Russia Hits Airfields; Kyiv Imposes Martial Law: Ukraine Update

 Russia’s attacks on Ukraine, including shelling from Belarus across northern border, have been accompanied by separatists launching assaults in the eastern part of the country.

The government in Kyiv called it a “full-scale invasion” as it declared martial law and called for international support including harsher sanctions on Russia. Moscow confirmed it is targeting military facilities, including airfields and anti-aircraft systems.

Russia Attacks Targets Across Ukraine in ‘Dark Day’ for Europe

President Vladimir Putin said he’d ordered a special military operation to support separatists in the Donbas region in Ukraine’s east, but claimed he did not plan to occupy the country. That’s even as the U.S. had warned for weeks a broad invasion including an attack on Kyiv and other key cities was likely.

Russia was roundly condemned by Western leaders including U.S. President Joe Biden, who said more sanctions would follow. The European Union said leaders will use an emergency summit in Brussels Thursday to decide how to react. 

 

 

Key Developments

• Treasuries, Haven Assets Rally as Putin Moves on Eastern Ukraine
• Ruble Tumbles to Record Low as Moscow Bourse Halts Trading
• Oil Soars Past $100 as Russia Attacks Targets Across Ukraine

All times CET:

Ukraine Says Gas Flowing Normally Despite Crisis (8:02 a.m)

State company Naftogaz says all the facilities of its gas transportation system are operating as usual and natural gas is being supplied in the required amounts. Oil transportation pipelines are also operating as normal.

Ukraine Says Russia Attacking From Belarus (7:58 a.m.)

Ukraine’s border guard service said Russian troops began attacking its units and checkpoints from across the border in Belarus in the early morning with artillery, heavy weapons and small arms.

More attacks were also coming from Crimea, the peninsula annexed by Russia in 2014, the service said. It added that Ukraine’s armed forces were returning fire.

Oil Soars Over $100 as Traders Seek Safe Bets (7:52)

Commodities markets surged, with Brent oil extending gains above $100 a barrel for the first time since 2014 while gold jumped as investors rushed for havens amid the geopolitical upheaval.

As well as oil futures, LNG spot prices in Asia extended their advance. Russia is a key supplier of energy, with Europe relying on the nation for about a quarter of its oil supplies and a third of its gas.

Aluminum rallied to a record, exceeding a 2008 peak, in a market already seeing critical shortages. Wheat prices rose to the highest since 2012 and gold hit its highest level in more than a year.

EU Plans New Sanctions Package on Russia (7:24 a.m.)

European Commission President Ursula von der Leyen “will outline a further sanctions package being finalized by the

The EU and U.S. have prepared a package that includes restrictions on some of Russia’s biggest banks, such as Sberbank PJSC and

The EU and Biden administration are also expected to introduce export controls on key technologies, such as semiconductors, aerospace, defense, and cyber surveillance technologies, plus equipment used in the energy sector. The measures are likely to target Russian oligarchs and state-owned enterprises.

Poland said it hoped NATO will deploy further troops to the eastern flank of the alliance.

Ukraine Leader in Flurry of Calls With Leaders (7:15 a.m.)

Zelenskiy said on Twitter he is “building an anti-Putin coalition” after speaking with several world leaders including Biden, German Chancellor Olaf Scholz and the European Council President Charles Michel. He called for immediate sanctions on Russia, as well as defense and financial support for Ukraine.

EU Sanctions Russians Linked to Putin But Not Many Billionaires

Scholz Laments ‘Dark Day for Europe’ (6:50 a.m.)

The German chancellor said the Russian attack is a “blatant violation of international law” that can’t be justified.

“This is a terrible day for Ukraine and a dark day for Europe,” Scholz said in an emailed statement. He was one of several leaders who held numerous talks with Putin, including traveling to Moscow, to seek a diplomatic solution. Berlin announced this week it was halting certification of the Nord Stream 2 gas pipeline from Russia to Germany.

Explainer: How Nord Stream 2 Got Stuck in Russia-Ukraine Limbo

First Central Bank Moves to Raise Rates (6:38 a.m.)

Kazakhstan raised its key interest rate to 13.5%, the highest since 2016, in the first emergency move by a central bank in a former Soviet country since Russia launched its attack on Ukraine. Such actions may be taken by other central banks in reaction to the security crisis.

What’s at Stake for Global Economy as Russia Standoff Escalates

Ukraine News Hits Stocks, Halts Moscow Exchange (6:57 a.m.)

