Demonstrating Corporate Responsibility During a Pandemic

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Crises reveal what organizations value. Whether a business demonstrates corporate responsibility during the COVID-19 pandemic, or fails to do so, can determine if the company and its leaders emerge from this crisis with the trust and confidence of their stakeholders intact.

Source: google.com/covid19/

Definitions of corporate responsibility have evolved from an exclusive focus on shareholder returns, to the acknowledgment by businesses of a much broader group of corporate stakeholders and range of responsibilities. Acting responsibly today means more than legal compliance and goes beyond corporate philanthropy.

At its core, corporate responsibility means meeting stakeholder expectations for responsible conduct. Meeting both the financial and non-financial expectations of its investors, customers, employees, business partners, suppliers, regulators, and the communities where it operates, helps a company to manage risk, protect its reputation, attract and retain employees, grow its markets, and sustain its financial performance.

Demonstrating corporate responsibility is a key challenge for business leaders in the best of times. As my colleague Helio Fred Garcia observes, the COVID-19 crisis comprises simultaneous crises (public health, business, economic, information, governance, social, mental health) of unprecedented scope that require a multi-dimensional leadership response. [1]

Unprecedented in its scope, the COVID-19 pandemic is an opportunity for companies and their leaders to live their values by acting responsibly.

When navigating next steps during the pandemic, business leaders should keep in mind key principles for demonstrating corporate responsibility.

 

Understand the potential impacts of your crisis response.

Responsible organizations understand the potential impacts of their actions and take steps to “do no harm.” Business leaders determining how to respond to the pandemic need to assess the potential impacts on all company stakeholders.

Well-managed organizations plan for foreseeable crises. Companies that engage in meaningful crisis planning likely had a standby pandemic crisis plan they could draw upon as they began to address COVID-19. Effective crisis management plans identify potentially affected stakeholders and catalogue relevant corporate policies for high priority scenarios. A global manufacturer’s pandemic planning, for example, would have considered the business impact of supply chain interruptions, triggers to suspend executive travel, and criteria for allowing employees to work remotely.

When evaluating next steps, companies should seek to “do no harm” by preventing or mitigating harmful impacts.

Companies without a pandemic crisis plan in place can still identify potential impacts to guide their response. Enterprise-wide impact mapping and assessment can help an organization prioritize next steps. By applying a human rights impact lens to its operations and stakeholders, [2] a hospital system, for example, might prioritize securing adequate personal protective equipment to ensure the health and safety of its healthcare workers; expanding diagnostic testing among vulnerable communities to ensure nondiscrimination in patient access to healthcare, and communicating information about the virus and medical capacity to ensure public access to reliable and timely information.

When evaluating next steps, companies should seek to “do no harm” by preventing or mitigating harmful impacts. Apparel companies that have cancelled supplier contracts for goods during the pandemic face criticism for triggering layoffs of the factory workers worldwide that make their products, often among the groups most vulnerable to COVID-19. A quick stakeholder impact assessment would have flagged the risk of harming supply chain workers. Responsible international brands have sought to protect workers by honoring their supplier contracts during the pandemic.

Similarly, companies that provide paid sick leave are protecting the health of employees, customers and the general public alike. When the California-based retailer Patagonia voluntarily closed its stores nationwide while continuing to pay its employees, its CEO and President, Rose Marcario stated, “It’s everyone’s responsibility to help stop the spread of this virus.”

“It’s everyone’s responsibility to help stop the spread of this virus.” 

− Rose Marcario, CEO and President, Patagonia Inc.

 

Anticipate changing stakeholder expectations.

Meeting stakeholder expectations demonstrates corporate responsibility and earns the trust of those who matter most to your business. All stakeholders expect a responsible organization to care about the multiple dimensions of the COVID-19 crisis and to take appropriate action.

What stakeholders expect a responsible company to do will change. The current pandemic is a dynamic situation that calls for decision-makers to adapt policies to new information. Responsible companies meet stakeholders where they are and adjust accordingly.

Customers, for example, expect essential businesses that remain open (or that reopen) to follow public health guidelines, to protect their employees, and to protect vulnerable community members. Obeying the law is the just the starting point.

On my first trip to the grocery store after a statewide “stay-at-home” order had been issued, the store had placed limits on the number of scarce items that customers could buy, like cleaning products and milk. Employees were working hard to keep shelves stocked. Two weeks later, consistent with evolving public health guidance, the store was limiting the number of customers allowed inside at once, plexiglass shields had been placed between checkout workers and customer payment stations, and all store employees wore gloves and masks. The grocery chain had also adopted an industry-wide practice reserving its opening hour for elderly customers. On my most recent shopping trip, the store had instituted “one-way” aisles to ensure physical distancing and all customers were required to wear face coverings.

Some of these measures were mandated; some were voluntary. All track what the store’s customers, employees, and community would expect a responsible grocery store to do under the circumstances based on available information.

Conversely, companies that act contrary to stakeholder expectations for responsible conduct, even if the actions are legal and contribute to the bottom line, risk losing the trust of customers, investors, and regulators. Large public corporations that secured millions of dollars of loans under the Paycheck Protection Program intended for small businesses, for example, have endured substantial public criticism prompting some companies to return the funds. The angry reaction should not have been a surprise for corporate leaders paying attention to stakeholder expectations. 

 

Philanthropy is not a substitute for responsibility.

Stakeholders expect responsible companies with the resources to do so, to give money and to tap their expertise during a crisis. Many businesses, large and small, have responded to the pandemic by providing financial or in-kind support to healthcare workers, to small businesses, and to international and community organizations addressing the impacts of COVID-19 on vulnerable populations.

Source: covid19responsefund.org/

Google has pledged more than $800 million to support small businesses, health organizations and governments, and health workers on the frontline of the global pandemic. The company’s contribution includes $250 million in advertising credits to help the World Health Organization and more than 100 government agencies disseminate information on how to prevent the spread of COVID-19. Citigroup is donating a total of $15 million to the United Nations Foundation and World Health Organization’s COVID-19 Solidarity Response Fund, to No Kid Hungry to support emergency food-distribution programs in the United States, and to international efforts in countries that are severely affected by the pandemic. The British and Dutch consumer goods multinational Unilever is contributing €100 million through donations of soap, sanitizer, bleach and food, including adapting its manufacturing lines to produce sanitizer for use in hospitals.

