The fallout from the COVID-19 pandemic is unprecedented. It’s a global disaster, and no organization has been unaffected, whether they be small, medium, or large. Many companies have teetered over the edge into bankruptcy, some that were already struggling, but also others that were seemingly resilient enough to weather the storm. The Congressional Budget Office recently estimated that the pandemic will cost the U.S. economy $7.9 trillion over the next decade, although they caution that the ultimate impact cannot be fully known for years. “An unusually high degree of uncertainty surrounds these economic projections, particularly because of uncertainty about how the pandemic will unfold this year and next year, how the pandemic and social distancing will affect the economy, how recent policy actions will affect the economy, and how economic data will ultimately be recorded for a period when extreme changes have disrupted standard estimation methods and data sources,” said CBO Director Phillip Swagel.
Many companies had crisis management plans in place prior to the pandemic, others did not, yet it would have been nearly impossible to foresee the difficulties that have arisen due to the COVID-19 pandemic. Certainly, businesses deemed as non-essential and shut down by government decree have had few options but to close. Yet small, medium, and large corporations alike have, through adaptability and innovation, risen to the challenge.
Here’s a look at how some companies have achieved business continuity, at least to some degree, through the most perfect storm imaginable by using and adapting their crisis management plans.
Faced with stay-at-home orders of uncertain duration, those companies that could keep operations going with their employees working from home found themselves scrambling to accommodate remote work. There has been a gradual move to remote work over the last decade as high-speed Internet and mobile devices have made it more feasible. Some corporations had as much as 30% of their workforce operating remotely at least part of the time before the pandemic struck. Yet now businesses have had to quickly adapt to having as many as 80% or more of their employees working from home.
One company that has experienced a relatively smooth transition to remote working is Panasonic Corporation. Panasonic is probably best known for its audio and visual equipment but they also manufacture many other types of electronic products.
Panasonic’s human resources department was an early adopter of new and emerging technologies, embracing cloud computing, mobile devices, and IoT initiatives almost a decade ago. The HR department developed a human capital management system accessible to all upper management through the cloud, wrote a comprehensive work-from-home policy, and adopted collaboration software to keep both remote and in-office employees in communication with each other.
When the COVID-19 pandemic hit, the company did two days of extensive testing on their systems to weed out any issues before they instructed their employees to stay at home. Most of their workers already had laptops and mobile devices they could use at home, but for those who needed them and those who required tower computers and dual monitors, the equipment was provided. The company has been using messaging apps and video podcasts to disseminate updates and important information through its crisis communications processes.
So far the transition to remote work has gone well, though there have been some problems. Factory workers often didn’t have access to computers and mobile devices to receive updates and information. And not surprisingly, many employees have found adapting to working from home to be difficult, working more hours than normal because of the unfamiliar situation, affecting their work/life balance, and finding it hard to cope with the feelings of isolation they’ve experienced being away from the office environment and the stay-at-home orders.
On the other hand, the HR department has reported that there has been no loss of productivity and that in fact it may have increased. There has also been a notable improvement in employee engagement and morale.
The company says it will use the lessons learned from this crisis to reassess and revise its remote work policies and capabilities to make them more efficient and user friendly. It’s clear that Panasonic’s foresight in adopting the technologies that facilitate remote work has helped them immensely to weather this storm.
Out of obvious necessity, every state in the nation deemed supermarkets and grocery stores as essential businesses during the pandemic. These companies haven’t experienced the business continuity headaches that other companies have, indeed the pandemic has proved to be a boon to sales and profits, they nevertheless faced formidable challenges of their own. Kroger’s response has for the most part been a mirror of that of other similar grocery chains and offers a valuable case study in how to manage rapid changes.
The first major problem that Kroger faced was how to protect their customers from the virus while they shopped, as well as their workers. The mad rush of panic buyers threatened to create rich hunting grounds for the COVID-19 virus. Implementing government recommendations and some of their own ideas and methods, in early April the stores introduced customer capacity limits of one shopper for every 120 square feet, using infrared instruments to measure store capacity. Store hours were adjusted to allow more time for cleaning and stocking. They started testing one-way traffic for aisles, and using colored tape to mark off 6-foot increments in checkout lines to aid in social distancing. Plexiglass cough and sneeze shields were installed at cash registers and customer assistance desks, and the company supplied masks to all employees and made wearing them mandatory.
One of Kroger’s biggest challenges, shared by other retailers, was the phenomenon of panic buyers and hoarders clearing the shelves of in-demand foodstuffs like meat, canned goods, and dehydrated products, and commodities like hand sanitizer, alcohol, toilet paper, and paper towels. They simply couldn’t keep the shelves stocked fast enough, and the problem was exacerbated by disruptions in the supply chain. The company’s response was a massive hiring campaign. In March, Kroger announced that they had hired more than 100,000 new employees in eight weeks. Many of those workers came from restaurants, the hospitality industry, and other sectors that have been hit hard by the pandemic.
