The Unintended Consequences of 2020
2020 is unprecedented territory for even the most seasoned experts, and the lasting effects of COVID-19 still remain to be seen. But nearly a year into the pandemic, there are a variety of unintended consequences that have been researched, analyzed and discussed in the media.
For instance, can you imagine eating at an all-you-can buffet restaurant in the future? Will those types of restaurants even exist following the pandemic?
What about handshakes? They have been a staple of American business culture for centuries. But will anyone really feel comfortable shaking hands with strangers anytime soon?
We leveraged the expertise of Fox faculty to provide insight into how aspects of the business landscape—specifically experiential business models, the restaurant industry, real estate and social interactions—have fared, and speculate on what the future might hold.
Catalyst is a podcast from Temple University’s Fox School of Business about the pivotal moments that shape business and the global economy. We interview experts and dig deep into today’s most pressing issues. Season two will answer questions like: How will COVID-19 impact my financial future? Why hasn’t the #MeToo movement reached the professional sports industry? And what makes a leader credible? We explore these questions so you can spark change in your work. Episodes are timely, provocative and designed to help you solve today’s biggest challenges. Subscribe today.
- After coronavirus, will the handshake go the way of the hat tip? (Philadelphia Inquirer piece with Ravi)
- In a Covid-19 world, what’s next for deluxe, all-you-can-eat buffets? (CNN.com piece with Lu Lu)
- Ravi Kudesia, assistant professor of human resource management
- Marilyn Anthony, assistant professor of strategic management
- Lu Lu, assistant professor of tourism and hospitality management
- David Wilk, assistant professor of finance
Host: The catalyst for this episode is 2020. Need I say more?
Welcome to Catalyst, the podcast of Temple University’s Fox School of Business. I’m your host, Tiffany Sumner. Soon, we’re going to say goodbye to 2020, a year that turned everything on its head: from the way we greet each other to how we eat to how we shop—even for our homes and apartments.
Today, we explore how the global pandemic has reshaped our business practices, traditions and social customs, from all-you-can-eat buffets to the simple handshake. I am joined by four fox faculty members who are subject matter experts in experiential businesses, the restaurant industry, real estate and social interactions.
In this episode, each of them share their thoughts on the unexpected consequences of this year and how our lives may forever be altered. Plus, they use their research expertise to predict what the future might hold.
First, I’d like to welcome Marilyn Anthony, assistant professor of strategic management.
Hi Marilyn, thank you for joining us today. I would love to hear about your role at the Fox School of Business and also what the catalyst was for your research on experiential entertainment?
Marilyn: Thanks Tiffany, I’m happy to be here. Really, the catalyst for my research is coming across a compelling story. I came across research by Leslie Simmons who found that although approximately 47% of MBA students are women, only 11% of business cases include women and only 4% of cases have women as protagonists. So that’s a pretty in your face challenge for a woman teaching in a business school in 2020.
I’ve written [00:02:00] two strategy cases recently warned about a woman’s founder-CEO, the other about a woman co-founder-CFO, and that case, Urban Axes, recently won awards in two case competitions. But I like to talk a little bit about that case and how it has led me to examine more widely the impact of experiential entertainment. So, if I can first let me tell you about Urban Axes. It was started by Krista Paton in Philadelphia in 2016. It was the first indoor axe-throwing enterprise in the U.S. Krista was happily working for Procter & Gamble in finance when she went to a birthday party at an axe throwing venue in Toronto where she was living at the time. Basically, it was so much fun but she was convinced it would be popular in Philly where she had lived for a number of years. With three male partners, she opened Urban Axes in Philadelphia in 2016. [00:03:00] Fast forward to 2020 where by January of this year, Urban Axes was operating in eight states with two pending additional locations. Then the pandemic hit.
Host: Yeah, I was going to ask, an experiential business, throwing axes and I’m sure others that require in-person participation—is that something we could translate to zoom? How has Urban Axes and potentially other businesses been impacted by the pandemic?
