New Normal: A Shock to the System with Saku Mantere

Episode 6 of The ‘New Normal’ hosted by Dave Kaufman: New Normal: A Shock to the System with Saku Mantere
Dave Kaufman – host: When the COVID-19 pandemic began to spread across our world, some businesses adapted better than others. What was at first viewed as a temporary adjustment to our daily routines has developed a sense of near permanence, and leaves many questions about what this shift means for the future. From the classroom to the boardroom, COVID has changed how we interact with the world, and has impacted our expectations for what lies ahead. How have we adapted? And are we ready for what tomorrow brings?
Dave Kaufman – host: Welcome to The New Normal, the podcast exploring management research, brought to you by Delve, the official thought leadership publication of McGill University Desautels Faculty of Management. I’m your host, Dave Kaufman. On this episode of The New Normal, Professor Saku Mantere from the Desautels Faculty of Management at McGill University discusses how organizations have responded and adapted to the COVID-19 pandemic. Whether universities, governments, or businesses, many responded to the crisis by adapting quickly, and performing beyond expectations. Why are some organizations at their best when facing a problem, while others flag? Professor Mantere also addresses the effects of Zoom, and the lack of physical classrooms and workspaces on organizations, innovation processes, and the future of management in an even more rapidly changing world.
Dave Kaufman – host: Mantere is a professor of strategy and organization at the Desautels Faculty of Management at McGill University, and Director of the Marcel Desautels Institute for Integrated Management. His research focuses on strategic organizations and organizational change. Mantere is also the inaugural Editor in Chief of Delve, the thought leadership platform that hosts this podcast.
Dave Kaufman – host: In the spring of 2020, you published an article on the website about the positive changes that could potentially arise from the massive shift that the COVID-19 pandemic would bring upon our world. In the nearly 15 months since, our world has changed so much more than any of us could have imagined, yet the major economic collapse that so many were predicting didn’t quite pan out the way that people had feared.
Saku Mantere: It’s been kind of miraculous how well the world system, in a certain sense, has been able to take this type of disruption. But I guess what I really wrote in the article was this model that organizations are funny, that when they’re shocked, many of them actually start performing much better than they do normally. So the shock to the system awakens them and helps them focus on the essential. McGill, our organization, handled it marvelously. So in two weeks we got the tools together and instruction on how to use it, and we finished the winter semester with relatively little disruption. And universities, they’re normally not that great in adopting, because they are organizations that have been around for a long time, and they don’t change at the easiest triggers, they need quite a bit. So even a frumpy old organization with these peculiarities, they actually got their act together, we got our act together remarkably fast. So that was my main finding that I started seeing around me, that this kind of crisis, they’re also an opportunity for developing things.
Dave Kaufman – host: In your findings, were there certain kinds of organizations that you were surprised couldn’t adapt, versus others that rolled with the punches?
Saku Mantere: It seems that the type of business that an organization is in, that it’s not necessarily the greatest predictor for its capacity to change. The individual differences between organizations, at least to me they seem to be more significant there. And even to the extent that it seems that governments seem to be able to respond as well as businesses, in some cases, even though we expect governmental organizations, bureaucracies, to be slower in responding, but when they really have to, we see a lot of potential in those as well.
Dave Kaufman – host: There’s been criticism of organizations, including governments, that have been able to change in this time of crisis, when for years they’ve stalled on making certain changes. Sustainability and social equity come to mind. Why is it that some organizations, including traditionally slow to change governments, are able to suddenly move fast and respond to change in a time of crisis, while others can’t?
Saku Mantere: Yeah, that’s a really fascinating question. It’s one of the few things that we really know about organizations, and that is that they tend to work well when there’s a crisis. So many, many organizations, of course there are those that don’t, and those organizations that don’t have resiliency, they might fail, but in most cases, organizations really are built to deal with crisis situations, and change tends to happen, and adjustment, learning tends to happen when people clearly see that there’s something to respond to. And things like climate change, for instance, or many of the grand challenges such as social equity that we know are important, they’re harder for organizations to adjust to because there isn’t a single problem. Climate change, it’s almost like all the problems of the world bundled up into one thing, we don’t know where to start. But with a thing like COVID, what has happened is that there is clearly something that we need to respond to, and then we have many, many organizations that are capable of responding. There’s people that give up their normal expectations of routines and comfort, and they get their act together. That’s what’s happened now.
