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Already scarred by the global financial crisis a decade ago, a generation of younger people is bearing the economic brunt of the coronavirus. Even billions of dollars in global fiscal stimulus is struggling to cushion the blow as the pandemic worsens generational inequality.

Take Australia as an example. Despite a A$260 billion ($180 billion) injection of financial and economic support, unemployment among 15 to 24-year-olds has surged to 16.1%, compared to about 5.5% for those over 25. That’s in a country that hasn’t seen a recession since the 1990s and is in the vanguard of nations containing the virus.

About a quarter of younger workers aren’t eligible for the Australian government’s flagship wage subsidy package because they are on casual contracts and haven’t been employed for 12 months, according to Catherine Birch, a senior economist at Australia & New Zealand Banking Group Ltd. That compares to just 6.5% for all other age groups.

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Elliot Matthews, 21, is one of the unlucky ones. In April, when he learned there’d be no more shifts at the Sydney hotel where he worked, he was just two weeks short of a year’s employment. “That’s a very hard window to fit into,” Matthews said of the government requirement. “While it’s a dark time for everyone, a lot of people are falling through the cracks.”

It’s far from just an Australian story.

As the pandemic drags on, it’s exposing generational fault-lines that were set in train a decade ago when the financial crisis hit Millennials hard and left Generation Z — described by Pew Research as those born after 1996 — with a legacy of insecure work and stunted opportunities.

Across the west, seemingly regardless of the fiscal support, the youngest workers are more likely to be out of a job.

Generational inequality in Australia has long been an issue. Youth unemployment hovered above 12% pre-Covid, higher than in the U.S., the U.K., Singapore, Japan and Hong Kong, according to the World Bank. Home ownership among young Australians is at an all-time low after prices surged beyond their reach — pushed higher in part by generous tax breaks enjoyed mostly by older Australians on their investment properties.

As the coronavirus tips the economy into its first recession in almost 30 years, those issues will be compounded.

“Substantial, targeted, ongoing support, additional to current policies, are needed to ensure young people aren’t left behind,” Birch said. “The labor market for young people is more precarious going into the current shock than it was pre-global financial crisis.”

It’s a similar picture elsewhere.

In the U.K., one-third of 18 to 24-year-old employees, excluding students, have lost jobs or been furloughed, compared to less than 15% of 35 to 44-year-olds, according to research from the Resolution Foundation think tank. Those in atypical jobs, such as zero-hour or temporary contracts, fare much worse. To qualify for Britain’s job support program you just had to be employed on or before March 19.

The casualization of so many jobs for Generation Z has its roots in the last financial crisis. Many entry-level roles were cut and never returned, forcing young people to stay in industries like retail or hospitality for far longer than previous generations, according to Shirley Jackson, a research economist at Per Capita, an Australian think tank that explores issues of inequality.

Going into the pandemic, more than 18% of Australian 15 to 24-year-olds were classed as “underemployed,” more than double the rate of any other age group in Australia and 7 percentage points higher than in 2008, according to Birch. That compares to 12% in the U.K., according to the nearest comparable data from the International Labour Organization.

“The narrative is that we don’t work as hard as our parents, we complain more than they ever did and that we waste our money on silly things,” said 25-year-old Greens Senator Jordon Steele-John, Australia’s youngest sitting member of Parliament. “There are far more people seeking to work than there are jobs for us.”

The crisis, and the Australian government’s response, also risks widening the wealth gap. Australian homeowners, for example, can apply to defer their mortgage payments under a huge program in place for at least another three months.

The temporary moratorium on evicting renters expired in mid-June in the most-populous state of New South Wales and they have largely been left to negotiate with landlords on their own.

“In these kinds of crises, we find out what is already broken,” Tenants’ Union Chief Executive Officer Leo Patterson Ross said. “This will increase the inequality already there between those who own property and those who don’t.”

Another option for those in dire straits is to access their pension savings. Normally near untouchable until retirement, the government has eased the rules on early access. There isn’t comprehensive data on just who is accessing the money, but signs are emerging of the young cleaning out meager pots.

Australia’s Minister for Youth Richard Colbeck, 62, declined a request for an interview. In an emailed statement, a spokesman said the government is “aware young Australians are very concerned about their employment prospects”. He pointed to pre-Covid training initiatives “focused on giving young Australians the right assistance and encouragement to learn new skills, become job ready, get a job and stay in a job.”