Marilyn: Well, I think it’s pretty easy to predict the implications for a business that’s built on bringing groups of people into close proximity in an indoor environment, it’s been catastrophic.
Urban Axes have pivoted and pivoted again. They’ve changed their pricing and their offerings about 15 times since reopening and compared to making two or three price adjustments in the previous years. The changes are in operations and pricing switching [00:04:00] from targeting large groups to now appealing to what Krista refers to as people’s “quarantine crew,” or pod, or even date nights. In a recent conversation with Krista, she shared that they’re operating eight businesses in eight different states with completely different sets of regulations and rules governing pandemic behaviors. That’s a pretty complicated way to run a business. she says you know cash flows has never mattered more and they are trying everything they can do to keep the business afloat but also, she’s happy about the fact that she feels that they’ve gotten so much love from their employees for basically just treating them like human beings, being understanding of their needs and supportive of them. but you know I was thinking about Urban axes and other similar businesses that are also experienced and so I talked to some other folks about that. Lily Cope [00:05:00] in Philadelphia was the original general manager for Urban Axes in Philly and most recently general manager for North Bowl, a venue that has a bar and restaurant, pool tables, video games, and bowling as the main draw. they’ve been able to reopen but only after really radically revamping their operation, so doing all kinds of things like requiring the people book online and give their shoe size in advance so their shoes can be at the lane so that minimizes any contact because of having bar service and food service dramatically scaling down their menus and pre-mixing batches of the most popular cocktails all to expedite service and all to be able to deliver that service with a skeleton crew, so it’s about keeping Revenue coming in while minimizing your overhead. but another kind of experiential [00:06:00] entertainment is something quite different, pottery classes and I spoke with Sandi Pierantozzi who’s the co-owner of neighborhood Potter’s she and her husband have been operating a pottery-making facility teaching pottery classes and running a pottery store for 20 years in the Fairmount neighborhood. They’ve had to suspend their classes but they have pivoted to enable them to still sell products online, they never had an online store before and have a new kind of window shopping where they have a sign in the window that says if you see something you want to take a picture of it and text us and we’ll sell it to you. so they’ve been able to actually keep the retail business afloat but their classes are the core and heart of their business and students are touching base with them regularly saying when can we come back and when I asked all of these entrepreneurs about their businesses and say what is it that’s driving [00:07:00] your customer support it’s always the same thing, it’s the need to connect with other people to do things in groups do things you can’t do in your home and that’s under normal times and now just more emphasis on how can we still be part of a group, how can we interact with people.
Host: What do you think will happen in the future when it comes to experiential entertainment?
Marilyn: So, this is what’s really interesting despite the fact that these women are all operating different types of businesses in different settings, each of them feels very positive about what will happen when people feel safe enough to participate again. you know Lily says we’re social beings and being around other people doing things actively with other people, we crave and so we think people will come back. Sandy knows that they will show their classes to her students who are repeat students. [00:08:00] This is like family and they can’t wait to be reunited. Another part that’s really interesting that Krista foresees is as corporations are restructuring the way they run their workplaces and probably bringing back fewer people into the office, she sees an opportunity for more corporate sponsorship and activity to enable their employees to come together in different environments and to that sort of team-building. and particularly Urban axes are located in geographies like Austin, Durham, Boston that have Google Facebook, Wayfair other tech companies that are doing quite well so they’re really poised for a strong recovery but you know on a larger perspective if we want to look even bigger the Philadelphia Business Journal just ran an article that Callaway golf equipment has acquired [00:09:00] TopGolf indoor golfing experience and Top Golf is based in Dallas this is about a Topgolf generated about 1.1 billion in 2019 and they’ve been growing at an annual compound rate of 30% so by Callaway acquiring Topgolf there now a 2.8 billion dollar enterprise. seems like they would not have made that investment at this time if they didn’t think indoor experiential entertainment was coming back in a big way.