All of these efforts are welcome.

Philanthropy, however, does not excuse a company from acting responsibly elsewhere in its operations.

Source: www.ethicalconsumer.org

Amazon faces intense criticism for failing to adequately protect its employees from the outset of the pandemic; resisting paid sick time, hazard pay, and health benefits for part-time employees; and retaliating against a warehouse worker who protested working conditions. Since then, Amazon has enhanced its health and safety practices, hired 175,000 additional employees, and donated thousands of laptops to Seattle public school students, among other efforts. CEO and Founder Jeff Bezos announced a $100 million gift to Feeding America. The company’s philanthropic responses alone, however, are proving insufficient to meet stakeholder expectations for responsible conduct. Employees continue to protest Amazon’s working conditions and policies, and regulators have launched investigations into the company’s labor practices.

McDonald’s Corporation has donated over $3 million in food to support local communities during the COVID-19 pandemic; yet, more than half a million McDonald’s workers without access to paid sick leave are serving food nationwide.

Leading companies act and give responsibly.

 

Business leaders are called to act when government fails to do so.

The COVID-19 pandemic has triggered a crisis of government capacity and leadership. Corporate responsibility today means filling these governance gaps.

Business leaders should be prepared to address the governmental pandemic response by speaking out against harmful policies and advocating for responsible solutions.

Source: coronavirus.jhu.edu/map.html, visited 5/8/2020

Responsible companies in the United States are meeting public needs that the federal government has failed to address. Companies in many different sectors are stepping in to manufacture, purchase, and distribute personal protective equipment; to accelerate production of diagnostic tests and medical equipment like ventilators; and to disseminate accurate data on the virus and its spread. Microsoft voluntarily told its employees to work from home in support of local health authorities’ efforts to communicate the urgency of the looming pandemic in Seattle. Apple and Google are partnering to develop contact tracing technology to help governments and health agencies reduce the spread of the virus.

Stakeholders increasingly expect corporate leaders to speak out on public policy issues, [3] such as gun violence and immigration policy, [4] when government fails to act or causes harm. COVID-19 is accelerating this trend. In his annual letter to CEOs, Larry Fink, the chairman and CEO of BlackRock, the world’s largest asset manager, noted last year that “stakeholders are pushing companies to wade into sensitive social and political issues — especially as they see governments failing to do so effectively.” Fink called on CEOs to demonstrate leadership and corporate commitment to “to the countries, regions, and communities where they operate, particularly on issues central to the world’s future prosperity.” No issue meets these criteria right now more than the multi-dimensional COVID-19 crisis.

CEOs that understand and anticipate the potential impacts on of all of their company’s stakeholders are not rushing to reopen.

Business leaders should be prepared to address the governmental pandemic response by speaking out against harmful policies and advocating for responsible solutions. Consumer product brands have had to correct inaccurate information about disinfectants. Many businesses in the United States must now decide whether to reopen against data-driven public health guidance. CEOs that understand and anticipate the potential impacts on of all of their company’s stakeholders are not rushing to reopen.

Unprecedented in its scope, the COVID-19 pandemic presents a unique opportunity for companies and their leaders to live their values by acting responsibly.

 

Logos Senior Advisor Anthony Ewing counsels executives on corporate responsibility and works with clients to establish and strengthen crisis management programs. He teaches a graduate seminar on corporate responsibility at Columbia Law School.

 

Notes

[1] Helio Fred Garcia, “Leadership, Communication, and COVID-19,” (Mar. 25, 2020) https://logosconsulting.net/leadership-communication-and-covid-19/.

[2] Anthony Ewing, “Integrating Human Rights into Crisis Planning,” A Good Practice Note endorsed by the United Nations Global Compact Human Rights and Labour Working Group (6 October 2015), https://www.unglobalcompact.org/docs/issues_doc/human_rights/Human_Rights_Working_Group/crisis-planning-GPN.pdf.

[3] Aaron K. Chatterji and Michael W. Toffel, “The New CEO Activists,” Harvard Business Review (January–February 2018), https://hbr.org/2018/01/the-new-ceo-activists.

[4] Anthony Ewing, “Business and Human Rights: Lessons for Managing the Trump Presidency,” blog post, February 13, 2017, https://logosconsulting.net/business-and-human-rights-lessons-for-managing-the-trump-presidency/.

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PRESS RELEASE: Global Crisis Advisor and President of Logos Consulting Group, Helio Fred Garcia, on Meat Processing Crisis

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FOR IMMEDIATE RELEASE:

Global Crisis Advisor and President of Logos Consulting Group, Helio Fred Garcia, on Meat Processing Crisis:

“Corporate Negligence”

NEW YORK (May 7, 2020) – “The meat processing crisis is an example of leaders knowingly putting their people at risk,” said Helio Fred Garcia, Global Crisis Advisor and President of Logos Consulting Group. “This is a combined failure of public policy and business leadership. The nation and businesses need to do better.”

For media personnel interested in interviewing or featuring Helio Fred Garcia as a crisis expert commentator, please reach out to Maida K. Zheng, [email protected] or at 315-368-4287.

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Helio Fred Garcia, known as the Global Crisis Advisor, has helped leaders build trust, inspire loyalty, and lead effectively for more than 40 years. He is a coach, counselor, teacher, writer, and speaker whose clients have included more than 400 CEOs of some of the largest and best-known companies and organizations in the world, in dozens of countries on six continents.

We focus on our clients and tailor our services to their needs.

Learn more at www.logosconsulting.net.

*Featured photo source: https://www.beefmagazine.com/livestock/covid-19-crisis-forces-partial-closure-jbs-souderton-plant*

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Dispatches in the Time of COVID-19: Leave Your Empathy at the Door

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“When you do the common things in life in an uncommon way, you will command the attention of the world.”