Matthews said that he’s been able to live with his parents and now that the economy is opening up, he’s managed to pick up a couple of shifts at a restaurant he worked at previously. Still, he’s aware how vulnerable his generation is.

“I’m not really future-proof at the moment,” he said. “I don’t have a lot of savings to fall back on.”

Jackson, the economist, put it more bluntly: “Generational scarring -– leaving young people outside the labor market for long periods of time — makes them less likely to get better jobs in the future,” he said. “It’s a ticking time bomb.”

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Some U.S. states are facing disproportionate financial challenges due to the pandemic. Plunging tax revenue, unemployment, and rising healthcare expenses, coupled with high levels of existing state debt have driven some states into acute financial distress – threatening the nation’s unity.

This is not the first time the U.S. has confronted a common, disparately borne struggle. In 1790, Alexander Hamilton spurred the federal government to take over the debt accumulated by states in the fight for independence. It was the “price of liberty.” The agreement caused controversy, particularly among the states asked to contribute more. In the event, unity prevailed, and the nation strengthened.

Today, a similar act of solidarity is needed. To be clear, we are not suggesting indebted states be bailed out, but they should not be made to pay for their pandemic-induced financial strain. Instead, the incrementalcosts states incur during recovery should be considered the “price of unity” and shared at a national level, as they were over 200 years ago.

Investors, however, seem pessimistic about U.S. unity. In fact, judging by financial market indicators, they have already chosen which states are likely to come out on top post-crisis (the likes of Texas and Florida), and which will pay most dearly (California, Connecticut, Illinois, Pennsylvania, New Jersey, and New York). This divisive verdict does not foster “a more perfect union,” which the US needs today to maintain its status as the world’s most powerful economy.

What are the markets saying?

We know which U.S. states investors are most wary of; we can see the evidence in the current, volatile prices of state-specific default insurance that we examine in our research. The trajectory of these prices, as calculated based on data from IHS Markit, predicts that, over the next five years, New Jersey, Pennsylvania, and Connecticut have a 1-in-10 chance of defaulting on their debt, and Illinois a whopping 1-in-4. These numbers are in stark contrast to the 1-in-60 risk of default recorded for Florida and Texas over the same horizon.

This is surprising. While Illinois’ protracted financial woes and pension obligations are not new, investors’ negative perception of the other five states is. In January 2020, the cost of insuring against the default of California, New York, Florida, or Texas was roughly equal. Today, default insurance for California and New York costs around four times that for Florida or Texas.

What explains the market reaction?

There are three reasons for such a large disparity in default perceptions across states.

First, some states have higher COVID-19 infection rates, which certainly strain a state’s finances. But, infection rates do not tell the whole story; Florida has the largest share of at-risk population, and its per capita infection rates are roughly equal to California’s, while its default risk has hardly budged since January.

Second, all six states with the largest spikes in default risk have high debt levels and overextended budgets. In short, as we have seen with the EU, the markets believe that only the fiscally strongest states avoid default. Yet, unlike the members of the EU, each state is not a separate entity, but an integral part of the United States (whose default probability has remained low, despite unprecedented debt levels).

Last, these six states are predominantly Democratic. While Democratic-favored policies, such as subsidized healthcare, certainly left these states with less fallback finances, Republican implications that they be left to go bankrupt after suffering a shock beyond their control seems irresponsible.

Why does debt matter?

The sting of negative market perception is felt as tax bases shrink, rainy day funds of even well-managed states run dry, and state governments are forced to turn to financial markets to borrow additional funds to meet their budget commitments.

States perceived more likely to default will pay higher interest rates on their debt, making their recovery more arduous. Raising additional debt is more difficult and expensive, as Illinois recently discovered when it committed to paying a punitive 5.85% interest on its $800 million of new debt. Had Illinois issued the same debt before the pandemic, they would have paid half as much.

Although some may experience schadenfreude in seeing a “poorly-run” state forced to tighten its belt, it seems unjust not to aid a struggling state amid a global economic and health crisis.

Where is the unity?

