More unenviable choices

7 May 2020

With the Prime Minister set to announce a roadmap out of the lockdown on Sunday, Duncan Fulton, Partner at DRD, discusses the reputational challenges Covid-19 poses to businesses going forward. 
Today, while out jogging, a friend* of mine was flipped what he took to be a topical “V-for-Victory” by a runner coming down the path the other way. On the eve of VE-Day, a heartwarming moment of shared experience in difficult times. He smiled. Only when he heard a none-too-subtle “two metres, p***k”, did he realise his error.

Many of us will be looking for a different sort of symbolism from the Government in coming days. Boris has already poured cold water on the notion that a sunny-bank holiday commemorating the 75th Anniversary of the defeat of tyranny in Europe might be the ideal moment to announce our own lockdown liberation. But instead we are expecting on Sunday a more detailed (and heavily trailed) plan for how we might gradually begin our return to what in no way can be described as ‘normal’ from Monday.

As with seemingly everything coronavirus related, a return to work presents Government, business and individuals alike with a series of unenviable choices. The Government is having to deal with the paradox that the public (or perhaps the rather smaller subset of Westminster correspondents and the Opposition) is crying out for an ‘exit strategy’ for lockdown but, if the polling is to be believed, overwhelmingly do not want an actual exit from lockdown.

Like caged animals released into the wild there is a nervousness, fear even, of taking those first steps into the outside world. Too much too soon and we risk a second peak, and a second lockdown more economically damaging, even, than the first. Too slow and we may see both the economy and a workforce atrophy at an even greater rate, with economic inactivity compounded by a growing dependence on unsustainable government support. But the feeling is brewing that something has to give.

Six weeks ago, many businesses were forced to take drastic steps – at best to adapt to the restrictions, at worst to save themselves. Decisions taken in lockdown, that might have been eminently sensible a week previously in a very different context, are viewed very differently today. Optics matter immensely in moments of such heightened tension for businesses as for governments. Take dividends. No longer are they an indicator of financial success, instead they are (rightly or wrongly) seen as a demonstration of precisely the wrong priorities – particularly if those dividends are viewed to have been ‘paid for by the taxpayer’. Or furloughs. We’ve seen the fall-out whether for fashion labels or football clubs when the use of government assistance for the lower paid is contrasted with the wealth of the owners or the salaries of the players or CEO.

Our collective reaction to the pandemic has significantly changed expectations of corporate behaviour, but with few fixed points of orientation. The “Overton Window” – the range of ideas society finds acceptable – is darting around like the pointer on a Ouija Board. But what seems consistent is that businesses are being judged on their social conduct as much as –  if not more than – their financial performance. Customers, suppliers, employees and regulators have long memories and time will tell whether making a profit is read to mean profiteering in the age of Covid.

Coronavirus has created a reputational minefield, and imminently businesses will be required to make a new set of decisions every bit as challenging as the ones that went before. If the first phase of this was about government support for business, phase two will be the test of what businesses can (and perhaps must) do to protect the health, wellbeing and livelihoods of their employees. On return to work, ‘Elf ’n Safety’ will be of a rather different order of magnitude.

The Government has made clear that it expects businesses to step up and to be responsible for implementing and for risk assessing return to work. Many sectors have been engaging positively in developing policies and protocols that reduce the risk of transmission and, as far as is possible, protect employees. We’ll need to become used to wearing PPE, staggering arrival and departure times, limitations on numbers in the office or on site, enhanced cleaning regimes and the like. But given the understandable safety concerns that many employees (and Unions) will have, the task of restarting the engines will not be straightforward. We have already heard reports of people being made to work through furlough under the threat of redundancy, and many more examples of abuse of the system will no doubt emerge. Companies that are perceived to have put their people in harm’s way by rushing them back to work run the reputational gauntlet.

Earlier this week, the Chancellor admitted that uptake of the Coronavirus Job Retention Scheme was far greater than anticipated, at more than £8billion per month costing nearly the same as the NHS budget. It seems scarcely believable that today more than half the UK’s adult population is being paid for by the state when pensioners, those on Universal Credit, furloughed staff, NHS and the Civil Service are taken into account. Managing the return to work at the same time as the likely tapering of government assistance will be a delicate and complex balancing act for Government and for businesses.  Corporate bromides that “our people are our business” will be truly put to the test as leaders have to judge what is an acceptable balance of health, financial, operational and reputational risk. Businesses that absorbed billions from the CJRS will not be thanked by the Government for immediately reaching for redundancies.

The context in which these huge decisions will be taken shifts daily as attitudes and information changes – but the consequences will be far more enduring. Just as with the Government’s handling of the pandemic, the increasing expectation for businesses is that with competence must come compassion. That said, a society and an economy paralysed by fear risks a different but no less damaging malaise.

We will commemorate VE Day tomorrow in sunny and splendid isolation, but Monday might just be remembered in time as the end of the beginning, as someone once said.

PHOTO: PA

DRD has developed a diagnostic tool to help businesses navigate their way through the reputational minefield that the response to coronavirus has created. Drawing on c60 different data-points DRD:Diagnostics helps businesses understand the key reputational implications of how they respond in this new environment. Get in touch with duncan.fulton@drdpartnership.com for more info. 

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