Saku Mantere: The million dollar question is, how can we maintain such a sense of urgency with issues that are more complex? There’s a great, great comparison with, I don’t know if you remember, at the time when we used to be worried about the ozone layer. When I was growing up, we were all worried sick about the ozone layer, which admittedly still is something of an issue, but it’s nothing like climate change, and the ozone layer problem, actually, it was solved here in Montreal. There was a Montreal Protocol that was designed to work with the pre-owned gasses that were used in refrigerators and spray cans, and so on. So there was a limited number of chemical agents that were contributing to the destruction of the ozone layer, and the international community was able to handle that. But climate change is so much more complex. It’s not a single problem, it’s not a single issue where we can create this sense of urgency. That’s why many of these things are much, much more harder, even though we know that they are important.
Dave Kaufman – host: Would another example of that be a wartime mobilization, in the way that we saw much of the world mobilized, let’s say in the 2nd World War, where there was a definable good and bad side, did that make things easier to get on board with?
Saku Mantere: You know, there are people who say that aliens should invade so that the human race would get its act together. If we had a common enemy, then that urgency would get rid of the political deadlocks that we’re facing, and the lack of urgency around fixing the world’s issues. So I think the wartime example is perfect. I’ve also talked to managers who feel that in their organizations, people are actually, now that the crisis has in some cases passed and they have routinized practices that they’re able to employ, that the people are actually unwilling to go back to the old ways of managing, they want to maintain the crisis organizational structures because they’re so much more flexible and operational.
Dave Kaufman – host: I’m laughing, I’m picturing Independence Day, the Will Smith movie. Do you remember that?
Saku Mantere: Yeah, absolutely. So the US president ceases to be a politician and becomes a fighter pilot that leads the fleet. It’s so funny, actually, I think that’s a great analogy, because there what happens is that the US president becomes a military leader, Bill Pullman, I believe was the name of the actor, he transforms from having to deal with Congress and the Senate and filibusters, and whatever you see in politics, and he can pilot the plane and shoot the aliens. So the wartime analogy is a really good one.
Dave Kaufman – host: One thing I think is really interesting is the idea that we’re all inherently experiencing a recency bias. And we may not view COVID months or years from now with the same intensity that we’re feeling in the midst of while we’re living it. Do you think, with that in mind, that two years from now, five years from now, will we go back to a lot of our old habits? For example, let’s look at open office plans. In the winter of 2020, when American billionaire Michael Bloomberg was running for president, he said that one of his first acts if elected would be to convert the West Wing into an open concept office. That school of thought, which had been so popular just over a year ago, was that the days of closing your office door and going into your own space should be gone forever.
Saku Mantere: Yeah, so that’s true, we don’t really know how much this will affect people’s attitudes towards social proximity and infection, and these kinds of things. Obviously COVID isn’t the only disease that’s ever going to hit the human race, so there’s going to be others, and there are regular infections that also are spreading through social proximity. So that’s one thing, so will we be more cautious around the possibility of infection? Will this affect our willingness to be close to each other at the office? I think there’s a broader question then about the role of physical space for organizing, or the capacity of organizations to coordinate work.
Dave Kaufman – host: In the past, new communication technologies have certainly changed work and the workplace, and before the COVID pandemic, we were already inundated with apps that purported to help us do our work much more efficiently. Do you see Zoom and other tools for working at a distance as a stop gap measure? Or have they been used enough in the past year and a half that workplaces might not abandon them in the post COVID world?
Saku Mantere: So I do believe that Zoom is here to stay. As an organizational theorist I do believe that now that people have had to learn it, and it’s so much more convenient to work from a distance, I do believe that, for instance, travel will be affected by this. We used to travel to go to meetings, sometimes on an airplane, and I would believe that just for cost saving reasons, as well as people’s convenience, many, many things will be done over Zoom.
Saku Mantere: I also believe that people will continue working from home. This will be affecting the office infrastructure. I am really curious to see what will happen with the downtown areas, where people used to commute to, to go to work, how exactly, and as I’ve said elsewhere, there are practices and processes in work where being in the same space, being able to wander into a colleague’s office, that is helpful. I’m reminded of what Lisa Cohen was speaking, in her episode about working from home, so it’s an interesting balance, how much people will be wanting to go back to the office. Say that you have a family, you have children at home, your private space is invaded by Zoom, so I don’t think it’s a simple picture, but I do certainly think that this has been a decisive step that will affect the way that we work and how we manage.
