Daily Coronavirus Webinar: Leading a business through lockdown

Overview:

Today's webinar took the form of a conversation between the CBI’s own Deputy Director-General, Josh Hardie, and the CEO of Northumbrian Water, Heidi Mottram. And it came at the start of what Josh described as a “really critical, pivotal” week – in which we’ll hear more about the government’s plans for reopening the economy. Given that Northumbrian Water, as an essential service, has had to keep going throughout the lockdown, and has learned a lot along the way, we were extremely grateful to have Heidi sharing her insights.

Here are the main subjects we covered:

• The forthcoming guidance on reopening
• The need for enablers
• Evolving the economic support measures
• The benefits of preparation
• The overwhelming importance of communication.

The forthcoming guidance on reopening

The government’s ongoing support measures are still “absolutely vital for keeping firms afloat,” said Josh – “and we’re not losing sight of that”.

However, the CBI has increasingly emphasised the need for a “plan for a plan” for the restart. This is, in part, because businesses need to know what’s coming next so they can make the most of any economic opportunities. But it’s also because, as Josh pointed out, “we’ve already seen a number of businesses expand their operations under lockdown” – and successfully, too.

The good news is that we should start seeing the guidance for reopening this week. “We do expect Boris [Johnson] to say something on Thursday and something, again, on Sunday,” Josh revealed.

The CBI has been closely involved with the formulation of this guidance – bringing the views of businesses to very centre of government – so we do have an idea of what to expect. It is, said Josh, going to be done on a “workplace-by-workplace” basis, rather than a “sector-by-sector” one, meaning that it will cover environments such as offices, factories, outdoor retail, and more.

We also expect the guidance to allow – what we have called for – “flexibility within a framework”. As Josh said, “some countries have been very prescriptive… that’s not a very UK way of doing things.” The guidance is likely to outline best practices but allow different businesses to apply it differently in their own individual workplaces.

Throughout this process, the CBI is eager to utilise its international reach – we are, for example, Britain’s representative at the B7 and B20, the business equivalents of the G7 and G20 – to investigate how other countries are handling their own reopenings.

The need for enablers

The reopening process isn’t just about what happens within workplaces – but also the conditions outside of them. Josh highlighted three “enablers” that will help businesses to get going again: schools, transport and personal protective equipment (PPE) such as facemasks.

On the first of these, Josh said that “clearly, the speed of reopening schools is crucial”. However, he added that that speed is likely to be determined by the all-important R number: “does [reopening schools] keep it below 1 or not?”

On the second, Josh suggested that one of the key aims of the guidance will be “taking the pressure off the transport systems”. This could mean that “those of us who can work from home may have quite a long time of working from home ahead of us”.

Heidi also revealed that Northumbrian Water has been paying close attention to the travel issue over the past couple of months: “Were we travelling more than we needed to travel?” In the past, the “biggest challenge” to their sustainability goals was “actually our travel” – “so there’s going to be some lessons learnt from this”.

On PPE, there are specific questions, Josh said, about facemasks – businesses still lack “really clear guidance”.

But, in general, the PPE position may be better than we previously thought. The CBI is currently conducting research into the supply of PPE and – although we aren’t yet finished with that research – there are signs that “unblocking” existing supplies could go a long way to help. We will report back as soon as we can.

Evolving the economic support measures

Government policies are also a form of enabler. As Josh put it, “if you have a phased approach to reopening, you need a phased approach to the economic support measures”.

The CBI is calling for an evolution of the Job Retention Scheme (JRS). “Furloughing is currently a hibernation tool,” explained Josh. “If you have different reopening times, you’ll need it to remain a hibernation tool for some but become a reanimation tool for others.” This would require more flexibility, such as allowing furloughed staff to also work part time.

Josh revealed that “we’re at the evidence stage at the moment” – speaking to different businesses about what they need from the JRS, and then feeding that information to the Treasury. He also added that the Treasury is “listening” and has an encouraging degree of “understanding” about the situation.

However, there does need to be some action on JRS soon, said Josh – not least because the new cliff-edge date, when businesses may have to start considering redundancies if the scheme isn’t extended beyond the end of June, is 15th May.

As for the government’s credit schemes, there has been progress on the main Coronavirus Business Interruption Loan Scheme (CBILS) – as we saw last week, around £4 billion has now gone out to SMEs. But that still only represents about 50% of applications so far and is far short of the money the government earmarked for the scheme.

It is our hope, Josh said, that the new Bounce Back loan scheme, with 100% government guarantees and a simplified application procedure for smaller loans, will help to get more money to the businesses that need it. “There may be lessons from that smaller loan scheme that you can then apply to the larger loan schemes.”

The benefits of preparation

Heidi manages a business that, like many others, has a range of different employees working in a range of different environments – from on-the-road maintenance workers to contact centre operators.

One of the key requirements for keeping this workforce going was preparation. “In the runup to lockdown, we already had a group thinking about what it might look like,” said Heidi, “already deciding on some of the things that later became government guidelines… such as non-contact handovers before shifts.”

But some of the preparations were less pandemic-focused. Heidi explained that Northumbrian Water had “invested in some new tech” that would help its employees to answer “thousands of calls” from home – but they did so in anticipation of situations such as “bad weather”. She added: “It turned out to be an absolute godsend.”

The overwhelming importance of communication

The most important ingredient of Northumbrian Water’s response, however, has been communication. As Heidi put it, “We really have gone into communication overload.”

To some extent, this has been about introducing new formats of communication between management and the general workforce: Heidi described an online weekly broadcast that she now hosts for the company, as well as various new briefings and intranet portals. “It’s not just about conveying business information, it’s also about having a laugh.”