Unfortunately, withholding support seems to be exactly what some leaders favor. Senator Rick Scott (R, Fla.), in a recent Wall Street Journal op-ed, asserts that states should not be rewarded for their “poor choices”. This solution is particularly unfair to strapped cities on those states. Detroit, for example, despite having recently emerged from near-crippling municipal bankruptcy, is being bowled over again by the financial consequences of the pandemic; its recovery will almost certainly require state government aid. With no compromise in sight for easing the economic burden of the most indebted states, residents of cities like Detroit face steeper taxes, reduced efficacy of municipal services, and risk having to choose between pensions and medical coverage.

Although the $3 trillion coronavirus relief bill recently passed by the House ($1 trillion of which will be reserved for state and local governments) is a step in the right direction, President Trump’s veto threat suggests that the U.S. may not be quite ready to set aside their party politics. Unfortunately, such comments will only serve to deepen market concerns, making it more difficult for the overburdened states to finance themselves. 

What the U.S. needs now are the same actions it took over two centuries ago: compromise and unity. Indeed, now is not the time for them to practice political distancing – at least not in the room where it happens

Patrick Augustin is an associate professor of finance in the Desautels Faculty of Management at McGill University.

Valeri Sokolovski is an assistant professor of finance at HEC Montreal.

Marti G. Subrahmanyam is the Charles E. Merrill Professor of Finance, Economics, and International Business in the Stern School of Business at New York University.

Davide Tomio is an assistant professor of business administration in the Darden School of Business at the University of Virginia.

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Business communication has always been important, but it is doubly important in crises.


4 min read

Opinions expressed by Entrepreneur contributors are their own.


Communication has always been a crucial element of business operations, regardless of the size or location of the company in question. Being able to communicate effective is crucial to defining a brand and putting the best foot forward with customers. When done effectively, business communication can boost a company’s products and services to immense profitability, or sink the company, if done poorly.

Business communication in normal times is very different from business communication in times of crisis. The stakes are higher, and leaders must execute their communication efforts perfectly. Here are a few strategies you can employ to do just that:

Resist the urge to profiteer

When it comes to a crisis situation, the worst position to be in is that of an organization that is seeking to take advantage of the situation. When people cannot blame the cause of a crisis on anyone, they will likely be all too happy to focus all their anger on people they believe are making it worse. Needless to say, the best (or worst, actually) example of this is all the businesses that hiked prises during the health crisis, making essential supplies too expensive for many people to afford.

Apart from severely damaging their brand equity, many of those businesses are facing regulatory censure. On the milder end of the scale, opportunist tactics to make sales must be avoided in your communications. For instance, Subway’s tying the receipt of masks to purchases was a very poorly thought out and damaging approach. Instead, focus on bringing relief to your customers and the public by highlighting discounts or incentives your business is offering, and how those gestures will help people cope with the crisis better.

Related: 14 Proven Ways to Improve Your Communication Skills

Helpful and timely information

In a time of crisis such as this, people will understandably have a lot of uncertainty regarding what to do. Your brand can help by sending information that is relevant to the time and place, and helping people make the right decisions to stay safe and ensure their health. Such gestures will certainly be remembered and appreciated, and the degree of those emotions will be directly tied to how timely and helpful your content is, as explained extensively in this McKinsey report.

When doing this though, it is important to be cautious and ensure that you are only sending verified, accurate information. According to Yaniv Masjedi, CMO of Nextiva, “Sending nothing at all is better than sending something that turns out to be inaccurate or worse still, harmful. If possible, you should also link to or at least reference to the sources for any information you are citing, where such information is scientific, legal or similarly sensitive in nature.” That will increase how helpful the content is because people can go cross-check or get more info, but crucially, it also gives you a layer of insulation, in the event of any subsequent issues with the information.

Related: 4 Simple Ways to Communicate Better With Your Customers

Stay responsive and consistent

In a crisis on the scale of the ongoing health crisis, everyone will understandably be rattled, so it’s important for your business to continue communicating with customers using all available technology channels. You should do everything in your power not to seem as if you are in panic mode to customers. The most common ways this manifests is when people (customers, partners, media) cannot elicit a response from you. Silence gives the opportunity for those people to fill in their presumptions and as everyone’s panicking, those presumptions are likely he worst kind. This can lead to lost sales or other opportunities, as well as a damaged reputation where such silence amounts to poor customer service.

