Necessity is the mother of invention.....and change

The perspective of corporate affairs and communications leaders, and the world they inhabit, has framed the content of our blogs since March. They, along with IT and HR, have been at the sharp end of the corporate response to the pandemic, coordinating it and frequently leading it. Without their insights, and willingness to talk candidly, there would be no blogs.

In this blog we pull together the key findings that have emerged from the topics that have cropped up most frequently in the calls we have had, grouped under the following categories: Remote working; Social contract and trust; Leadership communications and behaviour; Responsible business & ESG; Corporate Affairs and stewardship of reputation; Internal Communications; Government and Media; What next?.

As a headhunting and talent advisory firm in corporate affairs, internal communications and employee engagement (and reputation and brand more broadly), we have always believed we have a responsibility to be as well informed and insightful as we can be about the issues and developments that shape the organisation and capability needs of these functions. 

A word of warning – it is quite long, but we have been spoilt for content and there is a lot of ground to cover and some very important issues.

Remote working/WFH

Companies have found out, in a way they would never have done (or at least not for several years) that they can work remotely and not ‘fall over’. As a senior executive from a big banking group recently said to me “who would have thought that a big global bank could be run from people’s studies, kitchens and bedrooms?”. Digitalisation transformation programmes have been advanced by several years and, in some cases, almost completedIt is probably the most obvious and vivid example of the ‘accelerator effect’ of COVID-19.

“We didn’t think we had the technology, but it turned out we had and we just made it happen”.

For all its limitations, video conferencing from home has removed barriers and allowed people to shed their armour and reveal more of themselves. It has, as someone remarked to me, “softened relationships”.

That said, there is no substitute for physical proximity......

“A complex piece of work takes longer to get done. Marking up drafts, moving them on....more meetings to get same amount of work done. Added to which the levels of disclosure are greater which makes it even more arduous”.

“I think it has shown how we work so much better/quicker when we’re all in the same place together – it's been really hard at times trying to coordinate when we’re all at home remote working”.

“You can’t bounce ideas off each other”.

Those with an external facing role, dealing with the media, government, regulators, investors etc., have found it more difficult to engage, negotiate and build relationships.

“We are engaging with the Government and Ofcom on big hairy issues; you need to be able to read cues and body language”.

“Technology may support virtual working but identifying the needs of both internal and external stakeholders still requires high quality f2f conversations”.

A newly appointed Head of Media Relations told me that he was just not able to build relationships with a new set of sector correspondents in the way he would normally do. Not only are new relationships harder to build, chance meetings are also nigh on impossible. 

Unexpected encounters matter and when people work remotely we eliminate these”.

WFH is undoubtedly a big frustration for those whose ‘home’ circumstances are less than ideal and who feed off the vibe and social interaction of the office. Several consultancy heads we have spoken to are deeply concerned about their younger colleagues, who not only miss out on the social interaction, but who are also missing out on learning by osmosis – the learning you absorb by shadowing more senior colleagues, watching and listening to more conversations.

It has also been more difficult to see if a more junior colleague is struggling, as you would normally do in the office by clocking their body language. They are desperate to bring these younger employees back, but only when it is safe and responsible for them to do so, and few have any plans to re-open before September.

Social contract and culture

The social contract has, certainly temporarily and probably for good, undergone significant change during COVID and this is perhaps the most interesting aspect of its impact. There is no doubt that the relationship between employer and employee has changed, and mostly for the better. This has partly been caused by the fact that employers and employees have been united in the face of a common foe. There has been a common and shared purpose that has brought employee and employer together; something that has always been difficult to achieve in peacetime. 

What has changed? First and foremost employers have learnt that they can trust their employees when they are at home and out of physical and visual reach. Employees have also seen their employers behave in ways that has engendered greater trust. The net result is that a mutuality of trust has been established, the significance of which can not be overestimated. 

“People have welcomed the fact that they can work at home and not have to explain their time away”.

Second, employees have been empowered and given more autonomy. Trust and empowerment are obviously interlinked - has successful empowerment led to greater trust or has trust led to greater autonomy? A bit of both probably.