~ George Washington Carver

So: You’re wearing a mask and keeping a socially responsible distance. You’re staying safe but taking long daily walks in the nearly empty streets of New York City to keep yourself healthy and sane. You peer into the dark, empty storefronts as you stroll along. You arrive at the place you always found familiar and comforting; it now looks abandoned and forbidding. There is no human to greet you, only a few words on a single page attached to the front door. Almost every door on every street has a similar sign.

As the days of shutdown have dragged on, I’ve become intrigued by these signs, snapping pictures of at least 100 of them. I’ve read the words again and again. They are breathtaking in their sameness, leading me to the question: How much difference can a few words on a simple sign possibly make?

Businesses reopening in the aftermath of the current crisis may soon find out.

Sometimes the message on the door is just one word – “Closed.” Not terribly helpful, is it? That feels more like the end of a relationship than a reassurance that you and your spot will be reunited in the future.

While heavily trafficked commercial chains may have a following who look for convenience alone, a cozy neighborhood haunt cannot exist without building an emotional bond – appreciation, affection, even love – with its customers. When that business closes indefinitely, or its hours are suddenly and severely curtailed, anxious customers need to see words of gratitude, emotion, and empathy: “We thank you.” “We appreciate you.” “We miss you.” “We understand what you are going through because we are going through it, too.”

Empathy should start right there at the front door.

Surprisingly, even in these difficult times, when those words of connectivity matter most, when customers expect to find love letters from deeply grateful owners, they find crisis boilerplate instead, often written in haste, dashed off as a formality and perhaps copied from a neighboring establishment. Even worse, sometimes, the desired words do not appear at all.

That strategically placed sheet of paper – occasionally drafted with the assistance of a lawyer or a communications professional – may be instructive but it’s not terribly personal. Or authentic. Or meaningful.

That kind of corporate jargon often makes me stop reading – I imagine you know the phrases: “our top priority,” “we are closely monitoring,” “we are committed to …”  But owners use them because they know they need to communicate quickly with customers coming to the door, and they want the message to sound official. Professional communicators reading this will understand that the sign on the door is a kind of stand-by statement to let the entire world, including those critical customers, know what is going on in that moment and what they can expect while the crisis – and temporary closure – continues.

As my colleague, Helio Fred Garcia, has written in The Agony of Decision: Mental Readiness and Leadership in a Crisis, an insightful guide to crisis decision-making (even during one not of your own making), critical communications like that sign on the door should embrace five fundamental elements:

  1. ACKNOWLEDGMENT – a statement of awareness that something has happened.
  2. EMPATHY – an expression of empathy or sympathy to those who are hurting or inconvenienced – and in COVID-19 times, everyone is hurting and inconvenienced.
  3. VALUES – a declaration of the business’ values – including how much that business values those customers.
  4. APPROACH – a summary of the actions the business is taking in the wake of the crisis.
  5. COMMITMENT – a statement that sets future expectations, i.e., “We will keep you up-to-date as we hear any important news and will let you know when we can reopen. We will be here for you online even while we are closed.”

[For a quick summary of these elements, see the Leadership Lesson on Standby Statements]

In all fairness, I’m sure these independent owners also mean to communicate how much they love and miss their customers. But their words – crafted out of necessity and in great haste from a template – don’t quite resonate. They don’t quite say: We are closed, but we miss you and are still there for you.

Contrast those signs with recent updates that a certain coffee company has posted on Instagram – the digital front door for many contemporary consumers. Note the likes and comments.

So, for owners of shuttered businesses – small or large, mighty or nimble – here are two important questions you should ask yourself:

1. How can you communicate your message in conversational human language, rather than boilerplate jargon? You’re dealing with ordinary humans. Why not sound like one?

2. How can you include a message of gratitude at the very top of the page? Owners should express their sincere thanks to the customer who has arrived at the door in the first sentence or two. What would happen if the language of the sign started there? Only good things, I promise you.

Here are some signs that hit the mark beautifully. Which ones do you like best?

One last thought: many of the signs that I see on the doors have been left there unchanged for weeks.

Dear shop owners— It’s not too late to change that sign!

Love,

Your Devoted Customer

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Five Principles for Maintaining Trust When Making Unpopular Decisions in A Crisis

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The COVID-19 pandemic has been a battle not only for lives, but also for hearts and minds.

We’re in a crisis that no single sector or business is immune to. Every organization, from the family-owned pizza place in your neighborhood to a trillion-dollar corporation, is affected and faced with threats to its viability. Companies must also survive the court of public opinion through effectively responding to and communicating about the crisis.

Recent communications by Marriott and Macy’s and the consequences provide an instructive comparison:

The Wall Street Journal reported on March 17 that Marriott had begun furloughing tens of thousands of its employees, which later was confirmed by the company. Two days later, the company released a video update from its President and CEO Arne Sorenson on Twitter. Sorenson thoughtfully and authentically explained the significant impact that COVID-19 has had on Marriott’s revenues – a more severe and sudden financial impact than the 2009 recession and 9/11 combined. He then articulated a number of steps the company was taking to maintain financial viability going forward.

He closed by empathizing with his employees and highlighting his commitment to them:

“There is simply nothing worse than telling highly valued associates, people who are at the very heart of the company, that their roles are being impacted by events completely outside of their control. I’ve never been more determined to see us through than I am at this moment.”

“Leadership at its finest,” someone commented under the Twitter video, which had been viewed 915.5k times by the time of writing this blog. Forbes applauded Mr. Sorenson for demonstrating “truly authentic leadership.”

Marriott President and CEO Arne Sorenson delivers COVID-19 update

 

Conversely, on March 30 Macy’s announced in a press release that it was furloughing most of its 125,000 employees:

“Across Macy’s, Bloomingdales, and Blue Mercury brands, we will be moving to the absolute minimum workforce needed to maintain basic operations. This means that the majority of our colleagues will go on furlough beginning this week.”

They contextualized this decision by referencing a decline in store sales:

“While the digital business remains open, we have lost the majority of our sales due to the store closures.”

Like Marriott, Macy’s also announced other mitigating measures to conserve cash such as cutting executive salaries and freezing new hires.

For public companies, the individual stock price is a barometer of trust and confidence. While under the best of circumstances stock price indicates trust and confidence, it is arguably more of a critical matrix when people are anxious and hyperresponsive to changes in the pandemic.

