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Many CEOs we’ve spoken to this week have indicated that the task of coordinating people, virtually, is more significant than they expected. It takes more time, its more error- and frustration-prone and its more difficult to 'connect' well. In part this is because on top of new technology between each of us and our colleagues or counter parties, most of us - whether CEOs, COVID-19 response teams or marketing and comms folk - don't have experience "showing up" professionally on the small screen. It sounds superficial, but it's material. Leadership and communication are needed now more than ever. "Virtual" professionalism is an acquired and essential skill. More on how below.
1. Market Feedback
As businesses continue to adapt to remote workforces, we've seen the emergence of some sector-specific themes.
A. Broader workforce and SME themes
Conversations with the public sector indicate efforts are underway to quickly redeploy stood-down private sector employees to areas of high government service demand such as Centrelink call centres.
SMEs, especially retail and hospitality, are folding overnight and restructuring or retrenching staff. Feedback from accountants, many of whom have a high number of SME clients, is “it’s brutal out there. Three times worse than the numbers in the media”, Those with highly leveraged businesses reliant on cash-cow assets such as pubs are the worst affected.
Anecdotally, the best placed businesses are those with some or all of the following: years of solid earning history, less exposed clients or customers (e.g. some B2B, logistics, online products and services, IT, some advisory professions), a solid cash buffer plus good modelling about how to preserve it, and low overheads or the ability to quickly reduce them.
B. Superannuation funds
Managing liquidity is a key concern, it would now seem, for super funds. Mass hospitality and retail layoffs have sparked higher redemptions, with estimates that as many as half the members of some funds have lost their income. The funds most challenged in their inflows are also facing the challenge of increased redemptions and investment switches, some at GFC-levels.
Funds who were quick off the mark on member communication seem to be seeing less of this, but it appears that these funds are also the funds with members who’ve made a more active fund, and investment, choice. Communication guidance is that the best tactic for right now is repeating a few simple messages about long term investing, and the downsides of switching, is frequent and in multiple formats.
Member communication via webinar and video has sparked engagement and attendance – one fund CEO cites engagement 10x more than the same channels pre-COVID-19.
Given the AUM, liquidity and operational challenges, speculation about sector consolidation is increasing.
C. Fund managers
Some unlisted asset managers are bringing forward valuations out of cycle to give asset owners – super funds and sovereign wealth funds – more up-to-date valuations.
While some trading desks are still in operation from the office (with team members sitting apart from one another), fully functioning trading desks in most cases have been set up in the home. Regular calls are being used across teams with issues being relayed to management for troubleshooting.
For staff who are still required to go into the office, registers are being used to track movements however, it was noted on one call that this was still a crude measure in comparison to some of the practices being implemented in the likes of Singapore with mobile phone tracking, with users’ permission (Trace Together).
Most fund managers we’ve spoken to are pragmatic about redemptions and have sufficient liquidity to manage.
D. Life insurance
Feedback suggests it will be difficult for advisers to move their clients to new insurance products in the current environment, as most life insurers are tightening policy conditions for new members. The industry have been relatively quick to put messages to market about pandemic cover - mostly COVID-19 – and how life and income claims are covered. For a summary of public statements email us.
2. Management responses
Despite technological challenges, siloed teams and an uncertain outlook, CEOs and leadership teams are leaning in and looking for new and innovative ways to engage with their clients. As the new normal settles in, leaders are no longer just reacting but beginning to proactively plan ahead for the next phase of this abnormal new normal.
Most firms are struggling with less than ideal practical day-to-day work arrangements, and their consequences, such as more friction in communication delivery and more siloed teams.
At the same time as lower values, fewer inbound inquiries, less revenue and reduced inflows are starting to bite. Momentum is gathering for redemptions, outflows and cost-cutting.
Some, more agile players have moved to market with new initiatives. Businesses with events or products that were already enabled online have seen less immediate disruption and we are seeing some successfully pivot their services, products and events online. Some have successfully launched new online or virtual product, typically based on plans that existed before the COVID-19 lockdown but now make sense to accelerate or progress.
3. CEO guidance regarding COVID-19 responses
1. Communication principles
If you haven’t already, we suggest you create both communication principles and specific ‘rules. You can find detailed guidance on these in BlueChip’s COVID-19 Communication Response Kit: register for that HERE.
2. Internal communication
As one contact said “It’s harder to stay on the same page when things are moving so fast and you’re more reliant on email (easily misinterpreted) or phone hookups. But coordination is vital to avoid siloed thinking, scattergun messaging, and to ensure messages are prioritised, clear and consistent.”
3. Virtual professionalism
It’s business, but not as we know it. Some – particularly former journalists and people with experience presenting on video - have managed the transition to video better than most. Others – I’m one – have not. We’ve all found that “showing up” as a leader or professional on video is a learned skill. Most of us have forgotten we had to learn the same thing in the office or meetings, perhaps a long time ago.
Guidance from Ky Chow, our media and presentation trainer draws on his broadcast and print finance media background. Contact us for Ky’s Lunch & Learn session on “Webcam presenting: top ten mistakes and how to fix them”.
4.Who to follow
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News: daily global business and finance news from the dedicated Financial Times Coronavirus section (tip: don’t subscribe to too many email alerts)
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Tomas Puyeo’s article “Coronavirus: Why you must act now" (>40m views) changed how governments globally managed this. His new article, “Coronavirus: The hammer and the dance” looks beyond the peak of deaths.
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Live country cases, deaths and recoveries data
This is an excerpt from one of our client COVID-19 CEO response briefings. For more COVID-19 response resources and guidance, visit our COVID-19 Response page.
If you’d like to discuss adjusting your communication strategy for the current times, please call us or fill out our contact form here.