Equities suffered heavy losses after Russia attacked targets across Ukraine, with S&P futures falling as much as 2.5% and Nasdaq contracts slumping almost 3%. Euro Stoxx futures matched that slide before the market open.

The Moscow Exchange halted trading in the ruble, stocks and futures, after the currency fell to its lowest level since 2016.

The ruble fell 3.5% to 84.1 per dollar, while Brent crude topped $100 for the first time since 2014. Gold rallied more than 1.5% to near $1,940.

Separatists in Eastern Ukraine Launch Offensive (6:56 a.m.)

Donetsk separatists launched attacks on Ukrainian positions along the entire line of contact, Interfax news service reported, citing the head of its militia, Eduard Basurin. Luhansk separatists said they were storming the city of Shchastia, which is held by Ukrainian forces, according to Interfax. There was no independent confirmation of those claims.

Putin’s move against Ukraine came after the Kremlin said the separatists had appealed to it for military help against Ukrainian forces. Kyiv has repeatedly denied it planned a military effort to try and retake breakaway areas. 

Explainer: Why Donetsk and Luhansk Matter to Putin and the West

Biden Tells Zelenskiy ‘Severe Sanctions’ Coming for Russia (6:13 a.m.)

Biden spoke with Zelenskiy by telephone and told him the U.S., its allies and partners “will be imposing severe sanctions on Russia,” the American president said in a statement.

Biden said the U.S. would continue to provide support and assistance to Ukraine and is people. 

The U.S. and NATO had made clear beforehand that they would not deploy troops to Ukraine in the event it was attacked, though many countries have sent defensive weapons in.

Ukraine Imposes Martial Law as Russia Attacks: President (6:15 a.m.)

“Russia has attacked our military infrastructure and our border guards,” Zelenskiy said in a video posted on his telegram channel. “In many cities explosions were heard. We are imposing martial law across the entire territory of our state.”

The Ukrainian leader urged people to stay calm and remain at home if possible, saying “we are working, the army is working.”

Russia Says Targets Ukraine Military Infrastructure: Tass (5:59 a.m.)

Russia’s Defense Ministry said it’s using “high-precision” weapons to target Ukrainian military infrastructure, Tass reported.

Russian forces are using aircraft, artillery and missiles to destroy Ukraine’s air force, military airfields and anti-aircraft systems, the ministry said, in the first official Russian confirmation that its operations extend beyond Donbas.

The Defense Ministry said it’s not targeting cities and civilians in Ukraine have “nothing to fear,” Tass reported, even as explosions were reported across the country.

Russia Attacks Checkpoints, Kyiv Under Attack: Reports (5:49 a.m.)

Russia is attacking multiple checkpoints along its border with Ukraine, Interfax news agency reported, citing people with knowledge of the matter inside Ukraine’s border guard service.

The Interior Ministry warned Kyiv was under attack from ballistic missiles and urged citizens to go to shelters. The Defense Ministry denied an earlier report by Interfax that Russian assault troops were landing in the Black Sea port cities of Odessa and Mariupol.

“Russian troops are attacking peaceful Ukrainian cities from various directions, including temporarily occupied Donbas and Crimea, as well as the northeastern region,” Ukraine’s Foreign Ministry said in a statement.

President Volodymyr Zelenskiy said he had imposed martial law.

Ukraine says Says Russia Launched ‘Full-Scale Invasion’ (5:07 a.m.)

Foreign Minister Dmytro Kuleba said in a tweet that Putin has “launched a full-scale invasion of Ukraine” and cities are under airstrikes.

“This is a war of aggression. Ukraine will defend itself and will win,” he said. Kuleba said the world can and must stop Putin, adding “the time to act is now.”

Ukraine Closes Airspace to Passenger Flights (5:17 a.m.)

Ukraine closed its airspace for passenger flights, according to a notice Thursday. Russia has also put in place flight restrictions over Ukrainian territory.

Putin Said U.S. Crossed Russia’s ‘Red Lines’ (5:01 a.m.)

Putin accused the U.S. of ignoring Russia’s demands for security guarantees and crossing its “red lines” with an expansion of NATO infrastructure east.

In his televised speech he said he aimed to demilitarize Ukraine. “Russia can’t exist with a constant threat from the territory of Ukraine,” he said.

