Navigate confidently through the crisis

As coronavirus (COVID-19) changes how we live and work, our experts discuss the top considerations for businesses, including what we’ve been hearing from our clients about how they are navigating this evolving situation. Our host for this brand new series is Rowena Morris, a PwC Director who helps clients prepare and respond to crisis situations. In this episode, she is joined by Laura Middleton, a Director in our Healthcare team, and Umang Paw, a Partner who leads our Crisis business.

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Rowena Morris (RM): Welcome to the first episode of our COVID-19 podcast series. Each episode, we’ll be exploring the business impact of coronavirus with expert guests. We’ll discuss the practical steps businesses can take to navigate the challenges caused by COVID-19. Themes will range from supply chain management to cybersecurity and much more.

I’m Rowena Morris, a Director at PwC, and I help clients prepare and respond to crisis situations, and I’ll be your host for this series. In this episode, we’re going to be exploring the high-level implications for businesses as COVID-19 is changing how we all live and work. This will include what we’ve been hearing from our clients about how they’re navigating this evolving situation. We’re recording this podcast remotely today, and I’m delighted to be joined in our virtual studio by Laura Middleton and Umang Paw. Laura is a director in our healthcare team with a background in epidemiology, and Umang is a partner who leads our crisis business. Thanks for dialling in, Laura and Umang.

So, Laura, COVID-19 is obviously causing huge amounts of impact across people’s lives and their families, as well as their communities. Can you talk us through some of the challenges businesses are facing with their people?

Laura Middleton (LM): Yes, absolutely. As you’d expect, this is having a huge impact on the workforce, and there are a number of different themes we’re seeing in our conversations with businesses. I think the first and most critical is around wellbeing, and not just the obvious physical wellbeing challenges – a number of businesses are seeing significant proportions of their workforce either off with COVID-19 or self-isolating, or caring for those who are unwell, but we’re also seeing quite a significant level of concern around mental wellbeing. With a significant amount of uncertainty and changes in people’s routines, this has absolutely had an effect on mental health, and this is something that businesses are really trying to address and support their workforce in.

Linked to that, one of the challenges is around employee engagement, and in many businesses, you’ve no longer got the vast majority of your workforce in the office, so there are challenges in how to retain employee engagement, make sure that everybody is continuing to be involved, get that team spirit that they feel they need, and we can talk about a few examples of how that might be addressed by different businesses.

Another challenge is around technology and infrastructure, and a lot of businesses have had to very rapidly adapt to ensure that their employees are able to work from home – that they’ve got the laptops and broadband that they need to be able to do their jobs in a different setting.

The final area that I think is very important is around the caring responsibilities that a large proportion of the workforce will have. And that’s not just for childcare, with the schools being closed, but also for people who might also be caring for elderly or vulnerable relatives or neighbours or indeed when other family members are unwell with COVID-19.

RM: So building on all of that Laura, what are the practical steps that you’d recommend for organisations to support and protect their people?

LM: Well, I think the first thing we’d say is that duty of care to employees comes first, and that’s absolutely the message we’re hearing from most businesses. We’d recommend that they stand up a dedicated team to manage and implement their response, and that’s really critical just because information is changing so quickly that having that centralised team to manage how you’re communicating with and supporting your workforce is really critical.

We’d recommend that businesses try to understand and define the skills that they need to maintain the most essential tasks within the business, and identify who the workforce are that are absolutely critical, and the processes and systems that support that. And they’ll need to proactively anticipate where disruption might come and refine those definitions and those responses accordingly. There’s a lot of new information coming out every day at the moment, so that’s something that businesses will need to keep revisiting regularly.

The final point would be around communication. We’d absolutely recommend regular communication with employees, and making sure that’s done as early as possible when there are changes on things like policies. It’s also worth considering, where it’s relevant, engaging with trade unions, because they’re a critical part of that communication process.

RM: Yes, certainly from a PwC perspective, that regular virtual communication with all of our staff has been very important. Building on that, can you give us a few examples of what PwC are doing? I know a lot of our clients are asking about those real-life examples of what we’re putting in place ourselves. Maybe if Laura could start, and Umang could build on it, that would be great.

LM: Yes, absolutely. So there’s a number of different approaches that we’ve taken, both from the more formal side of things through to less formal approaches to help improve employee engagement. We’ve had a number of webcasts that our staff have been able to join, and that’s proved to be a really useful forum to share key changes to policies and ways of working, but also we’ve used that to support people with their wellbeing. We had a psychologist and a doctor join one of our early webcasts to make sure that some of the questions around health and wellbeing, both physical and mental, are addressed, and we also give people the opportunity to ask questions on those.

Simple things in terms of ways of working: we’re using lots of video chats at the moment for most of our meetings, and encouraging people to have their cameras on for that – it just helps with some of that engagement. We’ve stood up regular meeting schedules with staff to make sure that everybody is having regular communications with different members of their team. Some of those are very much focused on business, some of those are less formal, and we’re doing things like virtual coffees, making sure people have buddies and they’re linking in with those regularly, and that’s helped to address some of the engagement challenges.

The final point I’d make, and I’m sure Umang will have some other points as well, is that a lot of our staff are really keen to volunteer as well, as we’ve seen across the country, so we’re encouraging people to use their volunteering time that they have every year to support the response to the outbreak, be that in the community, or potentially donating to local food banks or other charities as well.

RM: Brilliant, thank you Laura. Umang, anything to add around that point?

Umang Paw (UP): Laura mentioned that we’re encouraging people to have cameras on during calls, but equally we’re encouraging people to say if they want to go and take a conference call from their garden and have a walk around, that’s OK – you don’t necessarily have to be sat in front of your computer and your desk. And actually, I’ve been participating in some of the sessions where we’ve had virtual social events. They could be virtual coffees as Laura said, or it could be an evening event where people are either just generally talking, or there’s other things going on like virtual quizzes. So that, as Laura has already said, has really helped with team engagement.