Host: That is remarkably refreshing to hear Marilyn, thank you so much.
Marilyn: My pleasure.
Host: Now let’s shift from experiential businesses to the restaurant industry. Lu Lu, assistant professor of Tourism and Hospitality from the school of sport tourism and Hospitality management is here to tell us about the future of Buffets. Hi Lu, thank you so much for joining me today.
Lu: Hi Tiffany. [00:10:00]
Host: I guess it kind of goes without saying, restaurants and hospitality have been hit really hard by the pandemic but you’ve had some recent media hits including with CNN and other outlets focusing on restaurants with all-you-can-eat buffets, what do you see the future buffets, do you think they even have a future?
Lu: I would be very cautious to claim that there’s no future for us because currently we only have less than a year in the pandemic and the vaccine is also on the way. So, probably it is a better idea that we revisit you know, why buffet-style restaurants have been devastated the most because there are only restaurants too right? And if we look at the buffet-style I think the main problem is about self-service because a lot of times you have to share each other’s utensils, you have to wait in long lines so you have to come in touch with others in a very crowded space so that is the main problem but there are other buffets as well. [00:11:00] We have seen some places where they serve you at a table. You make an order or serve you in small portions where you don’t have to share each other’s utensils; you just take the small portions and small plates. Or other places, I believe other countries that have a conveyor belt, you can actually take it out, so I wouldn’t say that there is no tomorrow for buffet, it’s just temporary. It’s very important that we take these measures to make sure after this pandemic or in the midst of the pandemic we are making modifications to the way we serve customers to make sure they feel safe. So, I think amidst the pandemic and or as we work through that process, there must be modifications. But I think long term wise, I think there is still a future of buffets because thinking about that, a buffet has been [00:12:00] around for years. You know people love that. That excitement when you bring your family and there is endless food and that visual feast. I think that part is still a big job, so I would keep my view very positive.
Host: That’s great. Your research focuses on consumerism, food, and beverage discussion making, and dining behavior, obviously Covid has impacted all of these things. Moving forward, what tactics do you think buffet-style restaurants can use to encourage customers to dine there again?
Lu: So, I would say in the future when you are ready to welcome your customers back, first of all now I think the present issue is safety and health right? There concerns so first of all I think we have to make sure we clearly communicate with the customers of the safety practices and health practices you have been doing [00:13:00] to make sure they have the confidence to come back. Of course, before this minimum expectation is met, they are not going to come there just for fun. So, I would say I won’t be supposed out of the pandemic, that there will be a growing demand for professional cleaning and sanitation services so it might be a good idea that business owners start to think about increasing frequency or using professional services or having more reports that are available to the customer so it can ease the customer’s mind. I think that is the moment you start to really draw on the emotional appeal. The emotional and also the social appeal, and they remind customers what kind of experience you can offer because the problem right now, I don’t think is there is no demand. There is demand but it has been pent up quite a bit. The problem is the health and safety concerns [00:14:00] so you really have to ensure that it is healthy and safe. The next thing is yes, we are ready to bring out that old (inaudible 14:09) to you. So, at that point I think it’s maybe using your social media platform, using your old website and you know to really clearly spread the message out. And maybe one more thing, because nowadays we see things changing, like devices and even depending on the business, customers may respond differently. For example, we just talked about the (inaudible 14:35). It looks like they had a good opening, a good experience but also now you know, for example, they opened with table service but they had to shut it down because customers don’t like that old traditional style, right? So, I would say make sure you do some research and constantly monitor your group, what exactly they want. So, either you could do it formally or [00:15:00] informally right? Formally you do some collaborating with marketing firms, do your customer survey or in social media, and ask your customer’s opinion. What do they want? So, I think by all these collective efforts, it may help businesses monitor the process and just stay connected with your customers, don’t let them forget about you.
