“When the map differs from the terrain, go with the terrain.
-Admiral Eric Olson, United States Navy, Retired
Predictions abound in times of uncertainty. And these are certainly those times.
Yet, looking forward, there are some fair assumptions that can be made. We are likely looking at a bumpy and uneven pandemic recovery. Consumers and companies will not return to business unchanged and unscathed. The economy will be demand-constrained by reduced spending and limited business investment, even once fully reopened. Racial justice – and other social issues – will take new priority, calling on business to respond in meaningful ways. On top of all of this, still in play are the very rational warnings that existed before we ever heard of COVID-19, warnings around geopolitical instability, macroeconomic risk, climate change, and global economic inequality.
It’s a lot.
So rbb Communications has identified 5 issues that comprise our near-term threat index for the next six months.
These are not predictions. Rather, they are intended as areas that organizations across all industries should be planning for, carefully monitoring, and communicating thoughtfully with stakeholders about. If the past few months have taught us anything, it’s better to be prepared.
5 NEAR-TERM THREATS
- SURFING THE VIRAL TIDAL WAVE
With new spikes in COVID-19 cases across the country, it may feel as if a resurgence has hit. But scientists say we’re just experiencing a bumpy first wave. A true second wave would occur once the first wave is brought under control, which means businesses would be fully re-opened and many will be operating on the premise that coronavirus is behind us.
Just because companies managed through the first wave, doesn’t mean that same process will work for a second wave. Should a second wave occur – or a new contagion emerge – the economy will enter it in a more vulnerable state with employment numbers that may not have returned to pre-pandemic levels, a political landscape that may have deteriorated, and industries such as travel, airlines and energy that may not have fully recovered.
A resurgence is likely to deliver a more significant impact for business than the first with those that failed to capture improvement opportunities the first time around among the hardest hit.
Mitigating Action: Assemble an executive-level team to review areas of success – and challenges – in managing COVID-19 communications to date. Use these insights to create a communication plan that anticipates ongoing spikes as well as a true second wave. Additional insights may be gained through the following actions: 1) a ongoing landscape audit that reviews competitor, legal, health, industry, regulatory, and technology considerations 2) a corporate culture review to evaluate tolerance and capacity for continued change and 3) a product or services analysis to identify new or evolved offerings that may have increased viability in the coming months.
- ANSWERING ACTIVIST EXPECTATIONS
It started with CEOs sharing thoughts on COVID-19. As we’ve noted previously, there were a flood of messages from CEOs with commitments related to safety, health and wellness. Then came the social justice protests. The C-suite communications expectation carried forward. And companies found that social justice is more complicated than hand washing.
Companies who don’t regularly swim in the social issues pool have struggled with the risk of being criticized for not saying anything, the risk saying the wrong thing and the risk that they will be expected to comment on everything.
Companies are attempting to define how they will show up in the world beyond operations, financials and industry issues – some for the first time. This requires a values-based business approach that doesn’t have a comfortable paradigm for many, many, many businesses. And activism isn’t confined to the streets. Consider CrossFit’s recent loss of gym owners and sports industry support after a racist Tweet from its founder.
Those organizations who fail to create a clear organizational paradigm to guide actionable response to social issues will continue to struggle. And do so in the ever brighter spotlight of stakeholder expectations.
Mitigating Action: Pull together a focused but diverse group of internal and external advisors to develop a corporate social issue responsibility guide that reviews a broad set of social issues and addresses three questions: 1) What is our responsibility? 2) Who will we speak to about it? 3) How will we create meaningful action around it? Not every social issue will carry the same weight in every organization. But it’s better to know what your issues matrix looks like before you’re asked to define it.
A recent quote from Intel CEO Bob Swan sums up this approach nicely, “When the s— hits the fan—whether it is COVID or social injustice—we look to our purpose to figure out what to do. Our purpose is to create world-changing technologies that enrich the lives of every person on earth. That simple line helped us define fairly quickly what to do.”
- RIDING THE ECONOMIC ROLLER COASTER
While some level of economic uncertainty is part of doing business, economic volatility is a whole different situation and there are a number of factors that suggest we should be planning for a prolonged state of financial chaos.
Policy steps thus far have been aimed at the low-hanging fruit. Falling interest rates and a partial return to business are unlikely to offset the inadequacy of equity financing and capital mobility. Add to this the massive volatility in the stock market coupled with uncertainty about the trajectory of the pandemic make the economic landscape even more unclear. Further, as we progress toward the November election, it is with deep concern about the stability of the process due to primary voting failures in a number of states. This opens up the potential for destabilizing backlash on the outcome of the Presidential election.
