By: Tony Fratto, firstname.lastname@example.org
Having played a role in the Bush Administration’s response to the 2008 global financial and economic crisis – and then helping firms manage their way through the onslaught of policy changes and investigations in the aftermath, there are important lessons to keep in mind as firms navigate this crisis. Remember that government officials are focused only on the very near term and have little capacity to think long-term. They’re naturally more interested in how you can solve their problems now than on the consequences of those decisions down the road. It’s your job to consider how the things you do today will look in the future.
Don’t Miss The Exit
- Think long-term about your strategic business decisions – especially if you are considering entering into federal assistance programs. You have to think as much about how to get out as you are thinking about how to get in, because the exit will come faster than you think. Amid a crisis, many people are forgiving of clumsy decision-making – they understand we’re in a hectic economic and policy environment. They’ll be far less forgiving when the dust settles. If you’re a firm directly responding to the crisis, you’re probably focused on the very near term – trying to determine how to protect your employees and do your job to meet the needs of the crisis. You have to plan today for the story you want to tell about who you are as a company when you exit the crisis. It’s challenging to think beyond the very near-term, but you must devote some brains and resources to plan for re-entry. You don’t want to get caught flat-footed when it’s time to get back to normal commercial activity.
- Especially communications with government actors asking for help. The global financial crisis taught many lessons, and one of them was to be careful when responding to calls for help from the government. I’m not saying “Don’t help” – corporations are a critical part of helping in this crisis. But I am saying be careful and catalogue and archive all decisions. When we in the Bush Administration encouraged large U.S. banks to absorb other troubled institutions, their response helped to mitigate the crisis. But every one of those banks was then saddled with legal, regulatory, and reputation weight of those decisions. Trust from experience: when a government official comes asking for help, record it, write it down, and do it in real time.
- There is no question that the enormous federal response to this crisis is a bridge over very rough waters. But for some officials, what we consider a bridge today will forever label it a “bailout”. Legal, regulatory, and media investigations are certain to follow in the wake of these efforts, and your internal deliberations can definitely become public. Cautionary guidance to your teams today is an important part of your crisis response.
- Have a bias toward public transparency about everything you’re doing now – both what you can and can’t do, and why. People hear things differently in a crisis. If you say, “We’re aiming to deliver 10,000 ventilators by April, but we need to work out complex details”, it’s human nature that people will hear the first part about you coming through in the clutch and disregard the second part about it being hard. Obviously, there are competitive concerns, but a critical goal must be to minimize confusion and frustration among all of your stakeholders – employees, customers, suppliers, the communities you operate in, investors, and governments.
- It’s important to remember that how you communicate now with all these stakeholders can have terrific positive benefits going forward well beyond this crisis. Again – be thinking long-term. This is an excellent opportunity to put in place standard communication procedures with all your stakeholders, and to do them in ways that will live on in the future.