Host: Thanks, so much Lu. I’m disappointed that I won’t be going to Golden Corral anytime soon with mom and dad. Next, I’m excited to talk to David Welch, assistant professor of finance and director of the Fox School real estate program. Hi, David welcome to Catalyst, thank you for joining me today. Tell us a little bit about yourself and your work at The Fox School of Business.
David: Sure, about almost 3 years ago hard to believe I got The ultimate gift of my lifetime which was to be offered the opportunity to lead the real estate program at the Fox School of Business [00:16:00] having been in Academia for over 30 years I was always hoping that I would have a chance to be a professor and to have the type of impact that I love to have on students and the community-at-large in teaching real estate which believe it or not Tiffany is a relatively understudied subject area in many business schools But the great news is, it’s not at Fox and thanks to our Dean and our finance chair they really have a hundred percent support and energy behind our program which makes it a real treat to be involved.
Host: That’s really fantastic and so I’m sort of curious so right now we’re both talking and recording this podcast from home. even when the world returns back to normal and I say normal in air quotes because it’s likely that normal is going to be a little bit more remote or work from home will be a little bit more normal and then [00:17:00] what may be what we experienced before the pandemic. but what effect does that have on the real estate market and in particular what does that mean for office buildings that companies either are renting or owning when they don’t use the space as much. Are they likely to try to get rid of it or to keep it in and use it further in other ways?
David: It is a seismic shift or change going on right now in the real estate market but as real estate goes it’s localized and segmentized to show each locality in each market segment of real estate almost has a different story to tell and but suffice it to say that Covid has upended what everyone was experiencing prior to that which was a very stable healthy market with supply and demand and balance and a real energy behind [00:18:00] more participants coming into the real estate industry I’m and real estate market from an investment standpoint. and so now based on Covid certain segments of the market have stayed really healthy and done really well while other segments of the market have really gotten clobber. An example is retail, which has really suffered and restaurant-related properties and hotels and in some cases, office buildings as well to your question. so when it comes to office buildings we all know that many of them today or this week are close to empty because most people are working from home and that’s going to have a significant impact on their future usability and kind of their future [00:19:00] pathways.
Host: And what about construction projects? Will companies invest in those in the future?
David: Well, the new construction projects are — fall into one of two categories. Category number one is many buildings are already under construction so you can’t really stop that unless we had a total meltdown so on those buildings you’re going to have to figure out how to complete them and prepare them for occupancy. The second category is ones that have all of the approvals and maybe even have permits to build and that could include offices or any other type of building. And then the question becomes when will they come out of the ground so to speak? But the interesting phenomenon around the newer buildings, Tiffany or the ones that are under construction many of them will have pre-leases which already have commitments from tenants [00:20:00] and there was an example in San Francisco with Pinterest where they had pre-leased more than 50% of an office building in Downtown San Francisco basically being the reason why the building was able to come out of the ground and get their permanent financing and then after Covid hit they informed the landlord that they were not going to occupy the building and they were going to have to break their lease and what happened was the landlord had what they call a termination penalty for Pinterest the termination penalty in that case according to my understanding was 19 million dollars so Pinterest had to pay the landlord 19 million dollars to terminate their lease however you can imagine that the building was a nine-figure building, it was certainly over a hundred.
So being a real estate developer with a building that’s new and being completed without a tenant getting 19 million [00:21:00] dollars doesn’t really do a whole lot.
Host: That’s fascinating. Are there other trends in corporate real estate that you predict might accelerate as a result of the global pandemic?
David: I think awareness is really the big keyword right now and that if you’re a corporation and you control — think about real estate it’s usually your second largest balance sheet item and it’s also your second, first or second-largest balance sheet items it’s also your second largest operating expense behind human capital. So if you’re a corporation of any kind public-private and you are not looking based on Covid looking at your balance sheet in your financial statement saying whoa wait for a second what am I going to do about my real estate then you’re leaving an incredible amount of capital on the table. So I would say the big trend in corporate real estate is to pay attention to this asset, pay attention to how you use it and how you spend on it [00:22:00], and come up with a strategy designed to optimize your real estate so that you’re not spending a dollar more of your mission-critical capital on real estate.