Businesses also often lack PR cohesion during a crisis, resulting in a situation where enquirers are hearing one thing from the Facebook page and getting different information from the Twitter account. Obviously, that would not inspire confidence in customers that yours is a business they can trust at the time. The cause of such issues is often teammates being out of touch with one another. The first solution is to ensure that there is a comprehensive communications plan from the beginning and the second is to make sure that the plan is updated and accessible by everyone who might be speaking on behalf of the company.

Related: 3 Things That Will Boost Your Team’s Communication

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7 min read

Opinions expressed by Entrepreneur contributors are their own.


Covid-19 has wiped out dreams, created a psychological nightmare, and torn a country apart, with individuals questioning what is the right, or wrong, thing to do. The result? Nobody has been untouched.

But, like any crisis, there are lessons to be learned. In the business world we had to rethink employee communications, crisis strategies, technology capabilities, messaging, external communications, new business strategies and business operations – all practically overnight. We had to have all-hands-on-deck and we had to take an honest look at what was in place, what was missing, and what we had, but was no longer relevant. We had to take a solid look at what happened and where we landed to fully understand how we could successfully ride the storm and move forward, with the least amount of destruction. But there can’t be any blinders on. It’s a time for truth. And it’s not always pretty to look at the holes and the lack of strategies that were in place. But it’s real. And now is the time to truly reflect and get the “house” in order if you have not done so.

The bottom line is that we must do two major things:

1. Reflect on our communication. What were we saying and how does that need to shift? What methods were we using and is that still relevant? Who was our audience and has this changed?

2. We need to generate more business to replace what has been lost. Things are not the same therefore our tactics should not be the same. It’s time to shift the mindset.

Here are the top suggestions to communicate better and, through marketing, to rebuild what was lost:

5 Ways to improve communication and marketing

1. Increase video

If there was ever a time to use video as part of your communication strategy, now is that time. The visual element doesn’t allow for sugar coating like the written word does. We can look at your eyes and see your body language. It’s all there. In a situation like this, that’s a positive because we need to see the human side. Use it to share your story. What has your business gone through? Be vulnerable. Take time to create a video calendar that isn’t about your products or services. Talk about how you felt. Talk about missing your customers. Talk about your amazing employees. Talk about what will be new and why you’re going down that road. People buy from companies because they have a need or because they believe in a brand – but they also purchase because they like you. Keep this in mind and remember to keep it real through the use of video.

Related: How to Minimize Risk and Protect Your Money During Times of Crisis

2. Introduce repetition

You must be consistent in your message. If you don’t have one, create one. Then, share across all your channels, often. Use infographics, videos, blogs, newsletters, eBooks, and emails. But the message should be the same, just a different format. Share across your website, create content that gets published into third party outlets, and use as content for social. The point is consistency and frequency. You have a lot to say – now is the time to get your message out there.

3. Insist on the truth 

This is not the time to sugar coat your communications. Your employees need to know the lay of the land and your clients and vendors need to know where they stand. If you fell hard, be honest, and share what you are doing to pick up the pieces. If you have found a way to diversify during these difficult times, let them know why things are changing and how they will be impacted. If things are going well, give them a sense of hope – which is so needed right now. This is not the time to sweep your communications under the rug or to minimize what is going on behind closed doors. Be transparent as respect builds loyalty.

Related: How the Legacy of the Pandemic Will Reshape the Future of Work

4. Improve timeliness

Look at what you had in place. As we were hit by Covid-19, did it hold up? Was something missing? Were the right people informed? There must be a plan in place, for next time. It may not be a pandemic and it may not be this catastrophic, but there will be a next time that communication is imperative, and employees, clients and vendors want and need immediate information. Therefore, time is of the essence. Who will be impacted? How will they be impacted? How long will the changes last? Will there be new policies in effect? Don’t keep those that are invested waiting or you may lose those that mean the most to you.

