Op-ed: Corporate Social Responsibility in This Crisis
It is always easier to act consistent with your highest values when times are good, when there is at least a little financial cushion. When revenue just stops coming in – suddenly, without warning – and the world changes almost overnight, it’s another story. It is hard not to be driven by fear. It is hard not be disoriented. The experts are telling us that we are grieving, too.
And now business leaders must make hard decisions. In this context, what does corporate social responsibility look like? Every company is different, but what we do know is that ethics and excellence intersect. So, rather than throwing out your highest values, embrace them in these ways.
Focus on your employees’ financial wellbeing.
Specifically, this starts with paying attention to the financial wellbeing of your workforce, particularly the most vulnerable, sharing financial pain, and minimizing layoffs. There are a wide range of ways to do this, but they typically include cutting the salaries of the highest paid employees much more than the wages of the lowest paid, cutting back to part-time employment for everyone, offering unpaid sabbaticals with the promise of a job upon return. If it is possible to commit to no layoffs, do that, but don’t make promises you can’t keep.
Communicate, communicate, communicate.
Then get them involved. Now is the time to demonstrate to your employees that you are concerned about their wellbeing. That is crucial to creating a “we’re all in this together” attitude. And you can only do this by communicating honestly and clearly about the company’s situation. Leadership needs to give employees enough information and create enough trust so that you can crowdsource ideas from them. To the extent that employees can be involved in designing the way that the company will work going forward, everyone will feel better, and the outcomes are likely to be better, too.
There are great examples of this. Read the story of how Barry-Wehmiller got through the Great Recession (https://www.barrywehmiller.com/). And it is important to know that there is government support for avoiding layoffs in the bill passed by Congress and in our unemployment insurance system. UI will pay for a portion of the wages that you may need to reduce.
There is both research (see https://hbr.org/2010/03/roaring-out-of-recession) and a great deal of anecdotal evidence that if you can hold your staff together through the recession, as the economy improves your company will be well prepared to jump on the opportunities because you have saved the cost and time of turnover.
Develop new opportunities. Improving efficiency to cut costs helps in the moment. Making investments in new product development and marketing, and making focused investments in equipment upgrades will be the key to more rapid growth as we emerge from the Great Recession. For smaller businesses, time rather than money may be primarily what is spent. The question is, how do you make best use of this pause in the economy to position your company to give the market a more valuable product or service? It has always been true that the urgent – in this case that’s all that you need to do to survive – wants to crowd out what is really important, but this time is also a key opportunity to develop new ideas and prepare for the future. Because you aren’t overconfident at the moment, those plans are likely to more realistic, too.
This is a crucible moment. Whenever these occur, disintegration is possible, but reforming ourselves into something stronger is also possible. You are not facing this challenge alone. Let us know how VBSR can help you as we make this journey and re-form ourselves, too.
Frank Sadowski is currently the Chair of the VBSR Board and a business consultant.