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Apparently, there’s a Chinese saying that “when the winds of change blow, some build walls and other build windmills. The focus for many financial services leaders this week has been on adaptation - the windmills in the saying.
1. Market Feedback
A. Accountants
Market feedback suggests accountants are in a world of pain right now. Not having worked from home much prior to COVID-19, most accountants were still very paper based, and reliant on physically present support staff. At the same time as they’ve been forced to rapidly move to working from home, client inquiries are also up.
B. Internal communication
From large to small teams we’re hearing the biggest challenge is communication – in too many channels, using different methods and more frequent messages (all at once) causing information overflow and confusion.
C. Niche investment opportunities
We’re hearing of opportunistic real estate buying and selling, some government spending on smaller scale renewables projects which might benefit both councils and investor / operators, and a growing theme of high net worth individuals and SMSF investors looking for distress opportunities.
D. Disruption, not destruction
With working from home now somewhat normal there’s an increasing ease back to “BAU”. Some of you – and us - have been experiencing lagging internet or mobile network services, but most businesses are functioning at acceptable levels. We heard earlier that the ACCC announced the easing of competition restrictions and telecom providers are now working together to effectively stop the internet from breaking. Another cooperative move where normal rules don’t apply in this new abnormal – but people and businesses are working for the greater good. Offshore experiences suggest there’s more of that to come.
E. Staff cuts
Yesterday there was confirmation from a big 4 firm, partnerships, media and smaller professional services that wages have simply been cut by 20% to ensure business viability.
F. Legal & funding implications
Legal partners – from the largest firms down to sole traders - are seeing more work or far more inbound inquiry around specific areas: estate planning, professional indemnity, corporate restructuring and funding (current facilities, refinancing and restructurings), insolvency advice, and employment law advice and, the start of conversation about litigation.
2. Management responses
Our continued conversations with CEOs and chairmen suggest rapid response communication to stakeholders have been valuable and well received by audiences, and there are increasing efforts now to plan ahead.
A. Adaptation
In financial services, a range of client and other businesses are thinking beyond crisis to opportunity. This seems particularly true where the CEO or leadership team was fast to get into BCP mode or have a fully functional COVID-19 operating rhythm. Many of you appear to have mastered that new abnormal now and be lifting your gaze to the next few horizons – weeks and months, rather than days. As you do so you’re asking which features of a new landscape we can plan around, how do we serve our clients differently or offer new services, and how do we communicate in ways that are more relevant. Some of you tell us you’ve achieved more change in the last three weeks than you did in the previous three years. That’s in the form of more nimble communication, better use of digital channels, faster operating rhythm and more innovation.
In some cases, this has been the making of teams. Under pressure most report better dynamics – more cohesion, faster responses, more openness to change and a newfound ability to execute.
B. Agility rewarded with all-time-high client engagement
Some of you are reporting dramatically increased marketing / communication performance. One client cites 3x marketing performance in the last two weeks.
Web traffic, blog reads, webinar registrations and eDMs are performing far better than ever but only where the organisation or author is very proactive - fast to publish specifically re coronavirus. These far higher levels of engagement are where you’ve had timely responses to announcements and events, very relevant content (answering unanswered questions) and in the news cycle. Examples include giving B2B & B2C audiences clarification on superannuation announcements, summaries of government business assistance or content that’s immediately helpful in responding to COVID-19.
C. Facilities & real estate
REIT managers are talking about the market pricing in social distancing. As we know that means retail is most affected, office is feeling the effects and industrial is least affected.
In office it seems more likely the SMEs asking for rent relief, but not the entire building or larger tenants. Happy days – relatively speaking – for one small tenant we spoke to yesterday who was in lease negotiations when COVID-19 fears hit Australia. Less happy for landlords having to forego significant income and renegotiate with lenders. It seems banks are very much coming to the party with varying but favourable deferred payment terms and landlords are taking these even if their security and cashflows look solid.
There’s a lot of goodwill is negotiation as far as we hear, with better tenant terms now traded off for something that has value to the landlord later (such as a rent holiday in return for retaining face rent or another year on the lease).
We hear it’s a very different story in the USA where there’s no tenant safety net and banks are not stepping up the way we’ve seen here.
D. Legal & funding
Legal partners – the largest firms down to sole traders - are seeing more work or far more inbound inquiry around specific areas: estate planning, professional indemnity, corporate restructuring and funding (current facilities, refinancing and restructurings), insolvency advice, and employment law advice and, the start of conversation about litigation.
We’re hearing, specifically around financing obligations, listed and unlisted corporates, REITs, banks, non-bank lenders, credit risk providers, developers, builders and high net work individuals assessing the legal and financial effects of COVID-19 on current facilities (bilateral, syndicated and club), current security, credit support, guarantees and other contingent instruments such as letters of credit and comfort, and proposed refinancings and restructurings. The legal topics of advice range from force majeure (where there’s still uncertainty in some cases), material adverse change, frustration, remote completion of financing transactions, VOI and finance and security transactions-related BCPs and COVID-19 response plans.
3. CEO guidance regarding Coronavirus responses
1. Command and control leadership, not consensus
Crisis management demands faster, more directive leadership. “Command-and-control” leadership is used by the military, in airlines and shipping and hospitals for a reason. It’s not necessarily the normal or desired ‘business as usual’ leadership style in financial services. That sits uncomfortably with some CEOs finding themselves being more directive than just a few weeks ago. You’ll make your own call on when to switch modes but a few things might help you know when to change gear:
- When your direct reports are clear on ‘what next’ directionally and tactically and have taken the ball and run with it (‘distributed leadership’ one client calls it)
- When your people’s speed of response and sense of urgency matches your own
- When you feel no longer have all the information you need to make the decisions but you can see that information increasingly exists and is shared among your direct reports, leading them to take back control and act without your input
2. Focus on training and development
Some of you and your teams spotted an opportunity to dial up training and development as you moved to WFH. We and our clients have seen extraordinarily high responses to well-positioned and practical training. There’s an opportunity to increase leadership team’s capability right now. Specifically, consider:
- crisis response training and testing that sets you up for more agile "BAU"
- CPD points and certifications
- Virtual meetings, video presentation and effective virtual events training
3. Be human
Real people are needed right now, and in the foreground. We’ve seen a lot of passive voice corporate communication. Some of you have changed that or see the need to. Specifically, we recommend that you:
- Use your CEO, CIO, customer or member service people as the human face of messages
- Switch from passive voice to active as part of a corporate / brand tone-of-voice overhaul and style guide update (or creation)
- Dial up the warmth in your messages – not in a cynical or saccharine way but in a real person way
- Keep messages simpler and clearer than you think you need to
Fearful audiences don’t hear well – these steps can help you help them.
4. Resources
- A webcam presentation guide
- COVID-19 financial services communication resources including CEO guidance notes
- COVID-19 Communication Response Kit (free download)
- Crisis management team set up: roles, disciplines & skills
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.