Third, greater concern has been shown for the feelings and emotions of employees, something that rarely featured prominently in business life as we knew it. Employees are being treated as people, not employees, staff or workers, and companies and their leaders have shown themselves to be very human. Leadership/company behaviour and communications have been characterised by a genuine concern for the well-being and anxiety of people. There is, of course, some self-interest in this as the following quote demonstrates, but it has nonetheless been heartening to witness:

“We are facing immediate and long-term threats to the welfare of our employees and the viability of our business and we are more aware than ever that how we care for and communicate with employees will have a lasting effect on our reputation”.

These could all be regarded as cultural shifts, even though culture is very much an office environment construct and no one is currently in the office. Culture is influenced, and created by, many different signals, but one of these is definitely your line manager and the team around you. 

“A big part of culture - and the reference point for most people – will be what it means in your team. The feeling you get from what you see, hear and observe going on around you”.

Companies we have spoken to have focused their efforts on this critical layer, supporting them and advising them on their communications and engagement with their teams,

“Going into this situation, it was clear to us that managers would be the first line of defence / the most heavily sought after information source, so we needed to equip them.  For the first time, we are doing weekly briefings with all line managers, taking them through all the need to know now; coming soon and support you can use”.

Where managers have dialled up their effort to communicate and keep their team(s) connected (not always much to dial up), they have seen that it pays. It is a new and technology-enabled form of connecting but it seems to be forging stronger connections and stronger team cohesion.

How companies rethink their employee experience and how they bring their cultures alive in this new era of remote working is going to be an interesting challenge. However, they can be guided by two key learnings:

  1. That if a company shows a genuine interest in peoples’ feelings, emotions and well-being, indeed place them to the fore, then positive engagement levels automatically follow.
  2. That as the current principal form of connection with employees, communications in all its forms (language, tone of voice, conversations, active listening, engaging content) has become a key influencer of the employee experience; and since the employee experience is a large component of culture, of culture itself.

“If people continue to work from home, comms will play a role in keeping employees connected to both culture and the bigger picture”. 

Leadership behaviour

This is a tough time to be a CEO with big - and in some cases existential - decisions having to be made on a frighteningly regular basis. Most understand that they will be judged by their leadership during this crisis. So they really don’t want to slip up.

“CEOs are conscious that this could be the defining moment of their careers – the person who steered their company through COVID-19”.

“The CEO is operating in a different way and is very conscious of how he is perceived to have navigated us through the crisis”.

Military and wartime metaphors have been rife, but there is no doubt that many CEOs have adopted a leadership style consistent with a company at war – more visible, more present, more communicative, more hands-on and more totemic.

Below is an interesting observation made by a senior consultant, well networked with CEOs,

“In peacetime, CEOs have walls of private secretaries, inner circles etc. that are often impenetrable but these have been all but abandoned”.

Those more comfortable with clear decision making processes, will have found it difficult. This is a quote from the early weeks of lockdown:

“Everything is moving incredibly quickly. You have to be comfortable with a level of uncertainty because you don’t have the time to go through a normal decision-making process”.

CEO communications, especially, have become more human, more regular, more informal, more intimate (you are allowed in the CEO’s home) and more unvarnished. They are openly acknowledging and listening to employee emotions and feelings – they are learning that it is possible to be both strong and kind.

“The CEO has become more open, accessible and personable”.

It appears that the old axiom of employees leaving their personalities at the door when they go into the office applies equally to CEOs and leaders. They are, not surprisingly, more informal and relaxed, a more authentic version of themselves, when they are at home.

One FTSE 100 corporate affairs director told me that his previous CEO once confided in him that he felt that he had to put on a metaphorical “suit of armour” before he went to work (got all the answers, infallible, in command, no visible vulnerability etc.). I am sure this is true of almost every CEO. At home they are more inclined to drop their guard and colleagues and employees see a bit more of the real them. The advice to be more authentic, that they are so often given, is naturally being adopted.

However there is no doubt that some will have found this easier than others. Natural communicators have risen to the occasion and feel more confident about being authentic. If, however, a leader is a ‘learned’ communicator, it is more likely that they will have a style that has been learned in an office environment and which they find difficult to adapt to these different circumstances, leading to possible ‘cringe’ moments.

Responsible Business and ESG

If ESG is considered more as a framework for running a responsible business for the wider stakeholder and environmental good, and less as a compliance regime, a forbidding acronym and an item for the annual report (with all the metrics that are growing up around it) then elements of ESG, and especially S (social) have entered the mainstream of business practice during the pandemic.

