During this unprecedented time, all of us are quickly learning how to adapt to new ways of working while our communities, families and colleagues are adjusting to this temporary new “normal.” At Abernathy MacGregor our priorities center on the safety of our loved ones, the protection of our colleagues, the importance of public health and our partnership with our clients.
If we have seen one constant during this time, it is that effective communications offers a path to stability in a world of uncertainty. While we appear to still be at the beginning stages of a new reality, we are simultaneously dealing with the critical events in front of us while also starting to plan for the next stages ahead. With that in mind, I wanted to share some thoughts on the lessons we’ve learned, the steps we are taking to serve as a partner and resource to clients, and the key issues on the horizon for which we are already starting to plan.
Our five offices have been closed since mid-March, and our employees are all safely and effectively working from home. As we shifted into new surroundings, we assisted our clients through unchartered territory as they faced sudden and unimagined new challenges. We’ve written countless communications for employees and customers, helped manage for the impact of executive committee members struck by illness, communicated to investors during a market in free fall, and partnered with numerous crisis teams working around the clock to chart a path forward.
Right now, our focus is on helping clients anticipate and manage daily communications challenges while building the right resources to help leaders concentrate on the facts that matter most. Employees are looking to their corporate leaders for guidance, leadership and inspiration. But we also recognize we cannot lose sight of the challenges still to come.
Best Practices Developing Right Now
Here is what we’re currently seeing work effectively and how CEOs should plan for the weeks ahead:
- Rebuild crisis teams for the long haul – We are living minute-by-minute, but recognize that COVID-19 will be with us for some time. Crisis response teams simply cannot run 24/7 worldwide for eight weeks or longer. CEOs need to think about refining their crisis response structure to account for three priorities: 1) rapid response to new issues (regulatory changes, impacted facilities, sick employees, etc.); 2) bolstering, refining and improving operations as the situation evolves and 3) anticipating more challenges to come.
- Find a rhythm for communications – Leadership should instill a regular communications cadence. We are all overwhelmed by time-sensitive emails right now. Companies are understandably sending out notices to keep up with the speed in which our world is changing. Leaders need to define what needs to be sent immediately, in what form and put the rest into weekly updates. Focus on protocols and policies, but seek to offer guidance, tips and support.
- Plan for more disruption – Scenario planning needs to be updated. Some challenges are proving more predictable, but as we settle into prolonged disruption it is time to revisit plans. We need to account for the fast-moving and far-reaching impacts of this crisis. What if a facility has an outbreak? Will the business function if a forced shelter in place order is mandated? Will your definition of essential employees hold up to public scrutiny? What if a senior leader is sick?
We are tracking several important trends that we believe will have a fundamental impact on business communications.
Clearly, the issues we must communicate in the coming months will be radically different than what most of us thought entering 2020. The business impact of COVID-19, and therefore the impact on each company stakeholder, is still evolving, but in all likelihood over the next several months, companies will need to communicate far different, and in many cases more difficult, messages. There will be heightened demands for transparency and an increased desire to provide hope and optimism. For business leaders, this presents an enormous challenge. We believe firmly how companies handle these issues can burnish reputations, provide stability and engender trust and loyalty for years to come. The key is being open and honest about what you know, what you don’t and what principles are driving your decision making.
With that in mind here are a few broad trends for leaders to consider going forward:
- Essential workers – As the impact of COVID-19 continues to grow, workers being categorized as “essential” will come into focus. How they are defined, how they are kept safe and how they are compensated will be closely scrutinized. CEOs would be well served to test these systems and make sure these workers have an ability to communicate with the C-Suite. For consumer staples that are seeing a peak in demand, compensation and benefits policies should reflect the state of the business these employees are feeling every day.
- Workforce reduction – In the same spirit, CEOs should start thinking carefully now for how they would carry out any workforce reduction. This is a rapidly growing reality for many organizations across sectors. How these actions are communicated to affected employees, the remaining workforce and other core stakeholders will be central to the long-term credibility of a company’s brand, management team and board.
- In many industries, this downturn will only serve to exacerbate technology-driven change. As the dust clears, the same level of care should be taken to portfolio re-orientation in response to these changes.
- Executive Compensation – With the expectation for a steep contraction in economic activity moving the U.S. into recession, we expect board, CEO and executive committee level compensation to increasingly become a central issue. Boards and CEOs with broad workforces should ask themselves what constitutes appropriate compensation now.
- Philanthropy and national service – We are encouraging our clients to think about how their business can play a role in the effort to combat this global crisis. Corporate purpose and ESG principles will be tested in this environment. The good news is that philanthropy and community service has already become core to most companies. Now is the time to review those plans and make adjustments to be sure company actions align with a defined purpose. Following this crisis these types of acts can be additive to a company’s reputation.
- Bailouts – For many sectors the economic damage related to COVOD-19 may be so significant that companies will be forced to seek funding from the federal government. Certain sectors will be deemed more in need than others and the public as well; political agenda will play a role. Boards and CEOs must understand that the scars of the 2008 bailouts have not faded. With or without strict restrictions from the government, every business asking for and receiving money should understand the public scrutiny and risk for lasting brand damage will be enormous. Those who are passed over will need to convince their stakeholders that they are strong enough financially to weather the storm without government funding.
- Guidance – The impact of COVID-19 is already proving to be one of historic proportions for the financial markets. Providing the investment community with perspective on future financial results feels not only impossible but downright irresponsible. Even in a prolonged disruptive state, effective CEOs will be able to articulate what is known, what isn’t, what can be controlled, what can’t, how well a company is financially positioned to endure and in what markets.
- Structural defenses – While Boards and CEOs are focused on keeping businesses operating and employees safe, some market participants will seek to take advantage of near-term price disruption. Already one activist has called for consolidation and at least one poison pill has been enacted. Every company should take a close look at their structural defenses and consider their response if an outsider were to act opportunistically to bring additional disruption.
As we continue to navigate the uncertainty ahead, we know new challenges will emerge and best practices will continue to evolve. As always, please do not hesitate to reach out to us if we can be of assistance or offer our insights in this rapidly changing environment.