Dave Kaufman – host: So the broader question, then, is whether innovation will be able to flourish when we have to adjust how we interact with our colleagues and collaborators?
Saku Mantere: We have organizations in this world because they’re effective means of coordinating work between several individuals, and one coordination mechanism is physical proximity. So when we see each other and we can talk to each other freely, communication flows, and we are able to adjust and adapt our activities to problem solve, and do all these wonderful things that happen when you’re in the same space with your colleagues. And this is something that has been removed from the equation. I’m often wondering, for instance, what’s happening to innovation processes. So the early part of innovation process where you’re supposed to come up with new stuff together with teams, so how well has Zoom and these other devices actually yielded itself to that kind of work?
Dave Kaufman – host: Speaking of Zoom, do you think we’re all Zoomed out, or do its benefits outweigh its more negative aspects?
Saku Mantere: I am amazed at how well it functions, and just the fact that I can teach. I took on extra teaching last winter because I just found that it was so easy to do and I wanted to explore it. So I, for instance, taught an MBA, a masters of business administration course, to Japan, where my students were 14 hours in a different time zone. It just works, so I can be wherever I want to be in the world.
Dave Kaufman – host: That you can be in Canada and teach a class in Japan really speaks to one of the most interesting facets of this pandemic, which is that in many ways never have we been more isolated, but also never have we been as accessible.
Saku Mantere: Yeah, so that is one thing, what this accessible really means, so I think one thing that’s harder is that we tend to book meetings for everything. We have to always book a meeting. So I can’t wander into my colleagues office to figure something out. As a professor we’re pretty hermetic anyway, so we don’t do that so much, but I think in many real life organizations, you’re a journalist, for instance, in that setting, when you’re working on a story you end up talking to people a lot during the day, right?
Dave Kaufman – host: For sure. Or knocking on a colleague’s door to run something by them is something I haven’t done in well over a year, and I do think that in some ways that made me a better journalist, or at least made the journalism I was producing better, when I had that fresh pair of eyes or ears to play devil’s advocate with something. Now that requires a lot more formality.
Saku Mantere: Yeah, so it seems a part of the technology that we have to set up these meetings, and our days, they become this patchwork of Zoom meetings, rather than what we used to have, which was more of a continuous flow from encounter to encounter. This fluidity, I do think that with many types of work, a lot of coordination happens pretty naturally in that way. And there is this age old management technique called management by walking around, which I think is time honored, and it’s highly effective. So if you’re a manager, just take a walk and see what people are doing, engage with them. And when you can’t do that, so how do you walk around in Zoom?
Dave Kaufman – host: You can’t. In so many ways, doesn’t it feel all much more rigid and wooden now than it was pre-pandemic?
Saku Mantere: Yeah, sure. And that’s, of course, one aspect. But what I was really getting at is that really these types of subtle continuous interactions where you’re able to, whenever you have a problem, like you said that you wanted to run something by your boss, then you can just go on and knock on the boss’s door, or talk to colleagues. For instance, I’m doing research, and the guy in the next office, I have a new argument that pops into my head, I just talk to the guy in the next office and ask him, “What do you think of this idea that I have?” Sometimes he’s irritated by me breaking his flow, but other times we have a great conversation, and at least do something.
Saku Mantere: But the threshold of me for actually booking a Zoom meeting is much higher, and that’s the role that these spaces, physical spaces, and I think Michael Bloomberg that you mentioned, promising to turn the White House into a burolandschaft, they used to call these open offices, I think the idea there is that people would coordinate and communicate and innovate more freely if they’re not locked in their own little cells.
Dave Kaufman – host: And yet many workers in workplaces have adapted very well. Stocks have surged, employees have been hired, and like you said, people have adjusted.
Saku Mantere: Yeah, I think it’s fair to say, I’m always a bit hesitant because I feel that I am in a pretty fortunate position myself. I’m a university professor, and our work was really not interrupted that much. So I’ve had a pretty safe year, from that perspective, and I do know that there are groups of people, groups of professions, that faced a lot harder times. My musician friends, who’ve basically been robbed of their livelihood and have to subsist on government aid, basically. We have to be a bit careful on saying how well we have done, but I would fully agree with you that a lot of things have worked remarkably well, and we have adjusted. And I think it says something about the experience of working in an organization, that organizations, for some reason they tend to be at their best when there’s a problem. Everybody recognizes that, okay, we have a problem. So then thinking about organizations and bureaucracy changes radically.