5. Invest in creativity

Everybody always talks about this element. But few do it well, or at all. What do I mean by this? Simply, stop selling. Many may be thinking, “What is Doreen talking about?” I mean that your customer knows when you are selling something. That is why earned media works better than advertising – though both have their place. It is simply more credible. In a time of crisis, credibility is king. Find a way to get your brand out there and get your message across – with creative concepts. Some of my favorite ad campaigns never mentioned the product, until the end. As an example, a Renault Clio commercial kept me watching. It was relevant. It was emotional and it tied in social concepts that are real in our world today. We practically live in our cars – so, why not tie the commercial to real life? They did that and brought me into their sales funnel, without beating me down with their brand and without “selling.” Not everything has to stay the same. Nor should it.

Related: 12 Business Leaders on Rebuilding in the Post-Pandemic Economy

5 tips from pros to generate business

1. Help your customers

Tolithia Kornweibel, Chief Marketing Officer at Gusto, said “Resist the temptation to preach about how much you care. Just do something to help your customers. In times of crisis, if your future customers spend one second with your marketing that isn’t giving them help or value, you’ve failed.”

2. Build a win-win deal

Justin Halldorson, Managing Partner at Shift Capital, said “People love to say ‘just go buy Facebook ads’ or ‘get serious about social media,’ but that simply doesn’t work in times like these. There are a ton of opportunities for joint-ventures and partnerships right now. Find a way to build a win-win deal where you both benefit. A lack of cash can be made up for with an abundance of creativity.”

3. Shift your strategy

Kevin Dinino, President of KCD PR, said “There are three things you can do to generate lost business: 1) Reevaluate your customers’ needs and desires post-COVID and adapt your services and products to address these critical elements. 2) If you are selling anything online, consider offering payment plans to reduce the immediate financial burden for your customers and create a reoccurring revenue stream for your business. 3. Take advantage of declining ad prices.”

4. Double-down

Kevin Walker, SVP of Marketing at Issuu, said, “It’s likely other companies competing for your customers’ attention will reduce their marketing spend during an economic downturn. Now is the time to double down on your own marketing efforts and take advantage of a ‘quieter’ marketplace.”

5. Understand needs

Emily Pederson, Sr. Account Manager at Leighton Interactive, said “Retention is the new acquisition. Don’t forget about your loyal customers. While you may be hungry for new business, it’s extremely important to make sure you are servicing existing customers and making sure they are safe, happy, and healthy. Think about upsell opportunities when identifying what your customers need and work to identify ways you can be a guide during this post-pandemic world.”

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What you do with your money now will help you be financially prepared for future emergencies.

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5 min read

Opinions expressed by Entrepreneur contributors are their own.


The government has stepped in with a stimulus package to help businesses weather the storm, but the pandemic has illustrated the importance of financial preparation for households and businesses of all sizes. Consider the following ideas on how you can prepare to minimize your financial risk during an emergency or crisis in the future.

Reduce and eliminate debt

Debt in the form of credit cards, personal and business loans, and medical debt can represent a significant amount of your monthly budget. The debt you carry incurs interest which eats up a portion of your monthly debt repayment allocation. A percentage of each monthly payment you make goes toward interest, essentially slowing down your goal of paying off the debt in full.

Reducing and eliminating debt can free up a portion of your business or household budget so the funds can be redirected into more important goals such as growing a savings account or investing.

Related: 5 Ways to Leverage Market Downturns as Opportunities to Make More Money

Review your business and personal recurring debts to identify which ones are costing you the most. When you identify the highest-interest ones, pay them off first. A couple of ways you may be able to pay off the debt faster include the following:

Consolidate your debt

A debt consolidation loan is meant to combine your existing debts into a single payment. The loan should come with better terms than your existing debt and with a lower interest rate. Consolidating all higher-interest debt into a single, lower-interest loan simplifies your repayment schedule and saves you money on interest so you can chisel away at the principal portion of your debt faster.

Find passive income or start a side hustle

Boosting your current income to allocate the money towards repaying your debt may be one of the fastest ways to pay down your responsibilities. Consider starting a side business you can run on weekends or evenings to supplement your earnings, or branch out your existing business. Brainstorm business and side hustle ideas, do your market research to find what people need right now, put together a business plan, and get started.

Have a savings fund

When it comes to financial advice, most agree that an emergency savings fund that covers unforeseen expenses is a good idea. The pandemic is the perfect example of why the concept works. Individuals and entrepreneurs that have savings contingency plans are likely to fare better in a crisis.

