TALKING
‘‘ business
As we edge closer to a post-pandemic world , with the vaccine rollout underway and the end of restrictions in the crosshairs , we ’ re left to wonder what will really change for the long term after this profound shock to the system . the opposite . We need to look beyond simplistic P & L to consider the entire balance sheet of a company , and of the wider economy , to deliver long-term business value .
Jarrod McGrath , author of The Digital Workforce and CEO , Smart WFM
Even though we ’ re not sure of the full extent , a few things are certain . International travel won ’ t quickly return to its pre-pandemic heights , with the workforce enjoying more quality time at home and realizing the unnecessary nature of many trips . The workplace will change for good – some will work from wherever forever , others will get a hybrid mix and some will just go back to normal .
Top of my wish list as we hit refresh on how we work , the economy , technology and our overall way of life , is ridding ourselves of the profit and loss or ‘ P & L mindset ’, which I believe has undermined the true value of businesses and people across the globe .
The P & L race to the bottom
We see this mindset creep in and cause tunnel vision : underpayment issues which continue to plague major businesses and government organizations . Industrial relations disputes . Environmental neglect in place of short-term gain . Mass offshoring of roles to countries with cheaper labour and higher turnover .
Balance sheets take it all into account – the assets , equities , liabilities , commitments , and – the big one – people .
Examining one of the points above , offshoring , we can clearly see the P & L mindset at play . Over recent years and decades , many businesses including banks , telcos and manufacturers made decisions to offshore some , or in some cases all , staff .
From the CEO ’ s position , it ’ s a very understandable decision to make . Countries with high wages simply can ’ t compete on this P & L-driven metric . Consultants are brought in , decisions are made , redundancies occur , CEOs get bonuses and new call centers or factories are built abroad .
One group likely to benefit from this , at least in the short-term , had been the shareholder , as the move begets quick profits .
Enter COVID .
A recent study also showed automation could cut 1.5 million jobs from Australia alone , with bookkeepers , accountants , human resources staff , office clerks and middle management roles heading for the chopping block in the near term .
These are the kinds of sacrifices and risks we permit for the P & L mindset . People – who actually enable businesses to succeed – are often the ones to suffer .
No , this is not my pitch to ditch capitalism or try to stop innovation and digital disruption in its tracks – it ’ s quite
The pandemic suddenly made offshore facilities , particularly call centers , redundant .
When P & L is put above all else
What impact would this have on staff ? On customer service ? The economy and society as a whole ? What is the long-term implication for shareholders ? What would happen in the event of a pandemic or another global emergency ( yes , there was ample awareness of this before the current crisis and more business leaders should have factored it in )?
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