Dave Kaufman – host: If organizations work best when there’s a problem, how has the COVID problem made some organizations better, such as retail, or e-commerce, while others still seem to be scrambling and waiting to return to work as it was pre pandemic, such as hotels. Did some not see the opportunity in the problem, or were they never set up to take advantage of it in the first place?
Saku Mantere: So again, I’m reminded of Lisa Cohen’s episode where she talks about this friend of hers who was an event organizer in the arts, and how her work had shifted, and she’d innovated these new ways of working. This question depends on how much has your work actually been, for instance, forbidden. I know a lot of musicians whose gigs have vanished. They didn’t find ways of doing their work differently. Obviously musicians have then worked through Zoom, and they’ve had outdoor concerts, and whatever. But still, if your work is really, to a great extent, just stopped by governmental regulation, so we have to understand that sometimes change is not possible, or at least it’s so difficult that we can’t really expect organizations to adjust.
Saku Mantere: So let’s just say that there are differences between organizations in their responses in context where they actually could change, that change would have been possible. Why did some organizations manage to innovate their activities? So it’s very, very difficult for me for a hotel to adjust, I can’t imagine what a hotel could have done, but restaurants, I think there’s variance between them. For instance, there was a Finnish Michelin star restaurant that immediately started providing takeout sushi, high-end takeout sushi. They had one chef that had been trained, that chef trained everybody else, they were a high end player, so everybody was super proficient, so they were able to do this, while other restaurants just weren’t. So there are differences here.
Dave Kaufman – host: You’re seeing firsthand how the university is adapting as an organization, both before and during the pandemic. How has the shift to online teaching, for example, illuminated any gaps between a university education, especially in business and management, and the realities of the working world today?
Saku Mantere: Well, I think COVID probably has underscored a phenomenon that has been there for quite some time already. And to explain this, I have to go back to my own university days when I was doing my university degrees, my undergrad, that was scary enough, that was like 20 years ago, or even more, sorry to say. During that, it seems like yesterday, but actually I do realize that our whole outlook on what we were doing was very, very different. So entrepreneurship, for instance, which was spoken about then, was not nearly the type of thing that it is today. So we used to study in order to get jobs in big corporations, perhaps in consultancies, perhaps in governmental service for some of us, but really we were studying to get a job in an organization, and have a career in an organization.
Saku Mantere: The future of work that we’re seeing now is actually seeing these big organizations dramatically shift. For instance, we have these gigantic behemoths, like Facebook or Uber, or the platform economy, gigantic organizations that actually don’t hire that many people. So work is shifting, it’s shifting into a mode or a path to figure out how you create value, what is your path going to be, rather than being provided that path by the HR of a large corporation. And I think this is something that the students are facing. Obviously there are COVID related disruptions in the labor market, which also will complicate things, but I would still say that it’s part of a bigger transition that universities have to deal with, which is that we can’t train students for ready-made careers anymore.
Dave Kaufman – host: Has this shift changed over the last 20 to 30 years?
Saku Mantere: I think that the pace of change has escalated, or it has accelerated. I was doing my undergrad in the 90s. Still, compared to the 70s, I don’t think the expectations were that different from those who studied in the 70s. So there were big corporations, there were ready-made career paths, retirement still seemed like the kind of thing that you do when you’re 65, you stop working and become a retiree.
Dave Kaufman – host: Many don’t want to retire at 65 anymore, now 65 seems so young.
Saku Mantere: All of this has been radically changed for what I see now. Of course there are still students who study in the bachelor of commerce program and they want to work for JP Morgan, or Goldman Sachs, or McKinsey, or whatever, and there are these blue chip career paths that people dream about. But there are people who do the degree to address some problem in the world, or pursue some personal sense of purpose that they have, and I think these are really the kids that we should be learning from.
Dave Kaufman – host: It won’t be long before those current graduates are leaders in the future workforce. When they are, we’ll have a front row seat to this exciting new moment in time, and only then will we see how the pandemic has truly affected their careers, and how it shifts the way they look at work. Stay tuned as we navigate this new normal together.