Many companies have found themselves almost intuitively – sometimes with the help of a few nudges in the right direction from those with an external perspective - doing the right thing and acting as responsible businesses. This is perhaps less to do with purpose and more to do with basic values and beliefs. These are not necessarily the values hanging up in the walls in reception, though some may be, but the basic human and core values of kindness, decency, honesty and compassion.

This has been most prominent in the treatment of employees, but has also applied to suppliers, customers, the communities in which they operate, the elderly and more vulnerable and, in several instances, the NHS. As one senior consultant observed:

“COVID has compelled businesses to behave and communicate through this socially cohesive lens and balance the needs of all stakeholders”....

...and another, slightly more cynically:

“Companies have been falling over themselves to prove that they are good corporate citizens”.

It is almost a return to an old fashioned sense of corporate responsibility (as epitomised by Cadbury’s) - a reminder of the fundamentals, making sure you do the basics well and look after your employees and other stakeholders. Not at the expense of financial imperatives but alongside them.

There seems little doubt, from the conversations that we have had, that the link between responsible business and reputation has become a lot more overt and accepted (the accelerator effect of COVID at work again). Otherwise why would companies be falling over themselves to prove that they are good corporate citizens? CEOs and other senior executives have all had an unforgettable lesson in the need to manage both a P&L and a business for the wider stakeholder good.

Although E (Environment) may temporarily have taken a back seat, it won’t be long before climate change and the environment (e.g. green energy) become issues again. Interestingly one partner of a leading consultancy told me that the demand for its weekly climate change newsletter has not diminished during the pandemic, which they had thought it would.  

Most companies, however, have more immediate survival related concerns - balance sheet, cash flow, recapitalisation, the future shape of their sector and their business, what the future economic landscape looks like. They also want to get a better insight into government thinking. This is the advice they are seeking from their consultancies. I recently asked one consultancy leader, well plugged in at CEO level, whether the word ‘purpose’ had cropped up in any of his conversations and the answer was an emphatic NO.

CEOs are also, we hear, more concerned about making sure that they look, to all their stakeholders, as if they have a tight grip on things. They particularly don’t want to drop a ball ‘in front of’, or do anything that might compare unfavourably against, their competitors.

But there are certainly enough influential voices out there calling for an inclusive recovery, a green recovery and a recovery that is more equitable than the recovery from the financial crisis. This is a pivotal moment and a second opportunity to get it right, one that must not be wasted. It is debate and a trend that is not going to abate despite the increasingly grim economic backdrop that is becoming daily more evident (redundancy announcement by BP, Centrica and Rolls Royce). The conversation about the type of recovery we want will not disappear.  

You would have to be a very tin-eared business leader not to register this mood music, and it is likely that more progressive leaders will want to position themselves in the vanguard rather than the tail of this movement. This probably explains why two other consultancy leaders, to whom we spoke, continue to get purpose related mandates, with companies seeking advice on how to position themselves in this rapidly changing landscape.

“As we head into recession, the people who are vulnerable will be even more marginalised. How do companies respond to this?”

My next blog will explore ESG, purpose and responsible business/sustainability issues in more detail.

Corporate Affairs and stewardship of reputation

Throughout the crisis Corporate Comms/Affairs has been very visible and very much at the sharp end of the response, as it so often is in a crisis. Big employers and other companies in the public eye, with multiple stakeholders, have had big decisions to make, almost all of which have complex comms implications and reputation risk associated with them.

“How do you shut down a shopping centre and how do you manage the potential risk in reopening?”

“The crisis has allowed the light to shine more strongly on my team. We have advised on complex positioning issues and getting the right balance of dealing with so many stakeholders”.

Where has the function added unique value: 

·        Acting as the predictive and anticipatory function it is, or should be. It is the horizon scanner and antennae of a company. In this crisis this asset has been invaluable, providing an awareness of what the company will be asked or expected to respond to, the urgency of the need to respond, the positioning statements that it needs to draw up, getting the narrative right, all in a rapidly changing situation and a world of uncertainty and very imperfect knowledge. Responding to the views and questions from the outside world very often cannot wait and it is corporate affairs who have helped the ExCo remain aware of what is expected of the company and what it can’t duck.

The advantage of this is that it encourages an organisation to think ahead and forces it to make decisions on certain things, rather than be seen to procrastinate.

“A high performing corporate affairs team is the ultimate barometer in a company – always listening and able to adjust the tone and respond”.

