With President Trump signaling that he wants America to get back to work, maybe as soon as mid-April, and a growing chorus of free-market economists and even a few public health experts suggesting that the nation’s current approach to the COVID-19 crisis might be overkill, navigating this situation is about to get a lot more challenging for U.S.-based businesses.
For the past few weeks, businesses have been able to operate in an environment where everyone was playing by the same rules. There were no reputational costs to pulling out of events or mandating work from home policies in those first days, or even furloughing employees more recently. The unified guidance from the political leadership and health professionals gave all companies a level playing field, and permission to prioritize the health and safety of their employees and stakeholders.
But in the days and weeks ahead, the consensus that has largely existed between health, political and business leaders could start to fracture. Trump has never been comfortable playing the same game everyone else is playing. He’s a disrupter at heart, and he knows that at some point the clock on the November election will inevitably re-start. It’s easy to imagine an environment where an antsy president begins making recommendations at odds with the World Health Organization and even his own public health advisers. Or the administration changes its official guidance, only to see Governors defy it at the state level. Already, influential public health officials like Yale’s Dr. David Katz and leading intellectuals like New York Times columnist Tom Friedman are suggesting a more nuanced, “surgical” or “vertical interdiction” strategy over the one-size-fits all approach we’re currently following.
Amidst a sea of conflicting perspectives, and a zig-zagging patchwork of policies, American companies will be left to go it alone when it comes to making life and death decisions about their business and their people. There will be no national consensus to guide them. Instead, it will be more like those confusing initial days of the crisis when there were no rules of the road.
In this more fluid environment, where anxiety remains the prevailing emotion, and with public sentiment likely to fracture along the same cleavages as the nation’s leaders, there will be real reputational considerations to the decisions companies have to make. There could be backlashes for bringing people back to work, especially if it leads to an outbreak cluster in the workforce. For other companies, there could likewise be backlashes for not bringing employees back. What is a company to do if their headquarters are in a blue state like California and their plant operations in a red state like Texas?
Companies would be wise to start contemplating this scenario. What will inform their decision making if the public guidance starts to diverge? What will be the north star to guide their actions? How will they react if employees lose confidence in their leadership, or if investors do? How will they respond to pressure applied by activists and anxious consumers?
The vacuum will provide an opportunity for trade associations and industry groups to assert their leadership. It was just one year ago when the Business Roundtable jilted the tectonic plates of the business landscape by saying we are entering a new era, one where companies should treat all stakeholders equally, and not merely prioritize shareholders. And individual companies should see this moment as an opportunity as well. When this crisis is over, there will be a public evaluation of the winners and losers. No one will be immune from the scrutiny.
Markets abhor uncertainty. This global pandemic is providing plenty of it, but at least in one regard, the last couple of weeks have provided American businesses with some certainty on how they should be responding to the crisis. If the consensus breaks, more uncertainty will be injected into the system. For most businesses, the easy part might soon be over. The choices they make in the coming phase will have lasting reputation implications that define them long after the pandemic is over.