, to maximize the effects of whatever scenarios are selected, it will be necessary to identify what sort of organizational reforms and changes in member actions are needed, and to discover and deal with potential obstacles.

How can we make up for the lagging digitalization that has been laid bare by the current crisis? The foundations of post-corona growth for this uncertain future will lie in our bold and proactive development of infrastructures that enable sound decision-making, and our investment in talent development to promote these innovations. The quality of leadership will undoubtedly have a significant impact on the future of society and of organizations in the coming era. At this critical moment, the importance of leadership is making itself felt in the world once again.

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