 ·        Making sure that every angle of every decision and every piece of communication is always considered and that reputation is always front of mind when decisions are made and statements drafted. Reputation, as a lens through which key decisions are evaluated and made, has been up there along with operational and financial considerations during the crisis (which is where it always should be).

“The lens of decision-making is how we will look in three years' time. How we behave now will shape our reputation for years to come and we need to question ourselves whether the decisions we take now hold up to scrutiny in 2/3 years' time”.

“The executives are very aware of the longer term implications of the present day and that the story could change any minute if we are not vigilant”.

·        Bringing the outside word in (eyes and ears of the organisation – the main raison d’etre of the function), decoding this means for the ExCo as well as helping leaders understand how stories are landing.

 ·        Providing regular reputation intelligence and insight.

The function has also played a key role in helping companies make a fast transition to virtual and online reporting and AGMs. With the government issuing frequent and often contradictory guidance, certainly in the early weeks as the shutters came down, the function became a valuable partner to HR, poring through this daily guidance and helping them understand it so that they could translate it into HR policy. This, again, was often done at frenetic speed.    

The advice of corporate affairs has, throughout, been focused on daily actions and communications that, in aggregate, will hopefully ensure that their company comes out the other side with reputation enhanced.

Now, as companies look slightly further ahead, corporate affairs leaders and their teams are being drawn into giving more longer term strategic advice, thinking through the reputation impact of different reopening scenarios, the effect that this crisis has had on the way they interact with and manage their stakeholders in the future, positioning and purpose discussions etc.

“Now everything is chunky and there is a whole new level of scrutiny and risk, which means that the perspective of the outside world has to be bought to bear on all decisions”.

Internal Communications

In a matter of weeks, companies have dramatically altered how they are communicating with employees and how employees communicate with each other to get work done. There has been a massive change in tone and frequency, an outpouring of support and concern, which we have regularly referenced in previous blogs. An ExCo level corporate affairs director of a large infrastructure group recently told me that:

“Gone are the six-monthly town halls, smattering of regular stories on the intranet, occasional issuing of line manager guidance and sporadic campaigns focused on driving engagement - we find ourselves communicating in real time, beaming live into people’s homes as their business changes and adapts on a near-daily basis”.

The value of strong internal comms leadership and capability has been highlighted as never before and this has prompted, certainly in a number of companies, a belated reappraisal of IC.

There is a growing consensus that it is now recognised as a key element of leadership and management practice with its own specialist skill set (not “common sense” after all) and respected for the advice and insight it can provide. The quote below, from a corporate affairs director of a company where, admittedly, internal communications was already a respected function, is not untypical:

“Internal Comms has been very strong and undoubtedly had the leading role in the management of the issue. For all of the early board level discussions it was our input on internal comms that took the lead”.

Those companies that have limited capability in this area must surely have found it more difficult to stay connected to employees and to maintain their engagement levels. It has not exactly been easy for those that do have adequate internal communications capability, as the following quote demonstrates:

“Our communicators have been challenged to keep pace with a business that is having to make incredibly complex decisions quickly and implementing changes to guidelines, policies and ways of working while attempting to continue some semblance of business operations”.

Whether this new found a) appetite for employee communications and b) dependency on (and willingness to take) advice is sustained, as a new normal emerges, will be interesting. And whether employees remain as eager to hear company news when companies move on from their current war footing and they gradually return to work also remains to be seen.

But it will be quite a difficult to retreat back from this new style and frequency of leadership comms, its unvarnished informality, vulnerability and honesty. The general consensus of those I have spoken to is that it is here to stay, if only because most leaders actually enjoy it and have seen the benefits.

“We can be fairly certain that employee communications in a post-pandemic world will be significantly different than before”.

Government and Media

In common with other elements of the corporate affairs mix, government affairs is often appreciated more in times of crisis, and the government has been the main actor in this crisis and public affairs teams have been hard at work behind the scenes. There has been a lot of negotiation going on between business and government, or more specifically No 10. For a number of companies we have spoken to, public affairs has been busy securing exemptions or critical concessions from government.  They have used their relationships to get their respective CEOs into high level meetings at No 10 and The Treasury, sometimes with the help of their trade associations (“the BRC has been on fire”), mostly without.

“Policy work and our engagement through COVID has kept our factories running as we achieved ‘strategic industry status’ in our top 20 markets”.