Host: Thank you David there are so many trends within real estate that will be fascinating to watch. Finally, I’d like to welcome Ravi Kudesia, assistant professor in the department of human resource management. Ravi is going to share his thoughts on what the future may hold for one of the most common staples of modern-day business practices: the handshake. Hi Ravi, thank you for joining me today.
Ravi: Great to be here.
Host: Tell us a little bit about your role at the fox School of Business
Ravi: Well I’m an assistant professor in the department of human resource management and basically we’re kind of the people who study the human aspects of the business so how individuals behave, how they act, how they interact with other people, how they form teams, things like leadership, conflict.
Host: So we are recording this via [00:23:00] Squad Cast from our own homes and you know normally in a normal world we might have been in a studio and meeting for the first time we would have shaken hands. Handshakes aren’t really a common practice right now thanks to the global pandemic. In fact, they basically disappeared. What might replace the handshake going forward?
Ravi: Yeah, so the first thing that I think that happens often is people have predictions about the future like oh these things going away. I typically don’t tend to believe that there’s actually this thing called the Lindy effect and that basically is that the longer something has been around the more likely it will be to be around. and so handshakes are really really old but what I do think it’s obviously for practical and health-related reasons you know we can’t really shake hands over Zoom, we probably don’t want to be touching the hands of multiple strangers if you’re at an event or something like that. so I do think there is something that’s happening [00:24:00] at the interim right and I think there definitely is an awkwardness if you’re not doing any sort of form of greeting or salutation right? there is that so we operate according to scripts it is like I know what’s going to happen is the first time I say hi then you say hi back I extend my hand, you shake it and then we engage in a little bit of chit-chat and we sit down and then we do business right? like reality is very scripted, it’s kind of a way of acknowledging that things are different right, that if we’re doing something and maybe something kind of unique or different or quirky it’s a way to kind of provide a little bit of levity in a bit of shared understanding that hey are these are strange times and we’re kind of coping as best as we can. So I think it was just like high-profile people. I know President Obama was famous for the fist bump. I think it was the Israeli Pm at Yahoo who introduced the Namaste sign [00:25:00] as his preferred greeting. so I think the good thing about the Namaste sign of the Anjali mudra is that’s nice, you don’t have to be there with someone right I mean you can’t really fist bump the camera but you know you can put your hands together in front of the camera so that’s why I think it’s it’s conducive to the Zoom era and I think we got to do something and that maybe that’s the right something for now.
Host: So you think Namaste could catch on in the future?
Ravi: Oh yeah, I mean I think A. Let’s be honest that culturally you know the price of the world. It is a standard greeting, right? So for us living in the west, it’s a unique thing that is being adopted but you know if you’re talking to people doing business around the world I mean they’re very familiar with the various forms of greetings and salutations. You know in Europe you might be typically used to doing like two kisses on the cheek right so there’s a wide variety of cultural practices and Namaste is there in parts [00:26:00] of the world and you know maybe to some extent it’s the right greeting for today in the West.
Host: Even with a vaccine people might still feel uncomfortable shaking hands. What’s the likelihood that the handshake will re-emerge?
