From the editor-in-chief: Reasons for business survival and kindness in the time of coronavirus

So, we find ourselves at the beginning of Q2 of 2020 and in the third week of UK lockdown.

One strange word of which I’d never heard until recently – ‘furlough’ – seems to dominate every other conversation. I’d argue, however – and please bear with me – that there are several strong reasons for cheer.

But let’s get the negative stuff over with.

Firms are now in the ‘acceptance’ phase of this crisis (see last week’s column); an acceptance that Q2 is going to be absolutely terrible in revenue terms. By the end of June, forecasters predict the UK will be in the midst of an official recession (two consecutive quarters of negative growth confirmed).

Brand-owners and agencies are therefore acting in much the same way. They have frozen most discretionary expenditure – freelancers, recruitment and, in some cases, campaigns – and tried to cut short-term costs as much as possible, often by furloughing (sadly, it’s also become a continuous verb) staff until the end of May/June.

Having talked to many comms bosses over the past week, there is an acceptance that we just have to get through Q2 with businesses operating and sufficient liquidity and morale maintained.

There is talk of many small businesses sadly failing to make it through this period, and this could include some PR and advertising agencies. One feels the government has done its best to tide SMEs over this period, but promotional agencies – particularly in travel, automotive, hospitality, luxury, sport – will face a torrid time unless they have flexible and understanding clients and/or deep pockets.

Another concern is whether Q3 will be much better. Sir Martin Sorrell believes it will be ‘slightly better’. But of course, this all depends on the rate of infection, and therefore the level of social restrictions, as we enter high summer.

Recovery

Economically, and indeed psychologically, it hasn’t helped that, one by one, all the major summer events – from Glastonbury to Wimbledon and the Olympic Games – are being cancelled. But it was encouraging to hear the hugely experienced Sorrell predict this deep recession would be ‘V-shaped’; that ‘brands will let rip’ in Q4 – the ‘recovery’ phase; that business in Asia is already bouncing back.

This could well happen, as there will be pent-up consumer spend and possibly a hedonistic upswing, but it does all depend on the economic and social damage wrought in the meantime.

So where’s that good news again?

Well, firstly, I’ve been cheered by examples of outstanding leadership of both brands and agencies.

It was a major boost to the PR industry last week when Richard Edelman, owner of the world’s biggest comms agency, told his 6,000 employees across the globe that their jobs were safe.

How was he able to make such a call? Partly because – like Matthew Freud – he is owner of a big, successful agency without other major shareholders. And partly, and this is the interesting bit, because he believes there’s a real opportunity for brands, his clients, to increasingly switch to socially beneficial activities.

Edelman talks of some of his own big clients’ ethical initiatives. Unilever, that huge spender on PR and marketing services, has offered about £500m in relief to ‘vulnerable suppliers and retail customers’ in the form of early payments; HP is using 3D printers to make protective masks for hospitals; Microsoft is producing special health apps.

Most successful PR agencies are now involved in purpose-driven work by the private sector and there have been many great examples of late.

In the UK alone, we have seen the country’s famous Formula 1 industry joining forces to make equipment for the virus fight, and luxury firm Burberry making surgical gowns.

I believe we are seeing what will become a landmark in reputational terms. Brands that have genuinely done the right thing in this period will be seared into the public consciousness for many years to come.

Edelman research earlier this week revealed that two-thirds of consumers, globally, said how brands responded to the pandemic would have a ‘huge impact’ on their likelihood to buy their products. And WPP boss Mark Read referred to US surveys where 84 per cent of people said they’ll be extra-loyal to businesses that behaved well during the crisis.

This applies to company chief executives too. It was reassuring to see Sky’s chief executive, Jeremy Darroch, announce yesterday that he is donating six months’ of his salary to aid charities.

The opposite is also true. Over the past week there has been a huge juxtaposition in the sports world between FC Barcelona, where the players have given up 70 per cent of their salaries to support club staff, to Tottenham Hotspur Football Club, which sought state aid for its furloughed staff, without any immediate drop in its (currently non-playing) footballers’ pay, and as owner Daniel Levy pocketed £7m in profits.

Henry Winter, chief football writer on The Times, and someone who has been supportive of Tottenham over the years, described it as “a PR disaster for clubs likes Spurs and the Professional Footballers Association, and its chief executive Gordon Taylor”.

The key point is that companies and leaders shouldn’t wait for the media pressure to become unbearable, they should be reading the situation and taking the initiative by doing the right thing. The best comms advisers, whether comms directors or consultants, will actively convince them to do so.

Opportunity

This is a real opportunity. For real leadership.

Generally, my other great cause for cheer this week is that the business world just seems to be more caring than it was in previous decades.

The ‘greed is good’ sentiment, characterised by the Thatcherite 1980s, which was still noticeable when I started my career, is much less prevalent. Yes, it still exists – not least in the financial sector, where many banks have continued to pay out bonuses and dividends in the midst of this crisis – but much less so than in even the late 2000s.

That fact that about one million people have already volunteered to help the national effort to combat the pandemic is a source of great pride.

And on a day-to-day level, I notice more and more examples of colleagues and peers reaching out to, and looking out for, each other; of local community help and support; acts of sheer kindness.

We all have an obligation to turn this ‘war’ to society’s long-term good beyond the immediate survival of our businesses.

Danny Rogers is editor-in-chief of PRWeek UK


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