Since COVID19 arrived, it worked like a whiplash as the world moved overnight from distant observation and cautious health advisories to shuttered businesses and populations sheltering in place. By the end of March about 80% of companies shifted close to 70% of their workforce to working from home. Unemployment rates precipitously surged in the US to 14.7% in April and flattened a bit to around 10 % in the fall. The long term projections were troubling showing further cost containment measures pushing unemployment levels up again as the consumption slumped to the unprecedented levels.
The recovery debate has taken multiple forms but most agree it will not be a V- shaped rebound. The majority opinion is that by all measure it will be a K-shaped crawl back with some industries outpacing others. We are still watching what will drive the recovery, what trends will persist and which ones will become the “new normal.”
Here we take a closer look inside the organizational firewall to focus on how Employee Experience (EX) has evolved from being primarily an HR project to coming into the center of organizational strategy bringing together members of the leadership team in the new and more productive ways. It turned out that an alignment and effective collaboration among the leadership team would eventually decide what shape EX would take and how successful it would become after the crises.
CEOS MODEL THE WAY
There is no question that companies’ CEOs play an outsized role in defining the focus and tenor of Employee Experience (Ex) culture or the lack thereof in every organization. The pandemic only brought it clearer into focus.
The actions of a handful of high profile hospitality CEOs whose industry was hit particularly hard early in the pandemic represented a study in contrast to the “shareholders first” crisis solution approach. Take the cases of Airbnb’s co-Founder and CEO Brian Chesky and Union Square Hospitality CEO, Danny Meyer.
On May 5th, Chesky sent a letter to his employees about to be laid off painting a picture of hospitality industry in distress while sounding the themes of company’s culture of belonging and commitment to its guests, hosts and associates. For guests, the company announced reimbursements; for hosts financial assistance. As he announced a 25% reduction in force, Chesky put forth a thoughtfully and compassionately structured “soft landing” solution. The outgoing associates’ package included healthcare, equity, computers and assistance with finding other jobs.
When we started Airbnb, it was about belonging and connection. This crisis has sharpened our focus to get back to our roots, back to the basics, back to what is truly special about Airbnb — everyday people who host their homes and offer experiences (Airbnb Newsroom. A message from co-Founder and Ceo Brian Chesky)
Danny Meyer, America’s premier restaurateur, was one of the first to let go of the majority of his 2000 employees.
Being the first to close is one thing, but I don’t want to be the last to open, and I do believe that it’s important for our restaurants and our brand to be out showing that you can do this, if you use the right methods to do it. (Masters of Scale Rapid. Response Podcast.)
Meyer gave up his salary, set up the emergency fund for his ex-employees and continued to hold town halls for both employees and alumni showing that they belonged and that he worked hard to retain their loyalty and connection in the hopes of bringing them back.
IT’S NO LONGER A LONE CFO’S WORLD
At pandemic’s onset, it looked like the familiar CFOs playbook of “slash and burn” might be deployed again. Would the CEOs be leaning heavily on the CFOs to save the bottom line and to cost cut their company’s way to recovery? Would CHROs role be to execute the layoffs? This time around, that approach spectacularly backfired. Take the WW (Weight Watches) case (https://www.nytimes.com/2020/05/22/business/weight-watchers-firings-zoom.html). A few thousand employees were let go instantaneously over a few minute video call in early May. National condemnation showed just how much the pandemic context mattered and that how much public opinion has moved towards a more empathetic, people centric approach in crisis management.
In fact, a new corporate triumvirate, a new three-way alliance emerged as a defining strategic relationship in the crises. The CEO, CFO, CHRO joined ranks to ensure business continuity with people at the center. Making tough calls this time around had to be counter balanced with empathy and care for the wellbeing of the employees. As one business leader noted praising the CFO for the “practicality, creativity, and lens of humanity” that he brought to the company’s decision process A successful CFO in a pandemic is taking a longer view of the business focusing on the relationships, redesigning their rewards systems for medium to long term performance and in most cases in close consultations with HR.
CTOs SHARE RESPONSIBILITY FOR CUSTOMER AND EMPLOYEE EXPERIENCE
The pandemic accelerated the transition of CTO/ CIO role from organization’s technology experts to cross-functional leaders.
“I don’t think it has changed the direction in which we’ve been heading. I think that our more progressive CIOs had already shifted in this way,” noted Bob Kantor, IT management consultant. “What I do think the pandemic has done is clarified this reality and incented more CIOs to get on board with being business leaders, and not just technology leaders.” (https://knowledge.wharton.upenn.edu/article/can-cfos-better-financial-leaders-age-covid-19/)
Customers and employees became CTO’s priority as much as technology and business continuity had already been. To quote Scott Dufour, Global CIO at FLEETCOR, “The pandemic is bringing the integral role IT played in customer service and employee engagement to the forefront,” “Specifically, our IT team is keeping the workforce productive, while ensuring our customers continue to have access to the products and services they rely upon during the pandemic.” https://enterprisersproject.com/article/2020/8/cio-role-how-pandemic-changed
IT leaders have been called upon to enable a remote work model and open the door for HR to adjust and adopt its practices to transition to digital and remote modality. Digital recruitment, retention, on boarding, performance assessments and the rest of the HR services now became the day to day reality of the remote employees. If nothing else, the pandemic has managed to accelerate a close partnership between HR and IT in the service of the remote working.
CHRO TAKES THE PANDEMIC CENTER STAGE
The March issue of the Economist (The Economist 2020/03/24/ was one of the first to announce the rise of CHROs as companies’ stewards of business continuity and eventual revitalization. “The Coronavirus Crisis Thrusts Corporate HR Chiefs Into the Spotlight,” read the issue’s headline. The Pandemic became a human crisis first, economic crises second and social justice crises third. As Jonny Taylor, CEO of SHRM remarked “In the earliest days, we thought [coronavirus] was strictly a health-care issue. But it became clear how quickly it morphed into a people issue and how CHROs are playing a critical role in helping their companies get through this”
For the majority of organizations, the magnitude of the pandemic’s impact revealed inequities and inadequacies of their existing people management approaches. Prioritized were health and safety, remote working, and taking care of the vulnerable employees while traditional HR practices had to be paused. For many companies, traditional annual recruitment cycle was put on hold for the months of business uncertainty. Monitoring and assessing performance had to be suspended for the whole year giving employees time to re-calibrate and resettle in the new work context. The opportunity to create something new and better while working on agile teams and accelerating digitization created the much needed space for disruption and pivot towards the EX culture at large.
EMPLOYEE EXPERIENCE AS A TEAM SPORT
There are many lessons to be learned from the pandemic. The unpacking of its significance and impact will continue through the rest of the century. However, when it comes to organizations and cultures a few things have already been established.
• Employee Experience is about business’ resilience and continuity, not a nice to have HR project.
• Employee Experience must become the focus of organization’s people strategy. Everyone matters, not just about the top 10% of HiPos including the contractors and essential workers in the front lines.
• Employee Experience is not a CHRO’s solitary mission. The entire executive team has an important role to play. From the CEO making it a cultural priority, the CFO ensuring financial viability and a priority investment to the CTO providing the technology infrastructure that allows Employee Experience process to be scaled to each and every employee.
The tipping point in the company’s culture towards commitment to Employee Experience is neither digital tools nor remote working, nor a visionary HR strategy. It takes an aligned management team committed on making Employee Experience the priority in all aspects of business: in strategy, financial management, digital infrastructure and capable HR team. With the senior team on board, the CHROs now have the green light to scale.