McKinsey: COVID-19’s effect on SMEs in the US
Noting a large rise in unemployment figures...
McKinsey has released a new report examining the economic impact of COVID-19 on small businesses in the US.
Noting a large rise in unemployment figures since lockdown measures were introduced in March, the consultancy company projects that as many as 33% of jobs may still be vulnerable, despite ongoing discussions about reopening the economy.
The strain is palpable for all enterprises, but McKinsey considers that SMEs (250 employees or fewer) are likely to face more arduous challenges - prior to the pandemic, they accounted for almost 50% of all private-sector jobs and now represent 54% of the most vulnerable.
The lower the staff size, the more vulnerable
The report found that approximately 50% of jobs within the smaller SMEs (99 employees or less) could be considered at risk, compared with 44% for those with 100-499 employees and 40% for 500.
According to this trend, the larger a company is the safer it is, and vice versa. “Two occupational categories—food service and customer service and sales—account for more than four in ten vulnerable small-business jobs,” added McKinsey.
There is a strong possibility, therefore, that the people most likely to reap the negative consequences will be those less able to weather them, such as lower wage or unskilled workers, the report reasons.
The solution: recognise the value of small businesses
The problem identified by McKinsey is not limited to any particular state or region of the US; Eastern (New York, Pennsylvania and Florida), Mid West (Illinois and Ohio), Southern (Texas) and West Coast (California) states have 1mn to 3.3mn jobs at risk each.
With small businesses representing such a large demographic, it is, therefore, imperative that sufficient investments are made to ensure their survival.
“Small businesses are a recognized proving ground for entrepreneurs, a vibrant source of innovation and competition, and an essential source of employment,” the report states.
“They are suppliers and customers to the broader economy and deeply embedded in local communities.”
In a previous article, Business Chief explored how Mastercard has created a five-year $250mn fund to alleviate the financial struggles faced by SMEs, as well as offering cybersecurity solutions to bolster digital defences
“When our small businesses suffer our nation suffers, so it is incumbent upon all to ensure that we’re supporting the businesses who are the lifeblood of our economy and pillars of our communities,” said Michael Miebach, President of Mastercard.
“We are leveraging our network, insights, technology and partnerships to deliver the resources small business owners need now to help them sustain their business as they quickly adapt to a new way of operating and evolved customer needs.”
To read the full McKinsey report, please click here.
Marketing matters: from IBM to Kyndryl
Prior to joining Kyndryl as Chief Marketing Officer, Maria had a 25-year career at IBM, most recently as the tech giant’s CMO where she oversaw all marketing professionals and activities across North America, Canada and Latin America. She has held senior global marketing positions in a variety of disciplines and business units across IBM, most notably strategic initiatives in Smarter Cities and Watson Customer Engagement, as well as leading teams in services, business analytics, and mobile and industry solutions. She is known for her work with teams to leverage data, analytics and cloud technologies to build deeper engagements with customers and partners.
With a passion for marketing, business and people, and a recognized expert in data-driven marketing and brand engagement, Maria talks to Business Chief about her new role, her leadership style and what success means to her.
You've recently moved from IBM to Kyndryl, joining as CMO. Tell us about this exciting new role?
I’m Chief Marketing Officer for Kyndryl, the independent company that will be created following the separation from IBM of its Managed Infrastructure Services business, expected to occur by the end of 2021. My role is to plan, develop, and execute Kyndryl's marketing and advertising initiatives. This includes building a company culture and brand identity on which we base our marketing and advertising strategy.
We have an amazing opportunity ahead at Kyndryl to create a company brand that will stand apart in the market by leading with our people first. Once we are an independent company, each Kyndryl employee will advance the vital systems that power human progress. Our people are devoted, restless, empathetic, and anticipatory – key qualities needed as we build on existing customer relationships and cultivate new ones. Our people are at the heart of this business and I am deeply hopeful and excited for our future.
What experiences have helped prepare you for this new opportunity?
I’ve had a very rich and diverse career history at IBM that has lasted 25+ years. I started out in sales but landed explored opportunities at IBM in different roles, business units, geographies, and functions. Marketing and business are my passions and I landed on Marketing because it allowed me to utilize both my left and right brain, bringing together art and science. In college, I was no tonly a business major, but an art major. I love marketing because I can leverage my extensive knowledge of business, while also being able to think openly and creatively.
The opportunities I was given during my time at IBM and my natural curiosity have led me to the path I’m on now and there’s no better next career step than a once-in-a-lifetime-opportunity to help launch a company. The core of my role at Kyndryl is to create a culture centered on our people and growing up in my career at IBM has allowed me to see first-hand how to prioritize people and ensure they are at the heart of progress in everything Kyndryl will do.
How would you describe your leadership style?
I believe that people aren't your greatest assets, they are your only assets. My platform and background for leadership has always been grounded in authenticity to who I am and centered on diversity and inclusion. I immigrated to the US from Chile when I was 10 years old and so I know the power and beauty that comes from leaning into what makes you different from other people, and that's what I want every person in my marketing organization to feel – the value in bringing their most authentic self to work every day. The way our employees feel when they show up for themselves authentically is how they will also show up for our customers, and strong relationships drive growth.
I think this is especially true in light of a world forever changed by the pandemic. Living through such an unprecedented time has reinforced that we are all humans. We can't lead or care for one another without empathy and I think leaders everywhere have been reminded of this.
What’s the best leadership advice you’ve received?
When I was growing up as an immigrant in North Carolina, I often wanted to be just like everyone else. But my mother always told me: Be unique, be memorable – you have an authentic view and experience of the world that no one else will ever have, so don't try to be anyone else but you.
What does success look like to you?
I think the concept of success is multi-faceted. From a career perspective, being in a job where you're respected and appreciated, and where you can see how your contributions are providing value by motivating your teams to be better – that's success! From a personal perspective, there is no greater accomplishment than investing in the next generation. I love mentoring younger professionals – they are the future. I want my legacy as a leader to include providing value in work culture, but also in leaving a personal impact on the lives of professionals who will carry the workforce forward. Finding a position in life with a job and company that offers me a chance at all of that is what success looks like to me.
What advice would you give to your younger self just starting out in the industry?
I've always been a naturally curious person and it's easy for me to over-commit to projects that pique my interest. I've learned over years of practice how to manage that, so to my younger self I’d say… prioritize the things that are most important, and then become amazing at those things.