On the day Sorenson released his video update, Marriott was at $66.80 per share, up about 4.7% from the day before. On the day of its announcement, Macy’s saw its shares down about 8.5% from the closing price of a day before, even though Macy’s essentially implemented similar business measures.

So, why did Marriott and Macy’s end up in such different places when pretty much doing the same things?

There are five best practices that determine whether companies win or lose trust when implementing unfavorable actions in catastrophic situations:

      1. Actions alone do not communicate your intent. They must be combined with communication.

Actions should always go hand in hand with communications, otherwise you leave room for unintended interpretation. Communicating your intent can frame your actions in a persuasive, positive light. Failure to frame your intent will result in audiences judging your actions alone.

      2. Reset expectations when previous ones cannot be met.

Trust is the natural consequence of promises fulfilled, expectations met, and values lived. When a business is no longer able to operate as usual, it is unrealistic for an organization to fulfill expectations that were set in ordinary circumstances. However, stakeholders’ expectations will remain the same unless the new circumstances that requires new expectations are communicated clearly.

      3. When delivering bad news, be direct, transparent, and specific.

For dramatic actions to be understood by those who matter, the magnitude of the negative event in play needs to be communicated in full and clear terms. Do not use euphemisms. Be sure to show empathy.

      4. Make connections, not announcements.

If possible, put a face to the communication and make personal connections with your audiences. Once a human connection is made, even the most undesirable decisions become more palatable. Sorenson started the video by acknowledging his “new bald look” as a cancer survivor. By exhibiting vulnerability and humility, he bonded with his audience on the emotional level. He then empathized with his employees. Macy’s, however, gave a straightforward, dry business update.

      5. It’s never about you; it’s about them.

It is important to not think or frame the decision from the perspective of the leader or the organization in a crisis. The I/me/we/us frame of reference abandons the opportunity to demonstrate care and empathy and can easily be seen as irresponsible or self-serving. For example, Macy’s simply stated that it was furloughing employees to a basic operation level to support digital sales. However, employees don’t care about “maintaining basic operations;” they care about being able to pay rent and buy food.

It’s difficult to frame any unpleasant decisions from the perspective of stakeholders when the actions will at least in the short term hurt them. However, tapping into a higher value, inspiring a sense of duty and togetherness can help bring people to your side. But this has to be done in a candid and authentic manner, as Sorenson did in the video update.

The best times are often forgotten. Leaders and organizations are remembered for what they’ve done in the worst ones. Therefore, it’s critical for leaders to remember these five principles when they need to take unfavorable actions and deliver bad news. These best practices not only protect companies from losing their case in the court of public opinion, but also provide an opportunity to win more hearts and minds.

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Survival of the Fittest: How Companies Need to Adapt in the COVID-19 Crisis

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“It is not the most intellectual of the species that survives; it is not the strongest that survives; but the one that is able best to adapt and adjust to the changing environment in which it finds itself.”

— Leon C. Megginson

The COVID-19 pandemic has provided a crash course on adaptability.

Our ability to adapt is a testament to the resiliency of the human spirit as millions sit inside their homes and wait for the storm to pass. Many have had to adapt to working from home and caring for or supervising children while managing logistics that were mandated almost overnight. Others have had no choice but to grapple with the harsh realities and risks of being an essential worker. Many are furloughed or unemployed, trying to figure out their next steps and future options in an uncertain world. And almost everyone was faced with steep and sudden learning curves, whether setting up a home office effectively or serving as teaching assistants for their children’s online learning.

Adaptability is essential for organizations. Companies and enterprises that have not adapted well, or adapted fast enough, have suffered serious consequences. Some have succumbed already, and others will not survive. Many companies that adapted quickly are still viable, but will need to re-invent and reconfigure to sustain that viability over the long term. However, organizations that have adapted in meaningful ways that demonstrate caring are doing more than just surviving.

In the midst of deep uncertainty, a number of companies have already responded to the COVID-19 challenge and distinguished themselves by shifting their services and product lines to meet the highest-priority needs of their consumers, employees, and communities. For example, alcohol distilleries and major beauty and health companies, Sporting apparel companies, such as Fanatics and Bauer Hockey, have been producing gowns, masks, and face shields. Walk-in food outlets like Panera Bread, and even specialty chains, such as Edible Arrangements, have shifted their operation models to grocery delivery services. And to meet the needs of home-bound exercisers, gym chains like Planet Fitness offer livestream workouts that anyone, member or nonmember, can access for free.

These are just a few examples of companies that recognized a need, both internally and externally, and used their ingenuity to adapt in unexpected and creative ways. As a result, these organizations are not only more likely to survive this immediate crisis, but will also bolster their reputations and increase their competitive advantage going forward.

Adaptability is a leadership discipline. The ability to be nimble and adapt effectively during a crisis is essential not only for survival, but for opportunity and growth. Failure to adapt when circumstances change will cost you and your organization greatly.

As the COVID-19 crisis continues to evolve, leaders and organizations need to be on adaptation alert as circumstances change. And when the pandemic finally ends, organizations must be prepared to adapt yet again in a post-COVID-19 world, whatever that will look like.

In studying companies that have adapted both well and poorly during the COVID-19 pandemic, I’ve identified several questions that can serve as a Logos Best Practice rubric to help guide thinking about how to adapt effectively.

When confronted with changing circumstances, ask:

  • What is required for your organization to continue to operate? What level of revenue is required to cover costs? What tools or resources do you or your employees need to continue to function?
  • What is your mission? What is your organization’s goal? What are you designed to do? Does your mission need to evolve in the present moment?
  • What are your core values? What values are embedded in your mission, culture, and business model?
  • Whom do you serve? Who are the stakeholders that matter most to your organization? Are there new or different stakeholders you should be serving?
  • What are the urgent or important needs of your stakeholders? In this moment of crisis, what matters most to your stakeholders? What do your internal and external stakeholders need?
  • What do those who matter most expect from you? How do your stakeholders expect you to live your mission and values? How have their expectations changed amid the crisis?
  • What is your unique competitive advantage? What can your organization uniquely offer? How can you fulfill your mission in a way that provides an essential or important product or service during this crisis?

