As companies manage through the turmoil from the COVID-19 pandemic, it’s now time for them to evolve their strategies to be responsive to all stakeholders. The crisis is a defining moment in which a company’s broader responsibility, especially to its employees and community, is more important than ever. The crisis has clearly highlighted one essential point: Business has a leadership role to play in society.
But it’s not just about being a good corporate citizen. Communicating that broader role to stakeholders is just as important. Transparency builds trust, and trust can yield long-term shareholder value.
In today’s environment, investors and other stakeholders are seeking clear communication of reliable information to minimize uncertainty. Specifically, they are most interested in a company’s response to the crisis, and how it will move its corporate strategy forward into the post-COVID world.
Source: PwC COVID-19 US CFO Pulse Survey
May 6, 2020: base of 288/11% on base of 167
We can help protect the economy if we protect our people.
As things begin to stabilize, the next step is to strategize for the longer term and share your story. But what should companies consider sharing with stakeholders? Although each company’s COVID response is unique, some themes are universal. Here are three of our favorites.
An independent, motivated team that can work remotely without losing a beat has been a boon to some companies, and the lack thereof has hurt others. Sharing metrics, such as the consistency of worker productivity during a period of remote work, can be telling for investors.
The health and welfare of the workforce may not have been something to shout about before the crisis, but it is now. Companies may benefit from sharing information with stakeholders about enhanced workplace safety measures. Further, metrics such as the following can provide insights to investors about ways the company cares for its workforce, and therefore, indications that employees will be ready to help the business succeed beyond the crisis.
PwC’s COVID-19 US CFO Pulse survey shows that many companies are expanding the benefits they provide to employees as the crisis continues. We believe more companies should report their good work. While admittedly there is a cost to enhance employee benefits and welfare, there can be longer-term tangible benefits to the company in the form of enhanced employee performance and loyalty.
Source: PwC COVID-19 US CFO Pulse Survey
May 6, 2020: base of 288
Companies that prioritize community interaction and giving back may themselves benefit from these actions. Examples of good deeds abound. Recent ones include donations of food or money, providing free products or services to first responders, and establishing new programs that benefit the community, such as profit sharing with local charities when sales are made.
There are more examples. Pharmaceutical companies say they may not charge for a vaccine when it’s developed.1 Drugmakers have donated certain COVID medications free of charge. Other companies are enhancing communications with suppliers to identify risks and minimize disruption in the delivery of their products and services to customers.
Doing good yields goodwill. And that goodwill can translate into brand loyalty, pricing power, a robust customer base, and motivated employees, all of which should endure well beyond the current crisis.
1 — A Manhattan Project for Covid-19, WSJ podcast, April 29, 2020
It’s true that necessity is the mother of invention. As a result of this crisis, businesses have been compelled to evolve — how they work, how they produce their products and services, and how they go to market. Some also have had to accelerate plans that, in a different environment, might have taken much longer to come to fruition.
The COVID-19 crisis has compelled our country to be more collaborative, innovative and strategic than ever before.
Every day there are news stories of innovations developed in record time and companies contributing their expertise and equipment to support the cause or to fulfill a new demand.
Many of these new business initiatives will live on past the crisis, becoming new sources of revenue and expanding the historical customer base.
And everyone can be part of the new economy. The companies making innovative advances are not the behemoths we might have expected.
In an era of widespread 3D printing and high-tech software — and at a time when many large-scale manufacturers... are shifting their attentions to manufacturing medical hardware — small-scale producers are leading the way like never before.
Companies are also re-evaluating and streamlining their cost structures to weather the pandemic. This is understandable, and in some ways, it accelerates inevitable decisions. But, just as importantly, companies are continuing to invest in key areas that will contribute to a stronger future, such as digital transformation and customer experience.
The pandemic is also forcing companies to reconsider their culture and value systems. Culture is a complex, multidimensional topic that is coming into focus as companies try to find the right balance of virtual and physical work. We expect today’s heightened appreciation for employees to become part of tomorrow’s corporate culture.
As companies consider greater transparency in these areas, some interesting questions arise. How will the company ensure that this compassion for and consideration of employee well-being lives on? How will leaders remember the shared experience of the pandemic, but still move forward? How can a new culture be created that supports the company’s vision of the future?
Leaders have the opportunity to adapt their styles to consider the impact to employees in every decision, and we encourage them to do so—for the sake of the employees and the company.
2 — The COVID-19 pandemic is influencing consumer health behavior. Are the changes here to stay?, PwC, April 2020
3 — Doctors are using AI to triage covid-19 patients. The tools may be here to stay, MIT Technology Review April 23, 2020
4 — These new gadgets were designed to fight COVID-19, World Economic Forum, April 5, 2020
72%Say better resiliency and agility will make the company better in the long run
Source: PwC COVID-19 US CFO Pulse survey May 6, 2020: base of 288
One outcome of the COVID-19 pandemic is a clear shift in the role and expectations of a company. During this crisis, many companies have shown outstanding commitment to their stakeholders, especially their employees and communities. Being transparent about a company’s focus on all stakeholders builds trust with those stakeholders, which can, in turn, increase shareholder value. Sharing this information gives investors a full picture of the business and helps them evaluate how well companies have withstood the crisis and what the future may hold as they move past it.
We believe this is the beginning of a new era of corporate social responsibility that can only help companies come out of this crisis stronger and even better positioned than before.
Let this be the beginning, not the peak, of a corporate transformation journey, so that once society is beyond the immediate threats, we move into a refreshed approach to capitalism.