COVID-19 continues to reshape all aspects of our society and economy, presenting business leaders with extraordinary challenges. We argued last week that, as difficult as it is in the face of potentially existential financial threats, it is critical for business leaders to also focus on the public good. Doing so is both the right thing to do – and, crucially, it is what positions them to emerge from this crisis with their reputation intact, leading to increased customer loyalty, employee motivation and stakeholder trust. We also warned that failure to think this way could cause companies to emerge from this crisis as Villains who could face punishment from an angry public and their elected officials.
The good news in the early days of this crisis businesses generally seem to be taking this to heart. As former CEO Lloyd Blankfein put it to the Wall Street Journal, business leaders “are thinking about making sure they come out of this with a good reputation…You want to be perceived as someone who does the right thing.”
But we are still in the early days of this thing and business is going to have to be prepared to maintain this focus on good will and reputation if it is to come out the other side of this crisis with public trust intact.
Let’s start with the positives. Concrete examples of companies doing the “Heroic” thing are everywhere. We have put together a list below and it is far from comprehensive.
Here are some of the noteworthy trends we are seeing.
- Making Responsible Decisions: Everyone’s most basic duty right now is heeding public health experts. Government has been slow to impose mandates, making it all the more important that many businesses didn’t wait, imposing voluntary or mandatory telework policies and other mitigations techniques as far back as the first week of March. Retailers like Disney, Patagonia, Urban Outfitters and Apple are closing stores globally, while Starbucks transitions to a “to-go” business model. If America “flattens the curve” it will largely be because of those private actions that came ahead of government policy.
Obviously, there are exceptions. Certain movie theaters, restaurants, tourist attractions, retailers and other public destinations remain stubbornly open. These businesses are already being called out on Twitter. Should a cluster of infections ever be traced back to one of their facilities, there will be a public reckoning that may dwarf the revenue they preserved by staying open.
- Support for impacted workers: There are reports of a lot of companies helping workers in a variety of ways. Perhaps the highest profile example is the NBA teams and players providing full pay for arena employees who are out of jobs. Amazon recently announced it is offering unlimited sick days to hourly workers, rather than the standard 10 days per year.
- Support for Customers: Comcast, AT&T, Verizon and some other telecoms have led the way here, taking steps to ensure customers who cannot pay their bills won’t lose their service. And the email inboxes of Americans everywhere have been literally flooded with empathetic messages from virtually every company they do business with seeking to reassure them.
- Support for Communities: Here, too, Comcast stands out, extending its Internet Essentials program to more families so that they can access broadband service at low or no cost. Walmart, CVS, Walgreens and others have also stepped up in a variety of ways, including volunteering their facilities as testing sites for COVID19. And, of course, the laboratory companies and associated health care companies that are filling the gap in America’s capacity to test patients at scale are doing something enormously important.
Taking an unexpected approach, LVMH, parent company of high end, luxury perfume brands including Dior and Givenchy, has pledged to dedicate all production facilities to manufacture hand sanitizer for the French government amid worldwide shortages.
Taken together, these actions are encouraging. American business is distinguishing itself in terms of its agility, decisiveness, far-sightedness and sense of responsibility. Having said that, the real test will come over the next 60 – 90 days, when tens of millions of Americans will endure real hardship – economic, emotional and physical. Businesses will either rise up to help, or in failing to do so, confirm people’s worst suspicions.
A lot hangs in the balance.
With that in mind, here are the things corporate leaders must be thinking about:
- Helping the “Little Guy”: Airlines and other industries will be bailed out. The Fed has already gone to unprecedented lengths to prop up the financial markets. Americans won’t accept it if the same help isn’t there for workers and small businesses. Obviously, government action is key. But business can do its part, first by actively supporting government actions aimed squarely at workers and smaller businesses. Beyond that, companies need to do everything in their power to avoid layoffs to the greatest extent possible, extend the most generous sick leave policies they are able, and work with their smallest business partners as fairly as they can to keep them in operation.
- Support of Health Care Workers: If the experts are right, the coming days will bring a wave of patients to hospitals around the country. Doctors, nurses, first responders and others will sacrifice immensely. Companies have been there for military families and veterans. Now we need to focus on our COVID-19 warriors. Restaurant companies can prepare free meals and delivery companies can bring them to workers and their families. Media companies can rally the public. Consumer packaged goods companies can deliver “care packages.” Any gesture can help and it will inspire the public.
- Focus on Kids and Parents: The closure of schools is one of the extraordinary aspects of this crisis. Any company with the capability to help parents cope with home schooling needs to step forward. Every broadband provider should follow Comcast’s lead and make broadband service available as broadly as possible to families who could not otherwise afford it. Media companies should tap their creative talent to deliver content free of charge to help parents fill the day with educational programming. Streaming service providers should consider steep discounts or even free services for the duration of the epidemic.
- Executive pay: Finally, this difficult issue must be addressed. Already, a number of CEOs have reduced their pay to $1. While it is easy to dismiss this as “virtue signaling” it is impossible to overstate the potential public fury toward CEOs that are perceived to be insulating themselves from widely shared pain. Any company contemplating layoffs, widespread pay cuts or asking for government support must be prepared to take some action on executive pay.
These are just examples about the types of far-reaching steps companies should be thinking about in the present crisis. This moment is unlike anything America has experienced since at least 9/11 and, arguably, since as far back as WWII. Every aspect of our way of life is disrupted with no clear end in sight.
American businesses are rallying. They are showing a spirit that has always been there, but has been long overlooked or dismissed by a skeptical media, cynical politicians and a wary public. The companies that dig deep and do even more will cement bonds with customers, employees and other stakeholders that will unlock value for years to come.
Appendix:
Media outlets, social media platforms and company releases continue to announce and report on corporate initiatives and responses to the spread of COVID-19. We have compiled a list, far from comprehensive, of some of the notable organizations stepping up.
- Facebook will offer $1,000 bonuses to support every employee during the outbreak. The company has also pledged to give out $100 million to 30,000 small businesses impacted by the virus.
- Amazon has decided to prioritize the delivery of medical supplies, household staples and other “high-demand products” until April 5. Amazon is also offering unlimited sick days to hourly workers, rather than the standard 10 days per year.
- Walmart shortened its store hours in all locations to help employees restock shelves overnight and clean stores. Employees will keep their normal shifts.
- Grocery stores including Publix, Kroger, Giant, Harris Teeter, Trader Joes and others have followed suit and also modified hours to allow restock and cleaning.
- Retailers, including Disney, Apple, Nike, REI, Patagonia, Urban Outfitters, Gap, Glossier and others have temporarily closed stores.
- Starbucks has switched to a “to-go” business model, closing seating areas but allowing customers to order, grab and go.
- LVMH, parent company of luxury perfume brands, will use its facilities to produce hand sanitizer for the French government amid global shortages.
- Telecom providers including Verizon, Comcast, Charter and others have pledged not to disconnect customers who can’t pay due to virus disruptions.
- Numerous companies continue to advise all or some staff to work remotely, including Amazon, Google, Salesforce JPMorgan Chase, GM, Ford, Twitter, Apple, Microsoft and Netflix.
- NBA players and teams continue to donate money to cover the thousands of salaries of hourly workers after the indefinite suspension of the season.
- PepsiCo partnered with Baylor University Collaborative on Hunger and Poverty and McLane Global to support the U.S. Department of Agriculture’s initiative to ensure students get the meals they would if schools were still in session. Beginning next week, the companies will provide the delivery of nearly 1 million meals to rural areas impacted per week.