Putin has long warned that Russia views expansion of the North Atlantic Treaty Organization in eastern Europe as a threat and he couldn’t tolerate Ukraine joining the alliance. In December, he demanded the U.S. and its allies provide legally binding security guarantees that the alliance not expand further and not put offensive weapons in Ukraine. Those demands were rejected.

NATO contends that it’s a defensive alliance and isn’t a threat to Russia.

Biden Says ‘World Will Hold Russia Accountable’ (4:42 a.m.)

Biden said in a statement that “Putin has chosen a premeditated war that will bring a catastrophic loss of life and human suffering,” adding Russia alone would be responsible for “the death and destruction this attack will bring.”

Biden said he would speak with Group of Seven counterparts Thursday and then address the American people to announce further punishments for Moscow. “The world will hold Russia accountable,” Biden said.

— With assistance by Rosalind Mathieson, Daryna Krasnolutska, Michael Winfrey, Gregory White, Alberto Nardelli, Kevin Whitelaw, Kateryna Choursina, Iain Rogers, Mariajose Vera, Jake Rudnitsky, Brendan Scott, Jon Herskovitz, Niluksi Koswanage, Vladimir Kuznetsov, and Jeff Sutherland 

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The Future Of Cryptocurrency

A cryptocurrency is a digital currency that is created and managed through the use of advanced encryption techniques known as cryptography. Cryptocurrency made the leap from being an academic concept to (virtual) reality with the creation of Bitcoin in 2009.1? While Bitcoin attracted a growing following in subsequent years, it captured significant investor and media attention in April 2013 when it peaked at a record $266 per bitcoin after surging 10-fold in the preceding two months. Bitcoin sported a market value of over $2 billion at its peak, but a 50% plunge shortly thereafter sparked a raging debate about the future of cryptocurrencies in general and Bitcoin in particular.2? So, will these alternative currencies eventually supplant conventional currencies and become as ubiquitous as dollars and euros someday? Or are cryptocurrencies a passing fad that will flame out before long? The answer lies with Bitcoin.

 The Future of Cryptocurrency

Some economic analysts predict a big change in crypto is forthcoming as institutional money enters the market.3? Moreover, there is the possibility that crypto will be floated on the Nasdaq, which would further add credibility to blockchain and its uses as an alternative to conventional currencies.4? Some predict that all that crypto needs is a verified exchange traded fund (ETF).5? An ETF would definitely make it easier for people to invest in Bitcoin, but there still needs to be the demand to want to invest in crypto, which might not automatically be generated with a fund.

Understanding Bitcoin

Bitcoin is a decentralized currency that uses peer-to-peer technology, which enables all functions such as currency issuance, transaction processing and verification to be carried out collectively by the network.6? While this decentralization renders Bitcoin free from government manipulation or interference, the flipside is that there is no central authority to ensure that things run smoothly or to back the value of a Bitcoin. Bitcoins are created digitally through a “mining” process that requires powerful computers to solve complex algorithms and crunch numbers. They are currently created at the rate of 25 Bitcoins every 10 minutes and will be capped at 21 million, a level that is expected to be reached in 2140.7?

These characteristics make Bitcoin fundamentally different from a fiat currency, which is backed by the full faith and credit of its government. Fiat currency issuance is a highly centralized activity supervised by a nation’s central bank. While the bank regulates the amount of currency issued in accordance with its monetary policy objectives, there is theoretically no upper limit to the amount of such currency issuance. In addition, local currency deposits are generally insured against bank failures by a government body. Bitcoin, on the other hand, has no such support mechanisms. The value of a Bitcoin is wholly dependent on what investors are willing to pay for it at a point in time. As well, if a Bitcoin exchange folds up, clients with Bitcoin balances have no recourse to get them back.

Bitcoin Future Outlook

The future outlook for bitcoin is the subject of much debate. While the financial media is proliferated by so-called crypto-evangelists, Harvard University Professor of Economics and Public Policy Kenneth Rogoff suggests that the “overwhelming sentiment” among crypto advocates is that the total “market capitalisation of cryptocurrencies could explode over the next five years, rising to $5-10 [trillion].”8

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The historic volatility of the asset class is “no reason to panic,” he says. Still, he tempered his optimism and that of the “crypto evangelist” view of Bitcoin as digital gold, calling it “nutty,” stating its long-term value is “more likely to be $100 than $100,000.”8?

Rogoff argues that unlike physical gold, Bitcoin’s use is limited to transactions, which makes it more vulnerable to a bubble-like collapse. Additionally, the cryptocurrency’s energy-intensive verification process is “vastly less efficient” than systems that rely on “a trusted central authority like a central bank.”8?

