McKinsey boss says that after coronavirus nothing will be the same

30 March 2020 3 min. read
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McKinsey boss Kevin Sneader has weighed in on what he thinks the implications of the global coronavirus pandemic will be for the business world, stating that nothing will be the same.

Kevin Sneader, global managing partner of the world’s most prestigious management consulting firm McKinsey & Company, has shared his opinion that the world won’t be going back to back to normal once the coronavirus outbreak subsides. In an interview with CNBC, Sneader said in respect to what CEOs are presently worried about, “One thing is clear from all the conversations I’ve had: nothing is going to be the same. This is a new normal, a different way of operating.”

Previously, the firm has encouraged companies not to automatically assume a worst-case scenario, but Sneader acknowledges that the post-coronavirus economy will likely take another shape, including in the way investors will consider resilience and risk. “Investors are going to look differently, and CEOs are already looking differently,” Sneader said, appearing via video link on CNBC’s Swawk Box. “That’s why we’re not going back to the normal we had before.”

As to the immediate concerns being expressed by the consulting firm’s blue-chip clients, Sneader forwards that they’re worried about their employees, their customers, and cash – “in that order”, but doesn’t shy away from the fact that cash is a current major concern for many businesses in the current climate; “Even in the healthcare sector, there are providers who are not getting paid right now, and they’re worried about cash flow just as players in several other sectors are.”

Kevin Sneader - Global Managing Partner - McKinsey & Company

Still, despite assertions by the US president to the contrary, Sneader notes that one of the early lessons learnt in countries further along the transmission curve is that it’s naturally problematic bringing back a business in the absence of employees. To date, the almost universal advice from the world’s leading consulting firms is for businesses to address human resources as a very first step, with Alvarez & Marsal even making the case for enhanced executive compensation.

According to Sneader, businesses then are giving much thought to how they can maintain their employee-base. “We’re also seeing a lot of companies working very hard to figure out, ‘if our business isn’t busy, is there another one that is?’ We’ve seen a lot of recruiting start to go on because people need distribution warehouses, and logistics companies need people. So, I think the picture is a lot more nuanced than any sweeping statement as different sectors try to adjust.”

Sneader also pointed to a number of other potentially permanent shifts in terms of human resources and doing business brought about the current global shock – working from home being one prime example. “If you think about a lot of what’s happened in the last few years, some of it’s going to be reinforced. The shift [to working] online has now been given a boost, and it’s hard to see that being taken back to where it was before,” Sneader said in the interview.

Elsewhere, one of the biggest ramifications might be a retreat from globalisation, with businesses giving greater priority to supply-chain resilience over the current focus on efficiency. “We had books written about the ‘death of distance,’ which suggested it didn’t matter if things were far away. Now we understand what distance really means. When things are far away, a lot can happen between here and there. I think businesses are going to bring a lot back where they can control it.”