David Burrows examines companies' responses to the COVID-19 crisis – exemplary or otherwise
In one Bristol community this year, the Easter Bunny escaped lockdown and left chocolate eggs on doorsteps. Disguised as supermarket delivery drivers, the treats were left at households displaying pictures of rainbows in support of frontline workers. The initiative wasn't picked up in the press but is a brilliant example of a company – in this case Morrisons – showing its caring side during the COVID-19 crisis. “It's genius,“ says Elizabeth Adams, managing director in strategic communications at FTI Consulting, which advises companies during crises and unexpected events.
Morrisons has also committed to pay all its small suppliers immediately (the first major supermarket to do so) and received plaudits for its treatment of staff. “We expect the days, weeks and months ahead to be very testing and we are determined to do our bit,“ says chief executive David Potts. This, it seems, is a business in touch with its customers, its suppliers and its workforce.
Now consider JD Wetherspoon – the pub chain founded and chaired by Tim Martin, who, when pubs were ordered to close, suggested staff found a job at Tesco instead. He then wrote to suppliers, according to an email seen by sustainability organisation Foodservice Footprint, asking for a “moratorium on payments until the pubs reopen“. Outstanding invoices would not be paid. In its latest financial year, Wetherspoon reported revenues of £1.8bn on pre-tax profit of £102.5m. Martin, a millionaire, signed off with the words: “Best of luck.“
Are these cases of companies that care and couldn't care less, or has fortune smiled on some and not others? Many businesses are at the sharp end – in some cases with zero revenue and no idea how to act or behave. Others have found themselves in an extraordinarily relevant place.
“I don't think when people were writing their purpose statements that anybody imagined it would be tested in this kind of scenario“
Reputational damage
For hospitality, leisure and travel businesses, it's an “unforgiving environment“, says Jon Chandler, CEO at Quiller Consultants, which specialises in reputation. The damage could last years, rather than months. At the other end of the spectrum are the supermarkets and healthcare providers. “Their products and services are part of the solution,“ Chandler notes. Their challenges are different: for many it's about hiring and training enough staff and ensuring those at work remain safe, he adds.
Wherever you look, reputations are at stake. As the FT noted recently: “Banks are exhorted to pass on rate cuts; employers to treat workers well; big companies to pay suppliers promptly. Many businesses claim to serve society, as well as shareholders. This is their chance to prove it.“ Or not.
Businesses that have promoted their purpose (see Transform, November 2017) have further to fall now that this is being put to the test. Virgin is one example. Richard Branson has long said that the company's employees are its top priority. He told Inc. in 2014: “If the person who works at your company is not appreciated, they are not going to do things with a smile.“ Virgin Atlantic employees weren't smiling when they were asked to take eight weeks' unpaid leave, though. “If Ryanair had tried something similar we would have hardly raised an eyebrow,“ noted Mark Ritson in Marketing Week. “But after two decades of marketing we expect Branson and the brand of Virgin to be better than this.“
Perhaps less surprising is that Mike Ashley (SportsDirect) and Phillip Green (Arcadia Group, Topshop) have performed poorly. That Amazon is seemingly at constant odds with unions over the safety and treatment of its workers is also predictable. Tough decisions have been made, and the public can be unforgiving. Consider the outrage when Tottenham Hotspur Football Club announced it was furloughing non-playing staff and it's easy to see why – if reports are to be believed – the heads of big UK accountants held a virtual meeting to discuss the reputational risk of taking taxpayer money to furlough staff.