Increasing Scrutiny

Bitcoin’s main benefits of decentralization and transaction anonymity have also made it a favored currency for a host of illegal activities including money laundering, drug peddling, smuggling and weapons procurement. This has attracted the attention of powerful regulatory and other government agencies such as the Financial Crimes Enforcement Network (FinCEN), the SEC, and even the FBI and Department of Homeland Security (DHS). In March 2013, FinCEN issued rules that defined virtual currency exchanges and administrators as money service businesses, bringing them within the ambit of government regulation.9? In May that year, the DHS froze an account of Mt. Gox – the largest Bitcoin exchange – that was held at Wells Fargo, alleging that it broke anti-money laundering laws.10? 11? And in August, New York’s Department of Financial Services issued subpoenas to 22 emerging payment companies, many of which handled Bitcoin, asking about their measures to prevent money laundering and ensure consumer protection.12

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Redesigning the Post-Pandemic Workplace

Work as we know it is forever changed by COVID-19. Now is the time for  

managers to envision the office that employees will return to.

 

The world has experienced widespread disruption over the past

year as a result of the COVID-19 pandemic. With the successful development and distribution of a COVID-19 vaccine, the timeline for when the so-called next normal will arrive is clearer. Leaders should begin to take steps to consider what the workplace will look like when it arrives.

There is no going back to the prepandemic workplace. Organizations and individuals have had no choice but to discover new ways of working. Many have reported successfully implementing years’ worth of digital transformation plans over the course of a few months. For example, mortgage loan company Freddie Mac implemented remote building inspection, and many health care providers pivoted rapidly to telemedicine. Even companies that needed to maintain a significant colocated workplace used digital innovations to improve employee and customer engagement and safety. For example, Hitachi adapted sensors to monitor social distancing in factories, and many restaurants quickly adopted virtual ordering and delivery services. Managers should begin asking themselves how they can build on such innovations to further transform their businesses instead of planning a return to ways of working that were becoming outdated and obsolete even before the pandemic.

The pandemic is not the only disruption we have experienced in the past year. It has also been a time of political divisiveness, social unrest driven by racial inequality, and ongoing digital disruption, to name but a few. In our forthcoming book, The Transformation Myth: Leading Your Organization Through Uncertain Times, we argue that the end of the pandemic will almost certainly not mean an end to disruption. Over the next few months, leaders would be well served by taking the opportunity to learn how to apply the innovations and advances implemented in recent months and developing an approach for ongoing workplace reinvention that is 

more resilient to all types of disruption.

 

Maximize the Benefits of Both Remote and Colocated Work

The anticipated gradual return to colocated work in the coming months provides opportunities to experiment with hybrid ways of working. Returning to the office strategically, by focusing first on the activities best performed in person and, in the process, evaluating the effectiveness of both remote and colocated work, gives managers the ability to critically consider the ways in which a hybrid workplace might be more effective.

The pandemic taught us that remote work can be highly effective — to a degree. Employees are often more productive when they don’t have to spend time on a daily commute. Meetings may be more frequent but tend to be shorter. Virtual work also allows people to collaborate across geographic, physical, and organizational boundaries in novel ways. But our recent research has shown us that the past few months of widespread remote working have also had some significant drawbacks. Our interviews with over 50 executives between April and November 2020 about their experience of leading their organizations through the pandemic uncovered challenges in the following areas:

Innovation. Although remote collaboration among colleagues who regularly engaged with one another worked well, serendipitous connections with others dropped off precipitously. Research has shown that these weak ties are often critically important to innovation and knowledge sharing in organizations.

Starting new projects. Remote work had little impact on workers’ ability to finish big group projects that were already underway. Relying on virtual collaboration to initiate new projects, however, was an order of magnitude more difficult in terms of challenges and stressors. This finding underscores the value of remote work but raises questions about relying on it exclusively for a long-term workplace strategy.

Culture. Several people we interviewed said that establishing and maintaining organizational culture is difficult, if not impossible, in a virtual setting. Many of the cues to organizational culture that the physical workplace provides, such as the design of the office and how people dress, disappear with virtual work. The lack of a strong sense of culture is a particularly acute problem with respect to onboarding new hires.

Mentoring and coaching. Employees, particularly younger ones, received less mentoring and coaching during the shift to remote work than they did before the pandemic. If people don’t get the feedback they need to develop into more mature employees and leaders, this deficiency could negatively affect career development over time.

