Still, company after company is finding ways to innovate. Carlyle’s Thomas calls it breaking “path dependency”—the tendency to do things a certain way because they’ve always been done that way.
Thomas gets a firsthand look at this by peering into the 267 companies in the private equity firm’s portfolio. Revenue per worker has increased more than 12% and operating margins are up 24% from before the pandemic, he said.
'Whole New Level'
Along with labor shortages, much of the innovation, especially in service industries, stemmed from the need to meet the demands of customers while protecting them from infection risk.
Think of the yoga studio that went mostly virtual. It required investment in technology—software, cameras, microphones and large screens. Once all of that was in place, the number of people who could drop in for a class was no longer limited by the studio’s size.
Or take Kyocera SGS Tech Hub, a maker of sophisticated cutting tools in Danville, Virginia. Workers there have adjusted shifts to reduce contact. But the biggest change, said Jason Wells, its president, is the way the pandemic increased communication—putting employees in closer contact with each other and with suppliers, which helped them solve problems faster.
“This situation added a whole new level of communication, connection, and honestly, efficiency to our organization that did not exist prior to the pandemic,” said Wells. “I am not saying we may not have gotten there eventually. But necessity is the mother of all great invention.”
'Every Intention'
Technological adaptation is never instant or smooth, which is why the question of whether the pandemic boosted productivity won’t be answered for a long while.
At ChartSpan, the remote-work pilot program failed initially to deliver the expected “major lift” in productivity and client satisfaction, said Meredith Oh, vice president of operations.
Some of the problems were unexpected—the biggest one, early on, was dogs barking during calls with patients—and there were broader shortfalls in technology and training, which were addressed when ChartSpan staff had to abandon their office cubicles as the pandemic escalated.
“We went remote with every intention of coming back,” said Oh. But as costs plunged, employee satisfaction rose, and output increased, they never did. Instead they began to ask themselves why they were all sitting in cubicles in Greenville in the first place.
“I’m amused by all the folks who say we are going to return to normal,” Carter said. “This is the new normal. This is how we are going to work.”
—With assistance from Olivia Rockeman.
This article was provided by Bloomberg News.