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Is Business Ready for a Second Spike?
8 October 2020
With the imminent prospect of a second wave of Covid-19, the corporate world emerges from the Summer facing challenges with much higher stakes than last time. Scientific experts warned us of the “real risks” of a second wave and urged for plans to be put in place, however most companies have already made their big moves: what is there left to do or say?
Over the last three years, we have developed a series of studies, called ‘The Anatomy of a Crisis’. This series investigates previous crises to see whether lessons can be learned for the future. We have applied this approach to Covid-19, investigating whether there were lessons from the first spike which might inform how companies should behave if there is another nationwide lockdown.
Our study showed that the second spike will be more reputationally problematic than the first for a number of reasons. During the first spike, company messaging was comparatively straightforward — follow government advice, support customers and employees and help the NHS. Second time around it’s going to be less easy. A number of important questions are posed:
Can companies afford to be generous with their support packages for customers again? When we asked 1,200+ UK workers whether they expect companies to provide the same level of support as during the first lockdown (employee support, customer support, etc) 96% replied yes.
Will investor generosity last in giving businesses slack on removing forecasts and cutting dividends? Investors have supported Boards who have cut dividends because the pain has been shared by CEOs taking pay cuts. Most of these are short term in nature, so will CEOs be happy to share the pain again?
What will happen now Government support is winding down? How should businesses continue to motivate employees? There remains broad public support for the extensive action government has taken so far, but it can’t last forever.
For employees, the question in a second wave is how companies sustain morale with the infantry already weary from the first campaign. Lockdown for eight weeks is a very different proposition from finding ourselves in this state for a much longer period of time. As we enter autumn and a second wave, the cracks are starting to show.
Also, there’s the question of how companies should prepare for potential media scrutiny. The press has been largely forgiving to date, especially of companies having outbreaks during the first lockdown where many firms were caught on the hop. The next time, they may not be so forgiving and when we asked 1,200+ UK workers, 62% of them said that they want the media to scrutinise business more closely during a second spike.
All of these factors are crucial as companies think about how they should prepare for a second lockdown. Overall, the landscape in the second spike is undeniably going to be more difficult to navigate than the first. Employers cannot expect that the government, employees, investors and customers will respond to a second wave of coronavirus in the same way as they did when the infection first reached the UK. Preparation will be key.