Businesses have moved quickly to safeguard their staff and communicate effectively during the coronavirus, but will these welcome trends last? In the third article in our series, which looks at the opportunities emerging from this crisis, we explore why these common-sense approaches are here to stay
Pets at Home was riding high when lockdown hit the UK. The pet supplies retailer, which has been a public company since 2014, was getting ready to report a record set of results.
Turnover to 26 March had tipped over £1bn for the first time and underlying pre-tax profit was edging towards £100m. The company had been boosted by a massive spike in online sales during the early stages of the pandemic.
It was about to mark another financial milestone.
“I remember that evening, when Prime Minister Boris Johnson made his speech, we were trying to confirm that we were an essential retailer,” says Mike Iddon, group chief financial officer, speaking on Protiviti’s Enterprise and Market Resilience Forum.
“Although we could keep our stores open, we closed our grooming salons because we didn’t feel we could operate them safely. We also stopped selling pets, which is a big thing for us to do; and straight away, the Royal College of Veterinary Surgeons implemented some stringent guidelines about what our practices could do.
“Immediately, we had to look at what our revenues were going to be, our liquidity, and how long could we keep going like that.”
While the business had started the crisis with some good news in the bank, and a strong focus on its financials, the management team had to quickly decide its priorities for the months ahead.
In the face of reduced revenues and the immediate health risk, Mike says the first move was to safeguard the lives of 10,000 people.
The 750-strong head office team immediately started working from home. There was also a group of 350 people in the business who were either vulnerable and shielding, or acting as carers for others, who were.
“We asked them to leave the business and carried on paying them 100 per cent; we didn’t furlough them,” says Mike. “We also paid a one-off recognition award, to store colleagues, of £2m in total.”
Decisions were taken to treat everyone else equally and fairly, too, keeping investors up to date and paying rent to landlords on time. Investment in digital infrastructure and using data to make decisions was also accelerated to support the changing business.
According to a recent trading statement, in the 20 weeks to 16 July, revenues have started to recover for Pets at Home. While like-for-like sales were down in the vet group and stores, the group has remained stable, supported by strong growth in online sales.
This story was a key moment for Paul Middleton, managing director at Protiviti, who has been hosting the Enterprise and Market Resilience Forums since March this year.
For 20 weeks until the end of July 2020, the Protiviti team in the UK alongside its parent company Robert Half, was joined by guests from businesses and healthcare providers, economists, investors, industrialists, athletes, and communications specialists.
He’s been struck by the humanity shown by many business leaders facing something quite unprecedented. But it was the decisions made by the Pets at Home management team that have stayed strong in his memory.
“A principled people agenda is one that is increasingly important,” he says. “At the start of the pandemic, many companies were focused on preserving jobs, and then it changed to resilience and how people were performing; now a lot of leaders are asking themselves, are we looking after our people well enough?
“Mike Iddon won numerous fans on that forum. There were people ‘in the chat’ saying they had never shopped at Pets at Home before but will now; that authenticity of brand is so important.”
Communications: the ‘friends and family test’
The pandemic has shown, alongside these stories of care and support, that business communications also need to strike the right frequency and tone. Mike says the team at Pets at Home is producing a video every day, talking about the progress being made across the business. Each leader has also adopted a group of 20 stores and regularly speaks to a group of store managers to understand what is happening.
According to Fiona Laffan, managing director of PR and marketing consultancy Prosek Partners, who also spoke on the forum, this approach has been common during the pandemic.
“We’ve seen an increase in the frequency of internal communications,” she says. “The need for companies to communicate with their employees, and the need for transparency, has accelerated. Whether it will continue at that pace is unclear, but the principles of bringing people together, building trust and transparency, will definitely continue.”
Victoria Cross, managing partner at corporate communications firm Instinct if, says that authentic communication has never been more important. She believes companies should think clearly about communicating with integrity, empathy, and purpose.
“It can be really tempting to jump on the bandwagon of the latest issue lighting up social media,” she told the forum. “But as we saw from the incredibly emotive Black Lives Matter activity, a lot of brands were criticised for taking part with little substance.
“While we know it’s often well-meant and well intentioned, if your stakeholders can see beneath that veneer and question the credentials in the business – then your integrity gets called into question.”
She’s also talking to clients about empathy and ‘the friends and family test’. Would your communications cut muster with the most cynical member of your family, or your most critical friend? It’s important to cut through the corporate guff and ask yourself if what you are saying really feels in tune with society.
Victoria’s third point is about communicating with purpose. With so much communication going on now, it can be hard for people to know what and who to listen to. What can you share with your stakeholders that they can’t get anywhere else?
“We all know we need to wash our hands and stay apart from other people, but what is it that you can specifically give employees, customers, or investors in your company, for example?” she adds. “They should be messages of reassurance and positivity, but also a realism about what your brand can actually do.”
Creating trust for the long term
It seems obvious to say that how companies behave now will have an impact on customer and employee loyalty in future. While many will be seeking to protect their balance sheets, doing the right thing now will surely bring longer term dividends.
“I had a summer holiday booked with Neilson,” says Paul from Protiviti. “They wrote to me saying they were going to cancel it. They could get my family there but said ‘you wouldn’t have the experience we think you have come to us for; we won’t be able to deliver it’.
“I wrote to the chief executive of Neilson and invited him onto the forum, just because of the message he had given was so powerful and one I thought needed to be heard. Yes, they have challenges in the travel sector, but that authenticity of message will give you payback in the longer term.”
Paul says this way of thinking has almost been a driving force behind the weekly forum as well.
“I think if I turned up every week with sales messages, people wouldn’t dial in. We want to facilitate a discussion that people can learn from, build trust and help them face the future with confidence; we believe that will play out better for everyone in the long term.”
Back at Pets at Home, Mike confirms that the lessons being learned about trust, respect, and loyalty are also here to stay. While the company’s digital plans are being accelerated, he is also keen to paint a picture that puts people at the centre of the business.
“I don’t think wellbeing has ever been as important as it is now,” he says. “People are tired; we are working very hard to encourage our teams to have breaks and understand what wellbeing looks like in today’s world.
“People will be at the heart of everything we do in future.
“If you look after your colleagues, that is a very good starting point.”
Following the Enterprise and Market Resilience Forums, which ended in July, Protiviti has just launched the second round of events called Inspiring Speakers. The events, which will run through August and into September will provide fresh perspectives and new ideas from people outside the business world.
The next article in this series five-part series will explore the future of internal audit and the opportunities for break down barriers in a post Covid-19 world.
Click below to view the entire series