The answers to these questions will help you think about how to adapt in ways that not only support short-term survival, but also pave the way for long-term success.

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A Tale of Two Leaders: Cuomo v Trump

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Leaders are judged based on how they deal with their biggest challenges.

In the COVID-19 crisis we see a contrast of leaders so stark that it can serve as a leadership laboratory for future generations to study.

New York Governor Andrew Cuomo shows a steady, compassionate, and urgent tone as he informs New Yorkers and the broader world about the reality of COVID-19 in his state. His briefings are direct, honest, consistent, and clear. He sprinkles his commentary with expressions of concern for health workers and hospital patients, he invokes his parents, his brother, and his daughters. And he tells the truth.

President Donald Trump, on the other hand, shows none of these qualities. He bungled the first two months of the pandemic in the U.S. He denied the severity of the virus and downplayed the risk of contagion. He alternates between the rosy – churches full at Easter – and the gloomy – social distancing for much longer. There is still not a whole-of-government response. Rather, there are fragments of a government response. He leaves it to governors to figure out supply chains, even as governors confess that they’re bidding against each other – and the federal government – to secure desperately-needed medical equipment.

President Trump heaps praise on himself and expects others to do as well. He recently bragged during a COVID-19 press briefing that he was the most popular person on Facebook.

Governor Cuomo, who, according to Politico, has a “long-standing revulsion to social media,” has nevertheless “rapidly emerged as an internet star.” (Earlier this week, #Cuomosexual was trending on Twitter.)

President Trump contradicts his own public health experts, who then have to clean up the mess in his absence. He improvises on the existence of testing equipment, medical equipment, and miracle drugs that don’t exist. He violates every principle of effective leadership in a crisis.

Winston Churchill admonished, “You must look at the facts because the facts look at you.” President Trump ignores the facts in front of him and invents new ones.

Trump insists on calling COVID-19 the “China Virus” or “Chinese Virus” even though the World Health Organization advises against naming diseases for a particular location because of the stigma involved. And last week the FBI warned about a wave of hate crimes against Asians and Asian-Americans in this country.

Since the pandemic started my team and I have been studying the best and worst practices in communicating in a COVID-19 world. The best include:

  1. Begin all communication, whether written or verbal, with a statement of values: Don’t dive directly into the facts. Create an emotional connection.
  2. Show you care. Calibrate communication with empathy.
  3. Be direct, no euphemism: It’s confusing and causes unnecessary stress.
  4. Tell the truth, the whole truth: Your stakeholders are in this for the long term.
  5. Address all relevant dimensions of the crisis: A narrow lens is inadequate.
  6. Remember that expectations are dynamic. Calibrate current expectations.
  7. Communicate through multiple levels and channels. Be consistent.
  8. Align on values: Provide detail appropriate to each level and circumstance.
  9. Convey a positive attitude: Convey urgency short of provoking panic.
  10. Express emotion, vulnerability, and humility. Effective leaders do.

Governor Cuomo scores on all elements of this scorecard. The President, sadly, misses the mark. Other leaders can learn from both.

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Court-Martialed by Public Opinion: When the Navy Steered Wrong

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Written by: Maida K. Zheng and Raleigh Mayer

When you have to kill a man, it costs nothing to be polite.

– Winston Churchill

I salute the United States Navy.

The Navy – and the other branches of the U.S. military – serve the nation every day, protecting every American’s right to freedom, a privilege we often take for granted.

But right now, the Navy is undergoing a reputational nightmare, and it’s one that could have been avoided.

Capt. Brett Crozier, the commanding officer of the USS Theodore Roosevelt, was fired after an email he authored regarding COVID-19 expressing his concerns about the potential – and very likely – harm it posed to his ship and its sailors.

The Acting Secretary of the Navy, Thomas Modly, spoke to reporters about his decision to fire Crozier at the Pentagon in a press conference April 2, 2020. Modly stated the reason Capt. Crozier was fired was the Navy’s loss of confidence in Crozier’s ability to lead as well as the disclosure of an internal memo to the media. Modley suggested that the leak occurred because of Crozier’s carelessness in copying too many people on an email that should have been classified, demonstrating poor risk management and poor judgement.

Navy Brass Felt Blindsided by Fired Carrier Captain's Emailed Appeal

Modly would not tell reporters who was copied on the correspondence, stating “I will not comment on that,” during his Pentagon press conference. That may have been one of his first mistakes. When communicating an issue, a “no comment” response will always be met with suspicion and conveys defensiveness, and the refusal may be interpreted as guilt.

To be clear, the reputational damage to the Navy was not necessarily because of the firing itself, which may or may not have been warranted.  The outrage is due to the manner in which Modly communicated that decision.

Effective communicators know that the framework for guiding the choice, style, and timing of a message should always start with the following question: “What would reasonable people appropriately expect a responsible organization to do in this situation?”

By focusing on damaging hypotheticals such as “[the leak] unnecessarily raised alarms with the families of our Sailors and Marines with no plan to address those concerns” Modly accidentally communicated a lack of empathy toward the seriousness of the situation and what the families were likely already feeling (anxiety).

Modly questioned the professionalism of Crozier, who at that point was literally seen as a hero by service members for risking his career for their safety.  “I could reach no other conclusion than that Captain Crozier had allowed the complexity of his challenge with COVID breakout on the ship to overwhelm his ability to act professionally,” Modly said.

Had Modly employed the best-practiced principle of crisis communication and asked himself “what would reasonable people expect a responsible organization to do in this situation” he likely would have realized how critical (for the sake of the Navy’s reputation) it was for him to publicly state that this was an unprecedented situation, and support Crozier because reasonable people expect the Navy to care. Showing you care does not mean you have to give up on good order and discipline. Reasonable people understand that if a policy or order was broken, there will be consequences.

In every crisis there is opportunity, and when this story broke, the Navy had an opportunity to back Capt. Crozier and explain the actions that had been taken and planned to be taken to ensure the service members would be safe and that the mission would not be abandoned. After all – those plans were already in motion according to Modly. Instead, they punished the person the public had already fallen in love with and thus appeared callous in doing so.

