But Dimon also wrote, “We do not know how this crisis will ultimately end, including how long it will last, how much economic damage it will do, or how fast or slow the recovery will be.” The “actual new crisis,” Dimon wrote, “while it shares attributes with what is being stress tested — is dramatically different from the expected.”
In virtual boardrooms across America, managers are confronting unprecedented uncertainty as they try to communicate — with their investors, their employees and their customers — amid the all-consuming scope and scale of the pandemic. Finely tuned scenario plans are being upended, project timelines are getting cast aside and conventional playbooks are proving insufficient as managers face a health and economic crisis with no modern parallel.
In some cases, “we are no longer in crisis management, we are in chaos management,” said Davia Temin, eponymous founder of a reputation and management consulting firm. “You can do certain things and mitigate a crisis. This is out of our hands to some degree now.”
The communications challenge to investors will hit center stage in the coming weeks, as companies that haven’t opted to delay first-quarter earnings — as the SEC is allowing — report results and the spring annual shareholder meeting season hits its peak. Communications firm Sard Verbinnen & Co. has been tracking public companies that are withdrawing, suspending or revising 2020 financial guidance and has tallied over 540 so far from news stories, client reports or other publicly available information.
“We’ve seen some companies redefine and essentially surrender to the idea of no timelines,” said Bruce Haynes, who co-chairs Sard’s covid-19 task force. “Businesses exist on being able to provide that kind of information accurately. They can’t do that now, and that’s an incredible struggle.”
For Tim Ryan, U.S. chairman of PricewaterhouseCoopers, uncertainty has been one of the most challenging aspects of the crisis. “The hardest thing is not having an answer when you’re used to having an answer — not being able to say, ‘I know when this is going to be okay,’ ” he said in an interview. “You want to put your proverbial arms around it and say, ‘Here. It’s going to end here.’ ”
He’s holding “town hall” webcasts each Wednesday that begin with stories of how the firm is helping — such as an app it created to identify available nurses who could be deployed to hard-hit areas — and being proactive about sharing what he can, such as recently telling employees it will be a month before there would be updates about bonuses or raises. Even if there’s not yet an answer, Ryan said, he tries to raise “what is on people’s minds, instead of leaving it unsaid.”
With everyone working remotely, managers can’t as easily gauge employees’ or customers’ responses, or get out and experience how their competitors are doing. “The isolation is a real challenge,” Haynes said. “The only thing they can look into is the camera on their desktop computer and whoever’s on the other end of the Zoom call.”
Christine Specht, chief executive of Cousins Subs, a Midwestern sandwich chain with nearly 100 locations, said one of the hardest things she’s had to do is communicate salary cuts to employees over a conference call, rather than during an in-person meeting. “People don’t want to come to work for 80 percent pay, but they’ve said they support the decision,” she said, noting she plans to make people whole if possible once things settle down.
And while she’s having calls with her general managers over the phone and her president is sending frequent emails to restaurant operators, she misses the face-to-face reactions. “It creates a little uncertainty — how do people receive my messages when I’m over the phone?” she said.
Another communications challenge has been navigating how quickly news about the outbreak and local regulations have an impact. “A CEO could write an op-ed on what it takes to rebound the economy, and on Tuesday it feels relevant but on Friday it feels tone deaf,” said Carreen Winters, reputation chairman and chief strategy officer at MWWPR.
The usual advice to over-communicate and be transparent with employees still applies, crisis experts say, but business leaders can also create uncertainty if real-time messaging frequently shifts.
Mayer Electric, a Birmingham, Ala.-based electrical distribution company with 1,600 employees in 14 states, told workers March 20 it would enact a “reduced compensation plan” that would cover health benefits at no cost but dramatically cut pay, paying many just $300 or $500 per pay period after taxes and benefits. Mayer President Wes Smith told employees he would do “everything we can to make every associate whole financially when this is over.”
Then a message delivered March 24 said if sales and collections were better, the company would pay more. On March 25, Smith said employees’ next paycheck would be normal. On March 30, he announced a revised version of the reduced pay plan, saying each employee would be paid $900 every two weeks after taxes and benefits starting April 17. But on April 9, Smith told employees Mayer would be cutting jobs and instituting different salary cuts, with top leaders taking the largest cut, some seeing a drop between 10 and 25 percent, commissioned sales associates staying on their plans and lower-paid workers seeing no change.
One Mayer employee, who spoke on the condition of anonymity out of fear of reprisal, said, “There’s been all this back and forth. … Everything is changing everywhere and I would hope my employer would have something more concrete to tell us.”
Smith, who spoke with The Washington Post on March 24, said in an interview that “in this environment, we’ve got to get ahead of what we think would be pretty much a full stop. But we’re going to manage it day-to-day and look at what’s coming in and what has to go out, and we’re not going to leave a penny in the company.” In a follow-up email, Smith said many employees have been understanding. “We are simply doing what we said.” Smith did not immediately respond to emails and phone calls following the April 9 cuts.
Another challenge is investor communications. Tom Ryan, CEO of the communications firm ICR, said stocks are “trading on the balance sheet,” leading more companies to emphasize their survivability over things like earnings per share. “That’s a theme these companies are hitting over and over again.”
Even some companies that might benefit from more remote workers are being cautious. Todd McKinnon, CEO of identity management software firm Okta, reaffirmed the company’s revenue guidance, which is based on subscriptions, but also told investors they might see head winds in its billings. “We’re planning for uncertainty,” McKinnon said. “We redid the internal financial plan to spend less aggressively,” noting employee bonuses will be paid in stock rather than cash this year.
He said he has tried to be informal and frank when speaking with employees, directly answering questions about trimming hiring plans and trying to be as visible as possible, doubling the number of “all-hands” virtual meetings and sending around blooper video outtakes of himself for fun.
“It feels counterintuitive if you don’t have a ton of answers, but I think presence can be helpful,” he said.