CDO, CPO, IAPP, Information Management and Governance, Information protection, Privacy

Looking Ahead: The New Operating Model for Business

COVID-19 has had a horribly disruptive effect on almost all people and aspects of society.  This paper starts a dialog around an admittedly tiny aspect of that and a view to the future.  It in no way should be seen to marginalize or trivialize the pain and suffering endured by the millions of people directly impacted by the pandemic.

On May 1st, CNBC published this article that discusses how some businesses are re-evaluating their need for physical office space in light of their experience with a majority of their workforce working remotely.

The rapid shift to work-from-home has served as a catalyst for change.  Many years ago, when video conferencing first became available, companies started to invest in equipment that was office-bound, hoping to reduce business travel. That never happened because the technology was temperamental, brands didn’t interoperate very well, there were never enough facilities, and the equipment required expensive point-to-point T1 lines.

Since then, there were advances in the technology along many orientations, including high speed internet to homes, corporate adoption of laptops, smartphones, and importantly, audio conferencing.  This enabled a shift toward work-from-home, and corporate shared office space – “hoteling” (universally adopted by consulting firms and hated by employees), smaller offices/cubicles sold euphemistically as “open concept” workspaces.  But many were still reluctant to use video (Dilbert summed it up well with a series of comics depicting people “working from home” taking video calls wearing their bathrobes).  Workers were far more comfortable with audio conferencing than video, but it still did a lot to get companies and workers more used to remote working.

The needle moved further toward remote workforce with the dramatic increase in off-shoring, leverage of contractors which in itself lessened the feeling of permanence of employment, and perhaps contributed to workers feeling more comfortable as individual contributors working from anywhere.  Paradoxically, there was a simultaneous shift toward urban living, as the number of young people wanting to drive or commute went down, which one might have thought would shift them back to offices.

Powerful Disruptor

All these shifts were gradual, and the net result was tidal shifts in the work model.  Leave it to nature to provide a dramatic disruption, which has resulted in remote working suddenly accounting for 95+% of non-essential workers.  The points raised in the CNBC article are not at all surprising, given how the experts are bracing for periodic reemergence of Corona, but are also supported by:

  • The high cost of commercial real estate and the need to manage costs
  • The remarkable advances in technology enabling remote working
  • The quality of life impact of time-wasting commutes

A shift to predominantly remote working has immediate benefits, including the opportunity to hire the most qualified workers without regard to their physical location, which helps address challenges businesses have faced hiring the right talent.  It also has consequences, such as the inevitable glut of empty office space.  The sudden reduction in the concentration of office workers has a significant impact to businesses relying on them – restaurants, shops, laundry, shoe-shine, even metropolitan transportation – as large portions of their customers stop coming.

Opportunities

In the past, there have been dramatic disruption to business leading to the shrinkage or elimination of entire industries.  Yet over time, business comes charging back.  Before Corona, unemployment was at record lows, and companies were clamoring for skilled workers.  This is after gloomy predictions of unemployment after waves of off-shoring everything from manufacturing to call centers to highly skilled workers.

What has to happen for remote working to become as effective as working from a managed location?

Physical space: Many people don’t have home offices and take over the dining room table instead.  This isn’t sustainable, since asking people to shift from a company managed location to home involves a level of disruption and the only financial beneficiary is the employer.   Wouldn’t it make more sense for the employer to provide each employee a remodeling budget (funded by savings resulting from reduced commercial real estate costs)?  Small contractors could build-out home offices based on guidelines or specifications defined by the employer.

Technology infrastructure: When someone works in an office, the employer provides a laptop and a portfolio of business applications, but also the infrastructure to provide access to those applications – physical connectivity, wi-fi, deskside support.  They establish standards that they are able to support in a cost-effective fashion.  This needs to be replicated in some fashion at home, at least for a portion of the workforce.  It’s not realistic to expect the worker to solve all their home technology issues and not impact their efficiency.  Solution?  A ramp-up of home technology service-providers (e.g., Geek Squad) who set up and support home offices.

Improved wireless: There is a race underway to roll out 5G infrastructure and public wi-fi 6 that promise high-speed performance that rivals (or beats) home-based/cable internet access.  This may be a boon for remote workers and their employers because it simplifies the support model by eliminating the so-called “last mile” connectivity to the individual house in favor of a more controlled infrastructure using transmitters on towers in public spaces.

Comforts and conveniences: As people get used to working remotely, their appetite for convenience goods and services will likely return.  This means the retail services that had been located near office buildings will cater to home-based workers.  To be sure, it won’t look the same, given that the density of customers is different.  There will be more home delivery or curbside service.  Will it be the same in terms of volume?  Probably in an overall sense, but the concentration will differ.  But it seems reasonable that the businesses that can cater to distributed remote workers will benefit.

Challenges – Privacy and Data Protection – a tiny slice

There is no doubt that as with any fundamental disrupter, there will be challenges to be met before we move to equilibrium – the so called “new normal”.  Among many others, information protection and privacy faces challenges.  Some years ago, a colleague authored a prescient paper entitled “Privacy in a Pandemic” that explored the reasonable tradeoffs to be made when balancing individual rights against the needs of society, famously captured by Spock as he sacrificed himself believing “the needs of the many outweigh the needs of the few… or the one”.  But the new equilibrium has implications for privacy and data protection in a more corporate setting.  While privacy regulation accommodate these priorities, privacy and data protection programs will have to re-calibrate their risk assessments and place new weight on risks made more prominent by the shift away from office-based workers, to one where the line between personal life and professional activity is blurred to the point where you can hardly tell the difference.  Clear desk policies went from being a constant real and philosophical debate to now being completely unenforceable, and therefore mostly moot.  Implementing sound technical controls that don’t disproportionately interfere with the ability to work will take time, and likely require new technology deployments.

Understanding purpose: A key enabler to pivoting data privacy will be a mature data governance program.  Making assumptions around higher level enterprise controls is no longer safe.  Instead, knowing the nature and location of data is far more important in order to protect while enabling use.  Providing more discrete permissions around the use of data will help lessen the risk of loss and unauthorized disclosure.  Understanding the purpose behind proposed use of data will enable assigning more discrete permissions.  Since preserving privacy is a lot more than just ensuring protection, the philosophy of understanding purpose also helps ensure appropriate use of data.

Fundamentals: Implementing new controls will take time and carries the risk of creating more frustration and confusion that benefit until the edges are smoothed out.  Privacy leaders should step back and consider the full breadth of their programs, leveraging all techniques to manage risk while avoiding unnecessary disruption.   An effective awareness program, for example, can go a long way to encouraging people to make safe decisions when handling data.

Summary

COVID-19 has created havoc in unprecedented ways, and has affected the lives of billions of people.  The human toll cannot be measured, and the suffering by so many should not be swept aside.  Experts are working through the optimal medical strategies while economists are still trying to model the short, medium and long term impacts to business.  Entire books will be written and college classes will be structured around the Coronavirus pandemic.  This paper has taken a very narrow slice of that and will hopefully start an open-minded dialog around how to help enable the future operating model for business.  The dialog can and will continue in months and years to come.

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