With all that said, below are some tips for success in a situation such as this.

  1. Reasonable people expect an organization to care, first and foremost.  The single biggest predictor of loss of trust in a crisis is the perception that you don’t care.
  2. First mover advantage matters. Whoever is first to define the crisis, motives, and actions is the one who controls the interpretation of the event.
  3. A well-structured stand-by statement, prepared ahead of time for adaptation, is key in ensuring you are communicating effectively during a crisis.

Logos Consulting Group provides the following template for the best possible outcome in tough, touchy, sensitive situations:

  1. Acknowledgement. Open by stating awareness of the event or issue. Do not use euphemisms, which are confusing to audiences, especially those under stress.
  2. Empathy. If there are victims or potential victims, express empathy.
  3. Values. Describe the organization’s values that will give context to the response to the crisis.
  4. Approach. Describe ways the organization is handling the response to the crisis, including what has been done or what is under way.
  5. Commitment. Outline the substantive or procedural commitments you can make now.

On Sunday, April 5, several media outlets confirmed that Capt. Crozier tested positive for COVID-19; the Navy declined to comment.

On Monday, April 6, reports of a leaked speech of Modly speaking to Sailors in Guam was released via several media outlets.

“If he didn’t think, in my opinion, that this information wasn’t going to get out into the public, in this day and information age that we live in, then he was either a) too naive, or too stupid to be a commanding officer of a ship like this,” Modly said to the USS Theodore Roosevelt crew.

The speech continues in this manner with Sailors audibly yelling “what the F***” in the background.

Additionally on April 6, Modly wrote a response to a New York Times op-ed where Theodore Roosevelt’s great-grandson (Tweed Roosevelt) called Capt. Crozier a hero. In his response, Modly said he has the utmost respect for the Roosevelt family, but that Tweed is wrong — “he simply doe not have access to the relevant facts that led to the captains dismissal.” The letter was deleted shortly after it went live.

The Golden Hour of Crisis Response for communicators and medical professionals describes the urgency to “stop the bleeding.” Each day the Navy delays in effectively communicating and showing true empathy causes more and more reputational harm…and bleeding.

We truly hope Capt. Crozier and his crew recover. Fair winds and following seas.

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Maida Kalic Zheng is a fellow at the Logos Institute for Crisis Management and Executive Leadership, where she helps corporate leaders maximize their presence, enhance communication, and become more sophisticated at managing their relationships and reputations.

 

Raleigh Mayer, the Gravitas Guru and principal of Raleigh Mayer of Consulting and Senior Fellow at the Logos Institute for Crisis Management and Executive Leadership, helps leaders elevate presence, enhance communication, and become more sophisticated at managing their relationships and reputations. She is an advisor, coach, educator, and speaker, serving large corporations, private firms, and individual executives.

 

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Leadership, Communication, and COVID-19

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Leadership, Communication, and COVID-19

By Helio Fred Garcia

As the COVID-19 Pandemic continues to  grow, Logos Institute for Crisis Management and Executive Leadership has been advising clients and carefully studying communication by leaders across a range of sectors and forms of organization.

We have reviewed thousands of communications by CEOs, university presidents, NGO executive directors and secretaries general, and public officials. And we have identified patterns that help leaders and their organizations make smart choices and avoid inadvertent self-inflicted harm.

Seven Crises in  One

One of the foundational principles of effective crisis management is to name the problem accurately and to understand the true scope and likely risk of the crisis.

I believe that the COVID-19 crisis is actually seven crises in one. Think of these as seven different dimensions of the crisis. There’s a danger that a leader might be so focused on any one of the dimensions that he or she will miss the need to address the others. The seven dimensions of COVID-19 are these:

  1. Public Health Crisis: At its core COVID-19 is a public health crisis. Half a million people worldwide have gotten sick; tens of thousands have died. More will get sick and die before things get better. But  now in the United States the public health crisis includes a healthcare delivery system that is being strained to the breaking point. As hospitals in epicenters begin to fill up, there’s also a shortage of medical equipment and personal protective gear. Health workers are at risk, as are other patients.
  2. Business Crisis: COVID-19 presents a business problem for all forms of organizations. There is a cost impact, for most organizations a negative one. There  is a revenue impact, mostly negative; for some potentially catastrophic. There is disruption of operations. There is an HR impact.
  3. Economic Crisis: At the same time there is a significant economic crisis underway. The risk of falling into a major recession, very low two months ago, now is quite high. The markets have exhibited unprecedented volatility. Economic uncertainty is wearing on people and institutions.
  4. Information Crisis: From the beginning of the pandemic there has been significant incorrect information, incomplete information, and in some cases intentionally misleading information in the information ecosystem. This information crisis leads to significant misunderstanding about who is at risk of contracting the illness, who can transmit it, and what precautions are appropriate.
  5. Competence of Government Crisis: Not just in the U.S., but initially in China, Iran, and other nations the initial responses were bungled and the virus  spread. In the U.S. we have yet to see a whole of government response. Rather, we’ve seen a fragments of government response. Only in the third week of March, and the third month of COVID-19 in the U.S., are there sufficient tests and testing sites. But there is insufficient personal protective equipment for health workers, and a shortage of hand sanitizers, rubber gloves, and masks in retail stores.
  6. Social Crisis: People’s lives have been upended; many people are losing or at risk of losing their jobs. Supermarket shelves are bare. Many companies have ordered employees to work from home; schools are closed or have gone to virtual learning. But there has also been a rise of incivility, insult, and violence against people who have been stigmatized. President Trump’s insistence on calling COVID-19 “China Virus” or “Chinese Virus” has led to a wave of hate crimes against people perceived to be Asian or Asian-American.
  7. Mental Health Crisis: Human beings are social animals, and social distancing is having an effect. Compound this with the fear of the illness, the rising rate of infections and fatalities, and the other dimensions of the crisis, people are fraught. They are fragile. And they need extra care. New York State Governor Andrew Cuomo has asked for mental health professionals to volunteer to work with people not presently under their care to begin to meet this mental health need. I expect other governors will do the same.

