The opening of Charles Dickens’ classic, A Tale of Two Cities, best explains current economic prospects for many different industries: “It was the best of times, it was the worst of times; it was the spring of hope, it was the winter of despair.”
There is no doubt the global COVID-19 crisis is one of the most pivotal moments many businesses have ever faced: some won’t survive, some will take a long time to return to their glory days, some will rebound relatively quickly and a few will thrive. But, one thing is certain: “this too shall pass.” And when it does, historians will try to put this in perspective, whereas we prefer to look to the future, specifically at recruitment for MBA graduates who will enter the job market in ’21 and ’22. We think there are two main factors which will impact each industry for the next couple of years and determine if it will be either the best or worst of times:
- GROWTH IN CONSUMER DEMAND
Alignment with changing consumption dynamics: New consumption patterns will emerge post COVID-19. Some of the common ones noted by experts include increase in “work from home” professionals, habit formation for online products and services, more emphasis on personal hygiene, increased demand for medical diagnostic products, etc.
Government aid: As most of us change our behaviour, we expect governments will also reallocate resources. This will lead to increased focus on medical research and innovation, building medical infrastructure, de-risking supply chains, and tracking citizen behaviour, among others. This re-allocation will build demand for associated industries.
Rise of DIY (Do It Yourself): While consumer behaviour will change across different parameters, there is one aspect that will lead to new business models and hence new products and services. We call this the DIY model. During lockdown in most parts of the world, consumers have learned or rediscovered the art of self-sufficiency. A lot of businesses can align with this trend. So, movie watching will be more at home than in neighbourhood multiplexes (more Netflix, less movie theatres). Similarly, more food will be cooked at home or ordered-in than eaten outside (more Grubhub and DoorDash, less Olive Garden). Also, one can imagine that when travel comes back, it will be more to solitary outdoor nature resorts than to crowded tourist destinations (more Yosemite and Yellowstone, less Eiffel Tower).
- FIXED VS. FLEXIBLE SUPPLY
Fixed cost elasticity: We define elasticity of fixed costs as the ability to lower fixed costs temporarily in reaction to steep decline in revenue. Certain industries with high fixed costs (airlines, hotels, oil & gas, etc.) will find it very difficult to adjust and certain others (like top-tier consulting firms who have a large part of fixed costs as salary) can shift resources relatively quickly to meet changing demand.
Supply chain flexibility: Supply chains are being disrupted every day and industries which can’t adjust their supply chains fast enough (automotive, electronic equipment, etc.) will face a more sustained downturn.
People skills: Similarly industries that rely on professional skills which are specialized and fixed (nurses, chefs, truck drivers, etc.) will be impacted hardest by any change in demand dynamics and industries where skills can be retrained or redeployed will find it easier to cope (sales & marketing, consulting, coding, etc.)
Based on these two factors we have developed three zones for major industries which recruit MBA graduates.
So, what does this mean for MBA hopefuls who will graduate in the next few years? Hard and soft business skills will be more important than ever to industries in the “green” and “amber” zones. If you are applying to business school now, showcasing the following skills will be critical:
- Managing under cost constraints; helping conventional industries go digital; and understanding consumer motivations and developing products accordingly.
- Developing new supply chains; negotiating win-win deals and partnerships; and showing evidence of resilience in face of tough challenges.
- Leading with purpose and building a realistic vision of the future; able to maintain calm and think clearly on one’s feet; empathy for clients and colleagues; ability to effectively manage teams virtually.
If you’re uncertain how to position yourself to Adcoms and demonstrate that you are prepared for what the post-COVID-19 job market holds, contact us, we can help.
In summary, we encourage MBA applicants to think through what the future may look like and their place in it. If you’re still unsure and anxious how your past, present, and future may be best positioned in pursuing your MBA dreams, request a free evaluation of your candidacy.
As we mentioned in our last blog post: During this time of COVID-19, you may be physically isolated, but you don’t have to travel your MBA admissions path alone.