The thought behind the concept is simple. Businesses and households that can cover at least three to six months of expenses can continue to operate and pay their bills for the short term. They’re better positioned to navigate a downturn or unexpected event and come out unscathed.

Related: 4 Fun Ways for Millennials to Dip Their Toes Into Investing

Others who didn’t save are all too aware of the impact of a sudden change to their finances such as a job loss, medical illness, or nationwide shutdown. Their income may have changed or stopped, but the bills are still due. Many turn to loans and credit cards to fill the gap, leaving them with heavy debt that could take years to pay off.

All businesses and individuals should actively add money to their savings or investment accounts. Aim for an amount that would provide a cushion of at least six months for business operating expenses or for your personal budget. Save aggressively until you reach your goal, and then set up an automatic savings plan to get yourself in the habit of consistently putting away money for the future.

Diversify your investments

Keeping six month’s worth of savings in a money market or high-yield savings account may be acceptable but not ideal. The interest earned is minimal, but you have access to the cash quickly in an emergency. Larger amounts of money should be allocated towards an investment portfolio. The crux: the market can be volatile, especially during a crisis. With the uncertainty in the air, investors get nervous.

Related: 5 Personal-Finance Mistakes That Kill Promising Companies

To mitigate some of the volatility, review your investment portfolio regularly to ensure you have a good ratio of stocks and bonds. Diversification is essential. Consider adding asset allocation funds, which take the guesswork out of diversifying your investments. Depending on your comfort level with risk, you can choose a 70/30 allocation fund, which maintains 70% of your investment in stocks and 30% in bonds. Also consider adding an index fund to your mutual fund holdings.

Be prepared

Remember the Boy Scout motto: “Be prepared.” If the pandemic has taught the world anything, it’s that it’s nearly impossible to predict how a crisis or emergency will affect you. Entrepreneurs are already comfortable with some level of risk. You can’t completely eliminate risk, but you can be financially prepared to overcome it.

 

 

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Engage in new ways – and with humor – to make customers loyal long beyond these stressful few months.


4 min read

Opinions expressed by Entrepreneur contributors are their own.


When you watch a movie or read a book that’s centered on a hero’s journey, you’ll frequently find a pivotal moment, the point in the story when the hero must commit to the journey or abandon it. Think about Frodo in the Lord of the Rings trilogy: He literally crosses the threshold when he leaves his home in the Shire for new lands, dangers and challenges. In The Matrix, Neo crosses the threshold when he takes the red pill that replaces blissful ignorance with uncomfortable, unsettling truth.

What does crossing the threshold have to do with marketing and branding your company in a crisis?  Everything.  

Related: 4 Businesses That Have Pulled Off Feel-Good Pivots on the Fly

First, I want you to think of crossing the threshold as your commitment to developing and promoting your brand during a period of crisis. But also (why use one metaphor when you can use two?) think of branding as the way you cross the threshold of your ideal customer’s consciousness, home and life.  Because branding isn’t necessarily intuitive, even during “normal” times, let’s examine some strategies and examples of companies that have gotten it right.

1. Be honest

One of my favorite examples of stellar brand building during the crisis is from Airbnb. Most folks on the planet have been anxious, worried about their health and their financial outlook. Millions worldwide lost jobs, and those layoffs forced many families to struggle, a prospect that’s bleak from an employer’s perspective as well. Part of brand building is cultivating trust, and you can’t do that if you’re being dishonest. When Airbnb’s co-founder and CEO Brian Chesky announced significant layoffs, he did so in a public letter. In the letter, Chesky laid out how and why the company was reducing its workforce, covering details like severance pay and job support for helping workers find other employment.  Chesky didn’t deceive. He didn’t sugarcoat. He was clear, thorough and honest, and that’s how brands survive difficult times.

2. Address real, relevant issues 

One thing you don’t want to do is carry on with your marketing as if everything were business as usual. As consumers panicked as a global health crisis started spreading, they bought up every scrap of toilet paper they could find. One of my favorite brand messages came from Cottonelle. Not only did Cottonelle encourage consumers not to hoard toilet paper, but it also encouraged people to “stock up on generosity” instead. It introduced a campaign, #ShareASquare, that partnered with United Way to get paper products to those most in need.   