 

Everything is Different

The unprecedented scope of the crisis makes it difficult to predict what will happen next. This crisis is unlike others. Among the differences:

  • This is unlike prior pandemics. This is the first global pandemic in a social media world. Recent pandemics were geographically contained. Middle East Respiratory Syndrome was mostly confined to the Republic of Korea. Ebola was contained in the United States, and our military and public health experts were able to contain it in West Africa. And this is the first truly global pandemic in the lifetimes of most people in leadership positions.
  • This is unlike natural disasters. Most organizations are ready or can adapt to natural disasters such as hurricanes, tornadoes, earthquakes, and floods. But those are generally geographically confined and are sudden but short in duration. COVID-19 is widespread and will continue for a very long time.
  • This is not like ordinary corporate crises. Most corporate crises are limited to a particular company, sector, or geography. But this one affects every organization. And unlike most corporate crises, this one has the additional dimensions of public health, economic risk, information challenges, competence of government, and social dislocation.
  • The situation is constantly changing. The scope of contagion, the government and society’s response to it, and our understanding of risk to ourselves are in constant flux. In a matter of days we saw an escalation from no large crowds to no crowds at all to stay-at-home orders to full lock-down orders.
  • This is fundamentally reshaping our understanding of work. As millions of American workers learn how to work from home, and as companies experiment with different modes of delivering products and services, the likelihood of a return to pre-COVID-19 conditions is not clear.

Crisis Response Best Practices

Most ineffective crisis responses begin with leaders asking some version of What should we do? Or What should we say? The challenge with this kind of question is that it focuses on the we – on the entity or leader in crisis. This results in the consideration of options that may make the leader in midst of crisis feel less vulnerable. But it is unlikely to lead to what is necessary to maintain trust, confidence, and support of those people whose trust, confidence, and support are critical to the organization.

What is needed is a different kind of thinking that begins not with the I/me/we/us but rather with the they/them – with the stakeholders who matter to the organization. The leadership discipline of mental readiness – the readiness to shift frames of reference from the first person — I/me/we/us — to the third person — they/them — makes all the difference.

And that’s because of the way trust works.

A common goal for most organizations and leaders in crises is to maintain the trust and confidence of those who matter – shareholders, employees, customers, regulators, residents, citizens, voters, etc. Trust is what makes other elements of competitive advantage possible, from stock price to employee morale and productivity to support of  regulators.

Trust, in turn, is the consequence of three related but slightly different things:

  1. Promises fulfilled. These can be explicit promises, or implicit promises such as in a brand identity. If we are seen to break a promise, trust falls.
  2. Expectations met. These can be expectations we set ourselves, such as by making promises. Or they can be expectations set by law or by government order. Or they can be expectations set by society. If we fail to meet expectations, trust falls.
  3. Values lived.  When those who matter to us experience us as living our stated values, the result is trust. If those who matter to us experience us as not living our stated values, trust falls.

And one of the patterns we notice is that it is much harder to restore trust once it has been lost than to maintain trust before it has been lost.

Asking What should we do? runs the serious risk of failing even to consider stakeholders’ expectations. Worse, it further risks the leader becoming stuck in his or her own perspective, in I/me/we/us. Hence, such crisis whoppers as BP CEO Tony Hayward’s “I’d like my life back,” or even President Richard Nixon’s “I am not a crook.”

Most crisis response failures can be traced back to the ultimate decision-makers focusing on their own frame of reference rather than on their stakeholders.

The right question to ask when determining the appropriate course of action in a crisis is not What should we do.

Rather, it is this: What would reasonable people appropriately expect a responsible organization or leader to do when facing this kind of situation?

For any stakeholder group we can answer the question, What would reasonable members of this stakeholder group appropriately expect a responsible organization or leader to do? to a very granular level. To the level of all employees, or only those employees in this one facility, or only those employees who were present when something happened. We can inventory those granular expectations  for each stakeholder group, and we can then work to fulfill those particular expectations.

But regardless the particular expectations of any given stakeholder group, there is a common expectation that applies to all stakeholder groups all the time:  In a crisis, all stakeholders expect a responsible organization or leader to care.  To care that something has happened; to care that people need help; to care that something needs to be done.

What it means to care may be different from crisis to crisis, or from industry to industry. What it means to care in the early phases of the crisis may be different from what it means to care in the later phases of the crisis. But that we need to care doesn’t change.

The single largest predictor that trust will fall is the perception of indifference. And silence, when there is an expectation of caring, is interpreted by stakeholders as indifference. And it gives our adversaries, critics, media and social media, and trolls the ability to define us as uncaring, or incompetent, or as lacking integrity.

Applying Best Practices to COVID-19 Communication

As the Logos Institute team has studied institutional response to COVIID-19, we have derived these  lessons applying the principle of caring to the pandemic.

  1. Begin all communication, whether written or verbal, with a statement of values, or belief, or intent, or motivation. Don’t dive directly into the facts. Audiences are far more likely to read or listen, understand, and remember when the leader creates an emotional connection first, and that begins with the statement of values.
  2. Show you care. Calibrate communication with empathy.
  3. Be direct: No euphemism. Euphemism is confusing to audiences, especially when under stress. If an employee has died because of COVID-19, say so.
  4. Tell the truth: Avoid misleading half-truths. Remember that you’re in this for the long term. And eventually you’ll need employees to continue to want to work for you, and customers to want to do business with you. If you know that layoffs are likely, and you’re asked whether there will be layoffs, it may be tempting to say something literally true — “At this point there is no plan to lay people off.” This may be true, but the question was not about whether there is a plan but rather about whether there would be layoffs. A better response would be “We haven’t made a final decision, and we will do whatever we can to protect employees, but layoffs are a possibility.”
  5. Address all relevant dimensions of the crisis: public health, business crisis, economic crisis, information crisis, competence of government crisis, social crisis, and mental health crisis. It may be tempting to stay in a single frame, say, business crisis. But your stakeholders are experiencing all seven dimensions of the crisis.
  6. Remember that expectations are dynamic. Yesterday’s expectations may not be helpful today. Calibrate against current expectations.
  7. Communicate at multiple levels. Employees and other stakeholders need to hear from more than the CEO. At this point it is better to over-communicate than to under-communicate.
  8. Align on values; allow granular detail appropriate to each level. Whether the CEO or an EVP or VP or department head or project team leader, there should be alignment on the level of values, belief, intent, or motive. But at each level the granularity should be appropriate to the level of the leader doing the communication.
  9. Convey a positive attitude that balances urgency against the provoking of panic. Effective leaders keep the focus on the future even while demonstrating urgency. But emotions themselves are contagious. Leaders need to stop short of provoking panic.
  10. Express emotion, vulnerability, and humility. Arrogance makes empathy impossible, and it is empathy that gets leaders and organizations through a crisis. Leaders are often reluctant to express emotion or vulnerability. But the most effective ones do.
  11. Get good at being on TV. Whether recording a video for public consumption or conducting a meeting via Zoom or Skype  or GoToMeeting, leaders need to get good at communicating through a video camera.
  12. Remember, people are feeling very fragile. People are scared; they’re worried about their jobs and their friends and their families. People’s work lives and personal lives have been upended. And some people are being stigmatized. Now is a time that calls for kindness. Effective leaders care.