The need to be in the loop with government thinking and to be in a position to influence it has undoubtedly been business critical, almost existential for certain sectors, such as retail.

How you engage, as ever, is the key determinant of success. No 10 may well be more receptive to the business community since they are dependent on it to stimulate an economic recovery. But they don’t want a list of demands, they want a partner to help them navigate out of this economic crisis.

“Any business that can support their ideas around a green economy will get airtime”.

There is no doubt that in the months to come that government is going to be a key stakeholder for any large company. First, they will have to produce an industrial strategy to show that they have a plan to get the economy back on track with accompanying investment priorities. That is likely to lack coherence without the input of business – there will certainly be opportunities to shape it that companies will want to influence. 

Second, the government will be looking for partners in their rebuilding and reshaping of the economy.

Third, after this massive government bailout of business, there will be close scrutiny of business behaviour by government and any, what they judge to be, unacceptable behaviour, will be called out. This government now has a huge stake in business, and its tolerance levels are going to be set on low. It will expect some form of payback, yet to be defined, and the scope for political and reputation risk is enormous. It was interesting to hear a partner of a global communications consultancy observe that:

“A new generation of leaders will be hugely shaped by this crisis. CFOs will think about financial decisions from a reputation perspective from now on, for instance paying bonuses having taken taxpayers money”.

Few companies will be unaffected by the combination of the above, so they would be wise to consider the calibre and effectiveness of their government affairs capability and, if they have none, to decide whether they believe their trade association has the clout to give them the influential voice they want.

Media

The media were quick to draw up their list of “saints and sinners”. “It was very binary” noted one corporate affairs director. Furloughing employees whilst simultaneously asking for government assistance was an early example of a ‘sinner’. But according to the same director, media coverage has become more nuanced as they have recognised the complexity of these challenges and that these are genuinely difficult times. He believed that the “saints and sinners narrative” will evolve because “how long can you afford to be saintly – there is a cost”.

By and large journalists have been less confrontational and more charitable and it has been easier than normal to persuade them out of writing something.

If there has been a challenge, it is that journalists have so much to write about. As such there is a high bar to getting coverage, since there are so many companies with dramatic and competing news. It has been, as one corporate affairs director observed, impossible for them to keep up, particularly with their depleted resources:

“Their attention span has diminished since there is so much sector news. Their response has basically been ‘I am just too busy to look at you guys’”.

The shift towards consumption of news through online platforms has been accelerated with associated implications for the business models of news organisations and indeed their survival.

What next?

The accelerator effect of COVID-19 is evident throughout and certain things just cannot and will not be reversed. But how many of these changes are temporary (habits and behaviours don’t easily change as we know) is impossible to predict. 

Tougher times definitely lie ahead and large numbers of redundancies are inevitable. In the conversations we have had it is apparent that there is a concern that the mutuality of trust that has been established will be threatened if not lost during this period. CEOs may revert to corporate jargon at the expense of the more human and personal tone that has made such a difference, when tough decisions have to be made on financial priorities.

“How will they communicate change – if they do it as they did it in the past, using words such as 'reset', 'downsizing', etc., trust will quickly diminish”.

CEOs could do worse than study the lesson in leadership and communication by the CEO of Airbnb, when detailing layoffs in a recent email to staff. It was empathetic, but strong, and instead of using the blunt number of people affected, he articulated the mission to rebuild over the next 12 months, ensuring that everyone understood the simple and unavoidable economics. 

In a recent Jericho Chambers Conversation Amanda MacKenzie, CEO of Business in the Community, observed that “If people are allowed to understand the economics of what’s happening and there is transparency, then an organisation has the best chances of maintaining trust”.

Having established a level of expectation when the going got tough, when circumstances were easier than they are likely to become, business is going to enter a longer phase where its conduct and behaviour will be tested and scrutinised, and alleged ‘sinners’ will get named and shamed. Reputation risk will intensify in this unforgiving environment and the advice and insight of corporate affairs and its strategic communications advisors will be much needed.   

But to end on a positive note, so many of the conversations I have had have included comments such as “we mustn’t lose this, “we keep asking ourselves how we can bottle this” and, “we have shown we can change quickly”. There seems to be a will and an intent to reflect on what’s made ‘this’ possible, to learn from the positives and to figure out how to keep it and sustain it.

#covid19 #coronavirus #watsonhelsby #corporatecommunications #headhunters #internalcommunications #necessity #communications

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