RM: Brilliant, thanks Umang. So if we move on, there are so many different issues for businesses to consider right now, and speaking with clients it can be really hard to know what to prioritise first. So Umang, can you talk through what you’d recommend organisations should be focusing on right now?

UP: I think there are a couple of key topics, so one is really around crisis and scenario planning. And actually having a task force which might be a subset of your board, and also has the operational leaders within your business, all coming together to assess the situation and make business decisions. And what’s needed there, as well as the right people you need the right information and the right skills to be able to take all that information – a lot more information coming through than normal – taking that information and actually using it in an intelligent way to make decisions in a way that gives confidence. Confidence both internally with your employees, but also externally with your suppliers, business partners, customers and potentially your shareholders if appropriate as well.

I think the second point is around cash and liquidity. Unfortunately, what we’ve seen is across a number of sectors that topline revenue has pretty much disappeared. And therefore that is causing quite a lot of cashflow and liquidity challenges.

RM: And so what sort of measures should businesses be taking now to tackle some of those challenges?

UP: So there’s a number of things people should be thinking about. The first, which is critical, is starting to produce some cashflow forecasts. They need to be at least 13 weeks ahead, and in some cases, we’d actually recommend that they go further. When they’re going further, they need to be linked to some scenarios relating to what might happen to the spread and control of the virus. And that probably needs to be done on a country-by-country basis, because the way the virus will be controlled and be spreading will differ by country and even by region.

The second is considering all your funding options. Across the world we are seeing governments and tax authorities announcing different funding options. Consider whether you are eligible for those, and whether it’s appropriate and applicable to your business to be applying for some of those. And relating to that, there are a number of employment and tax-related measures that are also being put out there, and again you should consider whether you should be taking those, and actually the appropriateness needs to be thought about at the same time as to whether it’s applicable and appropriate for your organisation to take those options.

And then I think the last two options – one is consider other options that will unlock cash in your business, and finally rapid cost reduction and pulling some of those levers that will quickly enable you to reduce costs in your business, will make a difference.

RM: You mentioned the importance of scenario planning. Laura, can you talk us through how we expect the spread and control of the virus will impact UK businesses?

LM: The first thing I’d say is there are a huge number of unknowns at the moment, so the first thing businesses should be planning for is uncertainty, and the fact that things will be changing rapidly. Right now, as we stand, we are currently looking at an initial peak of the virus in the middle of April, so in terms of businesses doing their initial planning we are now seeing most at a stage where they’re ready to respond to higher levels of staff sickness. However, that doesn’t mean that after that initial peak that cases will disappear and we’ll be back to business as usual. I think whatever is going to happen over the next few weeks, we can expect the virus to be with us for a significant period of time. This isn’t a virus that’s going to disappear until we have a vaccine in place or until there is a significant level of herd immunity, and that’s unlikely to be in 2020. So my advice for businesses would absolutely be to think about this in the medium- and long-term, not just in terms of crisis planning for the next few weeks. And identify ways of operating in this new normal, essentially.

There isn’t clarity at this point in time as to how some of the lockdown measures that are currently in place in the UK will be lifted. There are a number of different options for that, but really it’s too early to say right now what that might look like. There are options ranging from partial lifts of lockdowns, either for different age groups, in different regions, or even just in terms of maybe lockdown being partially lifted and smaller businesses being able to open. We really haven’t had any indication from the government about what that will look like and it’s too early to say right now. So back to Umang’s point around scenario planning, we would suggest that businesses should absolutely be considering all of those different options and starting to think about what that would mean for them and how they would operate in those scenarios.

RM: Thank you Laura. This is a bit of a summary episode of our podcast series, so I wanted to really wrap up by asking you both if there are a couple of top tips that you could share for businesses as they look to navigate through the coming weeks and months. So maybe start off with Umang?

UP: Sure Rowena. I think the first point is make sure you have a dedicated team that is cross functional and has people on it that can make decisions, that are all working closely together to manage the crisis situation so they are considering all aspects of the business, taking the information that’s coming through and they’ve got the right information coming through to make the right decisions with clarity and confidence.

I think the second is around cashflow and liquidity, and I’ve probably talked about that, but just to ensure that you are very clear as an organisation on what your cashflow situation is, and what are the levers you’re going to pull to improve your cashflow position. And make sure that you’re a business that can continue going.

And then finally, I’m sure you’ll cover this on a future podcast, but actually starting to plan for the future as society returns back to normal, or as Laura referred to it, the new normal. So for example, when consumer demand starts to increase again, how are you going to make sure that your supply chain is producing the products or solutions for you, that you need to be able to deliver to your customers.

RM: And Laura, any top tips to build on what Umang’s covered?

LM: I’d absolutely reiterate the point around doing that planning. If you’re not already, start to think about the medium- and the long-term and start to plan for that, not just what’s going to happen over the next couple of weeks. The other point I’d absolutely emphasise is the importance of communication with your customers, suppliers and particularly with your staff. Focus not only on changes to policies and procedures, but also that point around wellbeing we discussed.

RM: Well, that just leaves me to say thank you to everyone who has joined us today to listen to this discussion, and thank you to Laura and Umang. In the coming episodes, we’ll cover these topics in more detail. In our next episode, we’ll be talking about cash and liquidity and cost reduction measures. Please subscribe to stay up to date with our latest episodes. You can find all of our COVID-19 insight at pwc.co.uk/covid19. And finally, I hope you all stay safe and well at home and look after yourselves, your families and friends. Thank you.

Participants

  • Rowena Morris, director, PwC
  • Laura Middleton, director, PwC
  • Umang Paw, partner, PwC
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