Leaders should spend the next few months planning how to combine the best aspects of remote and colocated work. Ben Waber, president of the workplace analytics company Humanyze, shared with us early data from Asia that suggests that a little colocation can go a long way toward reducing the limitations of remote work. Employees who returned to the office only one or two days per week increased the number of serendipitous connections by about 25%, Waber said. Yet we also expect that decisions about balancing remote and colocated work will affect, and be affected by, a broader set of factors, such as school reopenings and public transportation load, which have also been affected by the pandemic.

Leaders should consider the following as they envision the reinvented workplace:

Enabling flexibility in usage. The pandemic has underscored the importance of organizational nimbleness, and organizations can design physical workplaces to support it. Office furniture manufacturer Steelcase is now developing product lines designed for on-the-fly adaptation, according to Sara Armbruster, the company’s vice president of strategy, research, and digital transformation. Different office configurations could be employed depending on whether a group is brainstorming, hosting a workshop, or conducting a daily stand-up meeting.

However, managers will need to be mindful of employee preferences as they rethink how a space is configured. Janet Pogue McLaurin of architecture and design company Gensler told us that 61% of U.S. employees still want a dedicated desk in the workplace, even if it means they need to come to the office more often. This number may change as the pandemic wanes, but managers might consider ways to create a sense of employee ownership of personal space amid this flexibility or to establish a temporary sense of ownership through a booking or reservation system.

It also may be that office space configurations change seasonally, perhaps with decreased workplace density during winter months to promote employee health. For example, the health insurer Humana took advantage of mild weather in Louisville, Kentucky, and created pop-up outdoor offices in partnership with local parks to provide safer workspaces during COVID-19. The company brought in tents, socially distanced work areas, Wi-Fi, restrooms, and food trucks to allow small numbers of employees to work together in safer ways. The company may explore whether these outdoor pop-up workplaces have additional benefits and retain them as a part of its workplace strategy for the future.

Continuing to evolve virtual work. Organizations should continue to experiment with virtual work amid the gradual return to the workplace. First, most people have been working virtually for less than a year. While that amount of time seems substantial, it is unlikely that employers have discovered the full range of opportunities that virtual work provides during that period. For example, many companies are just beginning to explore the possible benefits of more advanced asynchronous collaboration tools, and they are only scratching the surface on the myriad ways to leverage the data generated by digital collaboration to improve workplace performance.

Second, the nature of virtual work will change when organizations can combine it with colocated work. Rather than needing to perform all work remotely, organizations can begin to explore more deeply the processes and practices that can evolve virtual work to optimize organizational benefits. For example, the pandemic uncovered important deficiencies with how companies previously used digital tools. Several interviewees who were long-term remote workers reported feeling more included once everyone else on a team was also remote. Meetings in which some participants are physically present together while others are remote may be worse than either exclusively colocated or purely virtual meetings. Managers who continue to run hybrid meetings should experiment with new ways to promote inclusion of remote participants.

Digitally supporting colocated work. If people have the option to work from home, it seems likely that they will use this time to engage either in individual focused work or in remote meetings. When employees decide to make the effort to come into the office, it will be to engage in the types of tasks that require in-person interactions. Digital tools can help maximize in-person interactions by identifying who will be in the office at the same time. These apps could begin to incorporate more advanced recommendation features, suggesting new connections using organizational network analysis among those also at the office. This increased digitalization and analytics can also help improve organizational knowledge flows.

While digital tools create opportunities to work in new ways, organizations should also look further into the future and consider how these tools might be applied to support changes in employee behavior as work is automated. Managers also must continue to rethink how they manage performance as more employees adopt a hybrid model with both remote and colocated work.

Discovering Workplace, Workforce, and Work

Rethinking the workplace also opens up new opportunities for rethinking the workforce and, ultimately, work itself. When your organization is not limited to a colocated workplace, the idea of whom you can include in the workforce expands. For example, many Silicon Valley companies have indicated that they are able to hire more-diverse employees when their potential talent pool is not limited to those who want to live in the San Francisco Bay Area. It also creates opportunities for rethinking work itself by creating new ways to integrate automation and analytics to digitally transform many aspects of work.

The workplace, workforce, and work of the future will be fundamentally different as a result of the pandemic. The gradual emergence from this disruption provides an unprecedented opportunity to explore and experiment. Leaders must learn to continually reinvent the future of work, and now is the time to begin discovering how to bring that future about.

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