In times of economic volatility, companies may step back from making future-facing investments, decrease innovation activity, slow hiring, and generally shelter in place until the moment passes. While understandable, this reaction inhibits the stabilizing force that positive business activity provides during times of crisis.
Mitigating Action: Ensure plans don’t suffer from a lack of imagination. While business leaders are inherent optimists, this isn’t a moment to simply trust that everything will be fine. Operational and communications plans must address absolute worst case scenarios. Leaders can only move forward with confidence when they know that contingency plans exist to support continuity when the unthinkable happens. And, if 2020 so far is any indication, it very well may.
- OVERCOMING CHANGE FATIGUE
Most CEOs can rightly claim to have led change – in some cases substantial change – in response to the pandemic. Equally, these change leaders are likely to say they are ready to resume business operations in the “new normal.”
But what if that doesn’t happen? Years ago, research identified a condition called “change saturation,” which is the point at which an organization can no longer effectively handle additional change. In a change saturated environment, employees become disengaged, frustrated and resistant, projects suffer from lack of clarity, limited resources and anemic momentum, and companies experience higher turnover, declined productivity, and ultimately lost revenue, profit and market share.
Just because a company has adapted to this point, doesn’t guarantee it has the capacity that may be needed in an unpredictable environment. It’s naive to say “we have changed before so we can continue to change in the future.” In fact, the opposite may be true.
Mitigating Action: Activate an internal program by which employees at every level expect change, value the ability to change, and define their job in relation to change. This starts with an audit to understand employee and executive perspectives and existing levels of change fatigue or excitement. From there, forward-facing plans should be reviewed to identify key moments of change and corresponding communication plans should be developed to address those moments in a way that supports the organization’s capacity for positive adaptation.
- SUSTAINING THE NEW WORKPLACE DYNAMIC
By now, every organization has created a basic plan for what reopening or going back to the office looks like. It probably involves phases, accommodates social distancing, and includes new health and safety protocols.
But many companies are finding plans more difficult to implement than anticipated. It turns out that a plan is one thing but getting employees and customers to buy into it is something else entirely. Restaurants, bars and other consumer establishments have struggled to enforce social distancing and policies regarding masks among patrons. Policing these behaviors may feel contrary to the ethos of the hospitality and retail industries.
Notably, the Actors’ Equity Association union that represents many of Walt Disney World’s cast members called on the company to delay the Orlando park’s planned reopening. And Disneyland announced it would not reopen as scheduled due to a lack of guidance from California officials.
While Disney is a highly visible company, any number of companies are likely to be impacted by forces unaccounted for or outside their direct control. As business resumes, employees who are forced to return to the office before they are ready may not return at all. This includes the millions of parents with young children who no longer have childcare and summer camp options available to them. And, while there are certainly a lot of qualified candidates in the market right now, the reactive cost of rehiring and re-training for suddenly vacant positions is a costly process that most organizations would be wise to avoid if possible.
Speed to reopening is one factor of post-pandemic success but speed in the absence of roadblocks may be the true competitive advantage.
Mitigating Action: Reopening plans are not static initiatives and must be revisited regularly by a group of diverse leaders with a perspective on employee and customer expectations as well as the changing landscape. Areas in which companies must rely on partners or outside entities for re-opening success should be flagged as potentially at risk and back-up plans made where possible. Finally, even as companies re-open, internal and external communication plans should reflect the organization’s preparedness to revise processes and pivot when circumstances change.
We don’t know what’s on the horizon. It may be that we look back on this period as an anomaly in the otherwise steady pace of commerce. But we don’t think so.
Even if there are no more seismic shifts this year, recent data shows that the vast majority of leaders believe that COVID-19 will fundamentally change the way they do business over the next five years.
Rather than talk about a return to normalcy or operating in the new normal, it is probably time to leave the word “normal” aside for the time being. We are instead entering a new dynamic and a new environment that will define business thinking and decisions for the foreseeable future.
The ability to manage constant and accelerating change at an enterprise level is now a core business competency. The ability to do it well is a game-changer.
Risk & Reputation Advisors, a division of rbb Communications, focuses on corporate reputation planning, preparedness and management.
With decades of experience, cutting-edge digital acumen and an outcomes-focused approach, our senior-level team helps organizations ensure they are prepared to successfully weather any storm. We take our work seriously because we know that reputation impacts have real outcomes for real people. We’re here to help. Give us a call.