Climate cynicism
In some cases, actions are reportedly more cynical. Some industries are using the current situation to postpone, water down or even wipe out environmental regulation. Campaign group Mighty Earth has identified five 'coronavirus climate profiteers' in the US: carmakers, airlines, illegal loggers, the meat industry and fossil fuel companies, including those in the plastics sector. FTI's Adams says some companies have said “some ridiculous things to protect their interests without listening to the world around them“, but remains hopeful that coronavirus won't create the cracks in climate change policies that some lobbyists are hoping for: “We've gone too far down the path.“
Indeed, in Europe, calls to push back the Single-Use Plastics Directive (banning certain items and set to come into force next year) has been given short shrift by the European Commission. Still, some environmental rules have been temporarily bent to help businesses: the plastic bag tax has been scrapped, for example, and the ban on plastic straws and stirrers delayed by six months. The Environment Agency and the Scottish Environment Protection Agency have also relaxed some of their rules. This makes sense. The worry is that given an inch, some will take a mile.
“There will be a legacy to behaving really badly. It's still easier to create villains than heroes“
Learning from mistakes
Should we also cut businesses some slack in other ways? Should the rules on reputation be put on hold, as our lives have? “I don't think when people were writing their purpose statements that anybody imagined it would be tested in this kind of scenario,“ says Chandler. Indeed, no-one really knows what they are doing and most, one hopes, are trying to do the best they can. Things will be said, actions will be executed and risks will be taken. “I'd like to think people will be more forgiving,“ says Ben Hayman, managing partner at brand purpose agency Given.
Mistakes are inevitable. Take BrewDog, the independent brewer that has repurposed its distillery in Aberdeenshire to make hand sanitiser (a product in very short supply) that will be given away to charities and the Aberdeen Royal Infirmary. However, the first batch didn't reach the standards required for use in a medical environment. Rather than down tools, though, BrewDog is now working with its local NHS Trust to produce a gel that doctors and nurses can use. “They've cocked up, learned from it and proved to be agile,“ says a former corporate responsibility director at a major facilities management company.
Experience from Hong Kong, Italy and Singapore, which were all hit early by the virus, suggests it's better to make a mistake than to wait and waste time. Consultancy Arthur D Little interviewed 25 chief executives at telecoms, transport and utilities firms in those countries and, as one CEO said: “Perfection is the enemy of the good.“
It isn't just distillers that have pivoted their businesses to help shore up critical supply chains – clothes manufacturers are also trying to plug gaps in the supply of personal protective equipment (PPE). In doing so, some are mending reputational rips made pre-COVID-19. Consider Burberry. Only two years ago the fashion brand was at the centre of an environmental storm after destroying £28.6m worth of finished goods. Now it's a hero: in a matter of weeks it has repurposed its Yorkshire trench coat factory to make PPE for the NHS. “I don't believe this is a calculated PR move,“ says Eleanor O'Leary, founder of The Better Brand Consultant. “I do think it creates a halo effect that people will remember.“
At the time of writing, Burberry has donated 100,000 non-surgical gowns and masks, and provided funding for research into a COVID-19 vaccine. Not all businesses can adapt their factories or reassign staff – for some, an injection of cash where it's most needed is the most useful thing they can do. “You don't want Goldman Sachs sewing protective gear for nurses,“ says Hayman.
What about those that haven't stepped up yet? Some will still be working through the chaos, while others are just more cautious. “Sometimes we're a bit slow to get to where we need to be, but its thoughtfulness and care that slows us down rather than a lack of want or ambition,“ admits the head of sustainability at one large high street brand.
It's still early days, and yet there are already examples of companies that care and those that care less. Will we remember who they are when we emerge from the other side? “It's all moving so quickly that I'm not sure if the good or bad stuff will have long-term impacts on a brand's success,“ says Hayman. “But there will be a legacy to behaving really badly. It's still easier to create villains than heroes.“
Diverging approaches
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JD Wetherspoon advised its 40,000 employees to work at Tesco during the COVID-19 crisis, and wrote to suppliers asking for a moratorium on payments. In its latest financial year, the company reported revenues of £1.8bn on pre-tax profit of £102.5m
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Two years ago, Burberry was criticised for destroying £28.6m worth of finished goods. It has now repurposed its Yorkshire trench coat factory to make PPE for the NHS; at the time of writing, it has made and donated 100,000 non-surgical gowns and masks
David Burrows is a freelance journalist and researcher