To accomplish this feat, Kroger had to redesign their hiring and training system to make it faster and more efficient. Training became focused on teaching people to do specific tasks, rather than to fill specific roles. The company says this approach and other changes has allowed them to hire and onboard new employees within 72 hours of them submitting an application. The company has raised the average wage to $15 per hour, and gave all of their frontline workers a $2 per hour ‘hero bonus’. Other cash bonuses have been offered as well as employee discounts on products. All of this has led to higher morale and esprit de corps among their workers as well as increased productivity and attendance.
However, Kroger made some missteps along the way that resulted in considerable backlash. On May 16th the company ended their ‘hero pay’ bonus, after having extended it once before. Employees and advocate groups were outraged, saying they were still facing the same amount of risk at work as they had been before. The company’s union, the United Food and Commercial Workers, argued that other large grocery chains where they represent workers had extended their own pandemic bonuses. Kroger responded that they had paid a one-time bonus on May 15 of $400 for full-time employees and $200 for part-time workers.
Another embarrassing ‘oops’ moment occurred less than a week later. The company had granted emergency leave pay to employees that had been directly affected by the pandemic. Workers that had taken advantage of this benefit began receiving letters from the Kroger payroll department informing them that they had been overpaid and had to pay the money back or face collection proceedings. Management quickly informed employees that the letter was an ‘unfortunate accounting error’ and that repayment wouldn’t be necessary. Exactly how the error occurred was unclear.
Despite this, Kroger, along with most other retailers in the country large and small, has demonstrated an admirable ability to adapt to an unforeseen crisis that gives proof of how resilient American businesses can be.
Jack In The Box Restaurants
Like most drive-through fast-food chains across the nation, Jack in the Box has been able to, if not exactly to keep its doors open, continue to serve their customers with drive-thru service, delivery, and carryout. Although the transition to these limitations has created a few operational difficulties, early on in the pandemic the company realized that making changes to its marketing strategy and brand messaging was key to negotiating the crisis.
For decades Jack in the Box has used an edgy, irreverent, humorous image and messaging to make its brand stand out from the competition. But how does a company maintain that strategy during such an uncertain and fearful time?
The first thing the company did was to begin stressing all the things the company was doing to protect the health of their customers and employees, including masks, enhanced cleaning measures, and contactless delivery.
The second task was to ensure their customers that their restaurants were indeed open for business and ready to serve them.
They also decided to make a change in their marketing channels. In the past, the company had mostly focused their advertising on ‘real-world’ and commuter targeted channels like billboards, radio ads, flyers, inserts, and coupons. They decided to make a shift over to digital platforms and entertainment channels to reach people who were now having to stay home all the time using their TVs, smartphones, and computers.
Chief brand and experience officer for the company, Adrienne Ingoldt, said, “We increased our streaming spend and social platform advertising. We decreased our spending on things like outdoor and traffic radio, and we continue to support gaming and platforms like Twitch because we’ve seen a rise there. It was really important for us to shift our marketing both in message and media placement to focus on telling our guests that we’re open, that we’re here to serve them through delivery, drive through, and the mobile app.”
They quickly launched several social media campaigns, including the #StayInTheBox campaign, which offered family meal packages and free delivery to encourage people to stay at home and dine in.
With so many high school students being forced to miss their proms due to the virus, Jack in the Box started their #PromInTheBox promotion, an hour-long virtual prom event with a taco theme that featured several popular musical acts and entertainers. Although it was targeted to Los Angeles area schools, it was live-streamed globally through the IG Live and Twitch platforms. Eventually, the hashtag tallied up almost 30 million unique impressions.
Ingold said that the pandemic is teaching the company leadership to be more bold and creative with their marketing strategies. “It’s a time now where we need to create really consistent and contemporary brand experiences for our guests, and in doing so, change the organization from thinking brand-out to consumer-in. And this rule is responsible for the total relationship and total experience consumers have with the brand. That means being accountable to business performance and operational changes as we all navigate this new norm, and being able to stay nimble constantly—listening to what consumers want and adjusting has helped us navigate this new world.”
Although it was virtually impossible for companies to foresee a crisis of the magnitude of the COVID-19 pandemic, these case studies show that having a crisis and emergency management plan in place and well documented, along with having the ability and the willingness to be flexible and adapt quickly to new situations, are the keys to resilience and continuity for any organization during unexpected and difficult times.
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