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Two Important Lessons on How to Manage Uncertainty

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To be a CEO in this day and age means to be expert – or adept, at minimum – in managing uncertainty. Considering that as of today the average tenure for a CEO is a mere five years alludes to the uncertainty inherent to the role, now more than ever.

Uncertainty is arguably our greatest challenge in light of COVID-19, which is why there is no better time than now to share two important lessons from an expert on how to effectively manage uncertainty and why it’s important: former CEO and current chairman of the Walt Disney Company, Bob Iger. Bob announced he was stepping down from the CEO position in February after a remarkable 15 years in the top position. Two highlights from Bob’s illustrious and enduring career:

Eisner succession Bob persevered through a grueling, seemingly-never-ending vetting process before assuming the top leadership position after his cantankerous but respected predecessor, Michael Eisner (it was under Eisner’s stewardship that the Company released such box office hits as Beauty and the Beast, The Lion King and The Little Mermaid). Adding to the stress of the process, two board members, one being Roy E. Disney the nephew of founder Walt, announced a lawsuit against the Company for appointing Bob as CEO in what they claimed was a “fraudulent succession process”. The lawsuit was eventually dropped, due in large part to Bob’s ability to exercise emotional discipline and recognize that “if you approach and engage people with respect and empathy, the seemingly impossible can become real”.

Opening Shanghai Disneyland Four days prior to the opening of Shanghai Disneyland, an 18-years-in-the-making endeavor, a domestic terrorist attacked Pulse nightclub in Orlando, FL. The nightclub was located near another Disney property, the Walt Disney World Resort which has 70,000 employees and tens of thousands of daily visitors. Just 48 hours after the terrorist attack, one of the deadliest in U.S. history, a two-year-old child was killed by an alligator on the same Walt Disney World Resort property. In an awe-inspiring display of leadership (keep reading to find out in part how he did it) Bob managed to respond effectively to both crises, while successfully launching one of Disney’s most significant business ventures.

Disneyland Shanghai opened on June 16, 2016 after an 18-year-long development process of which Bob Iger was a central part.

Bob was successful in managing the doubt and anxiety inherent to both situations in a way that allowed his and his company’s continued success. Below are two important lessons taken from his memoir The Ride of a Lifetime: Lessons learned from 15 years as the CEO of the Walt Disney Company, on how to manage uncertainty (whether business, personal, or global-health-crisis related) like a pro:

#1 Focus on what can be achieved; optimism is a stronger motivator than pessimism. In his memoir’s prologue, Bob lists the ten leadership principles that he identifies as having served him best over his 45-year career. The first trait he lists is optimism or as he describes it, “a pragmatic enthusiasm for what can be achieved.” The use of ‘pragmatic’ is key in this definition; optimism as Bob understands and practices it does not mean willfully ignoring the reality of one’s circumstances or ‘living in the now’ and only in the now without a prudent eye looking ahead. After all, foreseeing the foreseeable is one of the essential disciplines of effective crisis response and leadership. However, foreseeing the foreseeable and metaphorically lighting one’s hair on fire over it in the present are not mutually exclusive.

Bob’s brand of optimism means regardless of or despite the circumstances, knowing that there is in fact a solution, a path forward, a way out of / around / through / or over an obstacle. The key is to remain mentally and emotionally flexible in accepting what the ‘solution’ or solutions available are. Put another way, simply because a solution does not align with one’s initial expectations or preferences does not make it any less of a solution.

#2 To recognize and accept what is beyond one’s control is an effective way to restore control. It might surprise you (as it did me) to know that Bob’s answer to the question of ‘what is it about “The Job” that kept him up at night?’ is, “I don’t agonize over the work very much … I tend to approach bad news as a problem that can be worked through and solved, something I have control over rather than something happening to me.”

His quote belies the underlying effective mental approach to managing uncertainty, which is to focus on and prioritize what one does have control over, as opposed to flailing helplessly (and needlessly) in the dark wasteland-of-hypotheticals. Part of what makes uncertainty so challenging is the inherent fear it carries; “what will happen to [ insert person / place / thing of value ] if…” To allow oneself to spend too much time in the dark wasteland-of-hypotheticals is a form of self-inflicted harm because it makes the current problem unnecessarily more difficult. Valuable mental and emotional energy are wasted fixating on problems that might never arrive or if they do, are often not as severe as initially feared.

Acknowledging and accepting what cannot be controlled (like the announcement of a damaging lawsuit, a sudden animal attack, or the emergence of a bewildering disease) is a form of control in and of itself. It brings into relief what can be controlled and what can be done about it. This is not purely an exercise in self-soothing although it can help restore some inner peace; it has the pragmatic effect of revealing and prioritizing what can be done to mitigate the problem. And once it is known what options are available, steps can start to be taken in pursuit of those options in the greater service of reaching a solution. And this kind of progress has the twofold effect of dissipating fear and enhancing morale.

Uncertainty is unavoidable. Panic and despair in reaction to it, are not. Thank you, Bob, for setting an uplifting and admirable example.

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