Ravi: Yeah, so like I mentioned that thing, the Lendi effect right? The longer something has been around, the longer it will be around. And so, generally, societies are pretty good at conversing things and they often serve these functions that we don’t really think of normally on a day-to-day basis. alternatively, if you think about it there are actually functional consequences in the workplace too, so you think about for instance nonverbal behavior, right? So, I mean you’ve heard the statistic and it’s completely wrong but it kind of gets the gist across for people who say “oh you know like 93% of all you that you communicate is non-verbal and it’s only a 7% of what you say.” [00:27:00] That’s actually not accurate but it is accurate to say that nonverbal has played an important role in organizations and society generally. But if you think about like the range of nonverbals in the zoom context you can get facial expressions, you get vocal intonations, you can get aspects of time and timing where we pause and pausing helps the point sink in but touch is something that’s actually you know it’s completely devoid in a Zoom context and touches I mean it’s there to signal so much stuff. It signals affiliation with who you associate with, and who you do not associate with. it gets at things like wants, it gets at umm — I mean it has all these functional consequences and a handshake is really one of the few sorts of channels through which touch is there in the workplace. and so in that sense, I think it serves an important function more particularly [00:28:00] there isn’t a lot of research on this but I’ve seen at least one study that looked at the consequences of a handshake in the journal of psychology and basically people who follow these common prescriptions for shaking hands like if you have a firm grip or you look the other person in the eye are rated as being more suitable for employment from interviewers. so, there is a real advantage, there’s a signaling effect and furthermore, they actually correlated these ratings of handshake quality with personality traits. and as you might know that there are these in personality psychology of these Big 5 so-called personality traits which are basically five different ways that people might differ from each other. one of them is extraversion is how much energy will you receive from the outside world from social interactions with others that’s one thing and yeah so having a “proper handshake” is sore with extraversion so you can imagine [00:29:00] how if you’re interviewing someone for a sales position that handshake might actually be conveying useful information about this personality trait that’s actually relevant for them on the job. so, they know actual signaling aspects there, this is a little bit sort of less — more tentative, I wouldn’t say the results are as strong but there might also be an asymmetric benefit for women in the workplace where women really have a chance to kind of distinguished themselves by the firmness and such other handshake. so, there’s more variability there and so they can kind of signal that aspect. so, it’s telling you something about yourself and other people something about you, it’s something that’s potentially useful in an employment context and there are these differences and you know potential benefits to be had by utilizing the handshake so for those reasons I think people have kind of some good reasons to value them and these functional reasons that they’re there. one thing I should also mention [00:30:00] is that you know maybe a way that a handshake could be different than something like being the Namaste, for instance, is there also are power dynamics about it you know like who goes into shake the hand, who goes in first that’s a dilemma, it also could be rejected right? so, you could shake someone’s hand and they could leave you hanging right so they’ll use power dynamics also like who goes in first. are they going to leave you hanging and then how much you know the pressure you exert? Are you doing a weak handshake, an appropriate handshake, are you a little too assertive? so it is signaling a lot of stuff in there is kind of like a script of routine, a ritual around it so I think for those reasons because there’s just not a lot of touches and then this is a form of touch that really can signal quite a bit, I think there are these adaptive aspects to it. and again we wouldn’t normally think about that we just — it’s that’s how culture functions right? [00:31:00] culture functions in a way that society conserve certain rituals and practices in these practices are adaptive for some ends and purposes but that doesn’t mean that we’re aware of it, we don’t know why we do it per say but they still have functions and so I think for all those reasons just the history of it, the signaling aspects of it you know, the ritualistic aspects of it I think that there’s a lot more than a handshake that we might otherwise notice if we’re not trying to be a behavioral scientist anthropologist about it.
Host: Thank you Marilyn, Lu, David, and Ravi for sharing your thoughts on the unintended consequences of 2020. It goes without saying that Covid-19 has changed everything, never before have we had to wash our hands so often or stand 6 feet away from our family and friends. [00:32:00] Moving forward we will persevere in our personal and professional lives but we will have to continue to adapt. Only time will tell how much we will evolve as a result of this year’s events even if we face some of the same challenges in 2021, the new year will bring about an opportunity to find innovative solutions and that may very well be a welcomed change.
Catalyst is a podcast from Temple University’s Fox School of Business. Visit us on the web at fox.temple.edu/catalyst. We are produced by MilkStreet Marketing, Megan Alt, Anna Batt, and Stephen Orbanek, and Karen Naylor. I hope you’ll join us next time. [00:23:00] Until then, I’m Tiffany Sumner and this is Catalyst.
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