Related: How a Montana Microdistillery Pivoted to Make Hand Sanitizer for NYC

3. Engage your customers in a new way 

IKEA, known for inexpensive furniture you assemble at home, opted for a clever, timely move. It released, via tweet, the recipe for its world-famous Swedish meatballs, complete with a graphic representation that looks just like furniture assembly instructions. Its message not only encouraged customers to focus on the comforts of home, but it also let people interact with the brand in a completely new way, by reproducing something that could previously only be purchased in a store. Twitter users could also reply, which yielded this gem from @garyswilkinson: “I got to the end of the recipe and there were still three screws left over.” Encouraging customers to interact with your company even when they can’t shop in person is great brand building.

4. Find out what your customers need

I saw countless examples of small, local companies doing just this. Some restaurants, unable to open for dining in, made hard-to-get-supplies available to-go. They sold fresh, high-quality meat and local produce, in addition to carryout prepared food. Craft distillers switched production to hand sanitizer when none was to be had for any price. And some beer and wine shops that were permitted to stay open broadened their product offerings to include other necessities. Some even offered a free roll of toilet paper or paper towels with purchase. 

Related: Long Beach Beer Lab Could Have Closed; Instead, They Became Essential

Customers remember companies and brands that give them what they need and want in a crisis. Whether it’s entertainment, education or everyday necessities, reaching out in memorable ways helps cement your brand in your customers’ minds.  Compassion, humor and optimism are all important during stressful, difficult times. Finding a way to connect s a vitally important step in the hero’s journey that is entrepreneurship.

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8 min read

Opinions expressed by Entrepreneur contributors are their own.


The COVID-19 global crisis has forced thousands of companies to switch to a digital first working model — almost overnight. This dramatic rate of change, while painful, is by no means serendipitous. Most companies have had, over the past decade, provided most of their employees with the pre-requisite tools to work from home (like smartphones, laptops, cloud powered shared drives, collaboration apps and chat channels), but neither employees nor leaders in these companies found the will to make the switch to what is arguably a more efficient way of working — until now. Digital transformation change programs, which have historically held failure rates as high as 70%, are seeing a renaissance as success rates have crept up in a time where everything else seems to be falling apart. 

It is not just global crises that make companies succumb to change. Any form of existentialist threat seems to be a great enabler for both leaders and employees to shift gears in a company. Apple in 1997 faced an overwhelming crisis — a drop in stock price to a 12-year low and a close brush with bankruptcy — which proved to be enough of a catalyst for its board to bring back Steve Jobs. Steve shifted the company’s focus from exclusively selling computers to selling music players and associated services (and eventually the iPhone). Marvel, on the other hand, did file for bankruptcy in 1996, which led to new ownership as well as a strategic reset away from comic books to a wider slate of entertainment properties. That’s what led to the now-legendary Iron Man film in 2008.

These companies could have changed direction prior to these crises hitting them — there was no lack of data and insight preventing them to do so — yet they remained in stasis until it was too late. While Apple and Marvel were lucky enough to survive their near-death experiences, others like Kodak, Nokia, Blockbuster were not.

RELATED: COVID-19 Will Fuel the Next Wave of Innovation

So why do companies need a crisis to change for the better? Are they not run by rational, highly qualified managers who are heavily incentivized towards detecting a shift in tides before it ever hits the ship? Are employees not continuously coached to embrace change and improve the company every day? One way of understanding this seemingly irrational behavior of companies is to compare it to the equally bizarre behavior of us humans, who too often wait for a crisis to hit before changing destructive habits.

The following are three common brakes against change for both companies and people:

1. Anxiety relief usually takes priority

In the 1950s, a research group called the Tavistock institute in London tried to understand people’s resistance to change. It had a breakthrough while observing nurses in wards. The nurses followed strict and repetitive medication and checkup procedures, even though that meant waking up patients from what would otherwise be much-needed (and doctor recommended) sleep. The doctors in this ward noticed the problem and gave the nurses new procedures to follow, but the nurses kept on following the old procedures—even though it was bad for the patients. Why? The Tavistock researchers came up with a hypothesis: The nurses were dealing with a very difficult situation, in which sick people could succumb to their illnesses on their watch, and so the nurses shielded themselves from this anxiety by clinging to rituals they were comfortable with. The doctors, meanwhile, hadn’t done any coaching or provided any support to help the nurses adopt the new procedures. The doctors had simply issued the new procedures… and then expected change to happen.