But what matters in every case, said Heidi, is that the communication is “two-way” – “your employees need to be listened to and know that they can make suggestions that will lead to changes.” It is this two-way communication that builds trust all round.

As an example of this, Heidi described how Northumbrian Water’s maintenance staff are now using a pre-existing company app to describe what does and doesn’t work as they try to maintain social distance: “We’ve had 3,000 reports sent in by employees about things that are working – and what could be done differently in future.”

“It has been dynamic,” concluded Heidi, “and we’ve learned a lot.”

Key questions we answered:

1. To Josh, regarding what the next wave of economic support may look like, and the possibility of a staggered re-opening, what do you think are the areas people need a better understanding of?

• We are having conversations with Treasury on this right now.
• There is an understanding that if you have a phased reopening, you need a phased approach to the changes in economic support measures. Furloughing is front and mind for many sectors as it is a hibernation tool.
• If you have different parts of the economy opening at different times, you will need furloughing to be a hibernation tool for some businesses but a reanimation tool for other businesses.
• The government have told us they recognise this is a fast-moving environment, so they are open to ideas to evolve their plans. I think Rishi Sunak has demonstrated this willingness to evolve the measures time and time again.
• On the Job Retention Scheme, last week we talked about the possibility of a flexi-furloughing scheme and a hibernation scheme. We are at an evidence-building stage of this at moment, focusing on what the model may need to do rather than how it can work in practice.

2. To Josh, what is your assessment of the CBILs scheme?

• The bounce back loan scheme comes in today. The hope is that it has a turnaround time of approximately 24 hours, so we are hoping it works. It’s key for it to work and get money to businesses quickly.
• On CBILs, while there was a lot of progress last week with £4bn lent, we still have many businesses not getting the money they need.
• This highlights the importance of the bounce back loan scheme and we have to continue pushing to ensure this money gets out of the door as quickly as possible.

3. To Heidi, how have Northumbrian Water managed to remain open safely, and what changes have you had to make to mitigate the impact of Covid-19?

• We were already thinking about safe operating prior to the lockdown as we were one of the few companies that had to continue operating regardless.
• If you think about contact centres, we were in good shape as we had invested in new technology that we thought may help us in bad weather. It turned out to work really well for this scenario.
• We were able to answer thousands of calls per day with our employees working from home. This has informed our lessons going forward.
• The more challenging situations involve staff going to an incident in the street. Our people now go in vans on their own with tools. They must observe social distancing. We also have PPE for our staff.
• Given we have a varied workforce, we have issued different instructions on different ways for our employees to work safely, be they working on maintenance outdoors, or working from home.
• The key to making all this work is communication. If you involve your employees on safety protocols, they can inform you on what is safe and practical. This leads to better decision making.

4. To Josh, how are you advising companies to deal with PPE and their reputation more generally?

• This is a monumental crisis and reputations are forged during a crisis – because they bring out our natural behaviours.
• We want people to see what businesses are really like.
• There is a huge amount that consumers, and society, are noticing about the true nature of business. We want to take that into the future.
• Two parts are important.
  • Employee engagement – if we don’t get that right then restart will falter. Employees must trust that their employer will look after them.
  • PPE – businesses were worried they may be taking essential equipment from the NHS to begin with. The supply challenges may not be as severe as we first thought. Unblocking the supply appears to be the main challenge we need to tackle.
• This has made a lot of people realise that businesses involve real people doing real services for them. I think this has given businesses a human face.

5. To Heidi, has Northumbrian Water been given enough information by the government on the needs of vulnerable customers?

• Water companies maintain a register of people with particular needs. These have become really important. We are working with other utility and water companies to share as much information as possible.
• Protecting people’s personal information via GDPR is also important and a balancing act while we try to target those who need support the most. We are working with the government on that.
• We are emailing and texting our customers who we know may need targeted support. These communications involve information on payment holidays, social tariffs or other support schemes they may need to access.

6. To Josh, on public transport, what considerations should businesses be aware of?

• On the reopening of public transport, we understand there will be advice, not rules, for companies on staggering worktimes. All of this is designed to ease the pressure that the system will face.
• Those of us who can work from home, have quite a long time of working from home ahead of us. This takes pressure off the transport system.
• There will be call for businesses to do all they can to support that by not compelling people to come to work.

7. To Heidi, are there any lessons from this crisis that will change Northumbrian Water’s future operations after the pandemic?

• We have tried to capture lessons as they occur during this crisis. I expect there will be big and small lessons to come.
• We have moved faster than we thought we could before. We are determined to retain this culturally after this subsides. We have also proved we are more resilient.
• On the communication side, we found that doing a big broadcast to the company once a week has been a great way to bring people together and have a conversation.
• We have also seen good practice on protecting people’s mental wellbeing during this crisis, with regular communications to check up on our employees.
• We need that to be a two-way conversation, so employees are consulted and their input impacts our decision-making. We then need to tell them what has changed because of their input.

8. To Josh, if we continue to have many firms not receiving government support from the CBILs, is there an appetite to re-think the scheme?

• For the 50% of applicants who have not yet received the money, hearing that ‘money is going out of the door’ is of zero use to them.
• The bounce back loans are a re-design of the system to speed things up. We will need to look at the figures daily, which Treasury does.
• If this doesn’t work, it may be time for a fundamental re-think of the support scheme.
• We are talking to the Treasury about this daily, so if there is a fundamental problem, I am sure the Treasury will be open to suggestions on how to change the scheme.