Washington responded to the COVID-19 pandemic this week with unprecedented government intervention in the economy, ushering in a new reality for businesses large and small. For the foreseeable future, an era of big government is here.
The consequential week, which began with the Federal Reserve starting to purchase billions in bonds and mortgage backed securities, continued with President Trump controversially encouraging the country to “open up” the economy by Easter and ended with Congress passing a nearly $2 trillion economic stimulus and relief bill. Through it all, the nation endured whipsawing stock market movement, and witnessed conflicting counsel and significant tension between a president up for reelection in November and certain state governors and public health officials over how best to limit the spread of COVID-19 and get the economy up and running again.
What do policymaker decisions mean for companies and what additional actions might the government take as this global crisis continues to unfold? That is exactly what companies are trying to figure out. At the same time, they must remain acutely focused on business-critical imperatives: safeguarding employees, serving customers and providing meaningful guidance to shareholders during a generational crisis of uncertain scope, impact and duration.
Even companies with a longstanding presence in the nation’s capital would be wise to update their playbook for these remarkable times. Regardless of their levels of experience in Washington, corporate leaders should focus on:
- Business literacy. Companies can help policymakers, regulators and journalists understand their industries by affirmatively providing information about their businesses, the actions they are taking to address the pandemic, the impact of the crisis on employees and why they will continue to advocate coordination with federal, state and local governments. This action can yield long-term benefits and help government officials regard these companies as trusted partners and subject matter experts. At the same time, since policymakers frequently take cues from press coverage, the media can play a critical amplifying role. A background briefing with an influential hometown reporter or a thoughtful quote in a trade publication can shape behavior in Washington and in state capitals as well.
- “Market” access. In the coming weeks and months, Washington will direct COVID-19 relief resources to companies that make the most compelling cases that they and the support they receive from these funds will serve the public interest: sustaining critical business operations, protecting against job losses and providing interim economic relief until business operations can stabilize. This is an important narrative, and companies need to tell their stories concisely and consistently in support of it. But before they can do that, they need to understand: whether stimulus funds will even be allocated to their industry; how their sector would access funds; what, if any, prerequisites there are for qualifying; the timelines for the release of funds; and what level of influence or control the government will have over future corporate activities (e.g., stock buybacks and layoffs) if companies choose to accept this form of relief. Trade and professional associations track these types of moving-target details and can provide guidance for many companies. For other businesses with more discrete needs, a bespoke approach may be required. Either way, companies can get ahead by conducting this type of advance analysis as Washington considers additional stabilization efforts as the nation continues to navigate through the pandemic.
- Identifying allies and advocates. Companies that are effective in Washington often deploy advocacy strategies that articulate a shared or common benefit and they frequently turn to allies for support. For example, hometown chambers of commerce and local consumer groups often can make a company’s case more persuasively to policymakers who may intuitively care about their constituents’ concerns more than a “big business’” agenda. A CEO may be a compelling communicator but the companies that are most successful in navigating Washington understand when to deploy their top executive as chief spokesperson and when to instead use third-party advocates to support a position. Employees also can be exceptionally effective and credible advocates if they are aligned with management, but that strategy carries risks, particularly if downsizing, for example, is a possibility in a time of economic contraction.
Significant uncertainty and political divisiveness will continue to mark the next several weeks, if not months, as stimulus and stabilization funds are allocated. There is no certainty on the pandemic’s trajectory in the United States nor globally. But it is almost a foregone conclusion that politics before the November election, combined with intense personal acrimony among Democratic and Republican leaders, will shape government policy and action and business and economic outcomes.
Corporations and other businesses have a critical role to play by being active participants in Washington, state capitals and their local communities –deploying proven and time-tested tactics, while also developing and implementing new approaches reflective of our new reality.