By Alberto Lopez Valenzuela, founder & chief executive, alva,
This pandemic calls for authentic leadership. After years of businesses theorising about ‘purpose’ and their role in society, the time has finally come to put their money and their efforts where their mouth is, with authentic, action-based announcements.
This is my key takeaway from alva’s analysis of the hundreds of initiatives that have been launched in response to the COVID-19 outbreak. Organisations that are putting stakeholder capitalism into practice and setting out tangible, action-based and targeted responses are the ones gaining the most respect.
For the past months we have been tracking very closely the development of the crisis and have analysed the actions of organisations that are putting stakeholders first – including community, customers and colleagues – when dealing with the pandemic.
So far, we have found that the companies making the biggest impact are those announcing large-scale pledges first, and not doing it by following government decree. Take Tesla – the tech company generated huge levels of positivity by announcing that it was producing ventilators for the US, even before President Trump mandated that national assembly lines be operationalised for the COVID-19 response.
Last month, GM and Ford announced their own ventilator production plans, with also a high degree of visibility – but highly negative sentiment. Tesla’s pledge stood out because it came first, while GM and Ford appeared sluggish. Going further, Elon Musk extended his commitment to all countries in which Tesla operates.
This example also highlights the fact that companies making equipment are far more likely to be looked upon favourably than those merely making donations – no matter how large the donation. Tangible, action-based and targeted responses vastly outweigh the impact of simple reassurances or financial pledges.
Initiatives aimed at helping health workers are among the most engaging: at a time of crisis like this, the NHS and private insurers in the US are deeply emotive subjects.
After the flood of free food and beverage giveaways for frontline health workers, the smart organisations are now starting to make healthcare support commitments in more meaningful areas.
For instance, Airbnb and Four Seasons announced that they will fill the rising need for accommodation for health workers; while QBE Insurance rolled out a car-share service for NHS workers relying on public transport.
Continued coverage around health workers indicates that corporates committing to this effort could help stabilise and foster better stakeholder relations – provided they can spring into action as new needs arise.
Other initiatives that have proved successful include those that take measures to protect employee health, such as Lidl’s installation of screens at their checkouts to protect both their customers and their employees.
Organisations that are stepping up recruitment rather than winding it down have been favourably received, such as Walmart hiring an additional 150,000 temporary staff to cope with the pandemic.
And organisations announcing reductions in executive pay have also received kudos, such as the Executives at GE and Disney accepting pay cuts to protect employees.
In the business unusual, costly and well-meaning announcements alone no longer cut the mustard. Organisations must display their authenticity by making tangible, action-based and targeted commitments – and by moving quickly.
To find out more about alva’s insights into how organisations are responding to COVID-19, click here.