Historically, crises for consumer-facing businesses have been limited to fires and thefts, or perhaps moral failure of an executive.
The pandemic, however, challenged businesses in a way that no crisis has, broadening the scope not only of how businesses respond, but also the types of disasters they can expect.
Crisis management manuals provide a foundation for any scenario, but there was no guide to dealing with a pandemic until last year, said Brian Harper, CEO of RPT Realty, a shopping center operator in outdoors. Companies had to find long-term solutions to unprecedented challenges both large and niche.
At the same time, brands have modified the crisis management manual in the future, focusing their efforts on three pillars: humanity, liquidity and innovation.
A company’s ability to communicate effectively and with empathy will continue to play an inordinate role after a year rocked by a pandemic and social unrest.
For fast-casual chain Torchy’s Tacos, that meant getting the message out to customers digitally through social media about what he was doing to keep them and employees safe, CMO Scott Hudler said.
For its part, RPT Realty’s primary goal was to provide its employees with the tools they need to be successful in a work-from-home environment while being empathetic towards their well-being, Harper said. He created handbooks with best practices from sources such as the Centers for Disease Control and Prevention and Town Hall operations, to relay the response plan to tenants.
Party City, meanwhile, was already building an internal communications team to improve its corporate culture, CMO Julie Roehm said. This included transforming the retailer’s social listening team and its call centers so that any negative feedback triggers a chain reaction of alerts, reducing response times in order to reach resolutions within 24 hours. .
Roehm stressed that how a business communicates, how transparent it is, and how quickly it reacts to problems are critical to finding a quick and successful solution.
Going forward, brands will be more proactive in responding quickly to the needs of employees and customers to create healthier work environments and increase consumer satisfaction.
The second most pressing issue in the pandemic was making sure there was enough cash.
Never before have companies considered a scenario where a large number of stores had to close for long periods of time. Ultimately, companies that were cautious with their balance sheets as the pandemic approached were better prepared.
A year ago, RPT struck a deal to place several of its properties in a joint venture with Singapore’s sovereign wealth fund, GIC Private Limited, which has put around $ 118 million in cash on the property company’s balance sheet.
As the spread of Covid-19 began to threaten operations, RPT identified areas where it could reduce its spending at the property level. Then he analyzed the financial health of his tenants to determine who needed help, including mom-and-pop stores that need help applying for Paycheck Protection Program (P3) loans. .
Beyond immediate measures to preserve cash flow, however, companies in the future will be more thoughtful about how they manage their money even before a crisis hits. They will want to reconsider whether initiatives like share buybacks and dividend increases are the best uses of capital.
A healthy balance sheet helps, but companies still have to innovate in a crisis. If the pandemic has learned anything, it’s that tech-savvy retailers have performed better.