Fast forward to the modern-day workforce, and we see a lot of leaders behaving like those doctors. These leaders realize that a company needs to change in order to survive. However, in most cases, leaders simply dish out recommendations on how to ‘improve the situation’ to the nurses – expecting them to comply and make the ‘switch’. Older procedures (that helped contain anxiety) are aggressively berated while employees are asked to self-design brand new ones without much vision, sensitivity or coaching. This lack of support creates stress, and employees calm themselves by falling back on older processes and practices. That’s what looks like resistance to change.

Crisis changes all this. It creates a tidal wave of anxiety and urgency that’s far harsher than anything the organization faced before. Obsolete rituals are no longer any comfort. It becomes abundantly clear that new procedures and systems are needed. Suddenly the company, from its leaders to its employees, finds the courage, camaraderie, and momentum to change. If they are lucky and the timing is right, the company lives to fight another day. 

2. Rewards for change are usually too far off

Every year, in January, gyms see a sharp spike in memberships… only to see them dwindle in the later months. This phenomenon is both amusing as well as baffling. Why doesn’t the average adult invest a small amount of money and time every month to ensure that they have a long and healthy life? The answer to the question is simple: The consequences of not going to the gym for the average 30-year-old will only be felt 20 years down the road. This delayed reward of a healthier longer life in return for a painful session in the gym today pales in comparison to staying at home and binging on Tiger King.

The same holds true for companies. A challenger start up, a new business model, and a major technological breakthrough are all factors that have a measurable impact on the future of a company — sometimes coming in to full force only after a CEO is done with his or her stint in a company. However, bonuses, promotions and pats on the back are all linked to performance today. In theory, stock prices as an incentive should account for both the current performance and expected future performance of a company. However, in real life stock prices are quite volatile and can easily keep management teams focused on quarterly results, with a longer-term view taking a back seat.

A crisis wipes such a lopsided reward system clean. With no immediate bonuses and incentive programs to optimize against, thanks to a dwindling financial status and stock price, managers are forced to go back to the basics and think about the longer-term prospects of the company. Previously protected statuses of various departments become open for questioning. Budgets that have kept rolling along for years are picked apart and the vision and the mission of the company are brought under a microscope. The reward for overcoming the crisis by making fundamental changes in how the company operates and competes becomes overwhelmingly more lucrative thanks to the vacuum left behind by the previous reward system.

3. Social status is valuable

Companies, just like people, find their social status amongst their peers to be quite valuable. Press releases are published like clockwork, waxing lyrical about a company’s financial performance (no matter how incremental) as well as the intellectual prowess of the top leadership responsible for such average performance. Losing face, so to speak, is an uncomfortable prospect from a social value perspective and putting a company through a much-publicized change means owning up to the fact that something has not worked in the plan. The weight of years of carefully manicured public image is a sunk cost that is hard to ignore for most companies. By not owning up to the need to change, top leaders deflate any internal momentum set out by various change programs.

A crisis changes that. It dismantles the public image of a company very swiftly, taking away the burden of ‘saving face’ almost overnight. This holds especially true for the current COVID-19 crisis, where nearly every company is suffering and the shame of admitting that change is the need of the hour has gone away. Similar to seeing a news story about an unrecognizable, post-quarantine Kylie Jenner in sweats, companies have discovered social value and momentum in the knowledge that all of them are like Ms. Jenner in 2020.

The three drivers discussed are a strong lesson for entrepreneurs, leaders and boards everywhere. If you can actively manage organizational anxiety during times of change (instead of avoiding or suppressing it), reward longer term performance and not worry too much about the optics of your business, you can drive change before a crisis does it for you.

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The U.S. is home to 574 federally recognized tribes with approximately 6.9 million Native Americans and Alaska Native citizens. But despite their population size and their vast and thriving communities, Natives often suffer problems silently, invisibly, without the benefit of public outcry or media attention.

Their problems can no longer remain in the dark: American Indians and Alaska Natives are facing a crisis of their own going missing or being murdered.

Our government is finally beginning to tackle the issue. The next step is for all Americans to join in on the efforts to end this ongoing tragedy.

Native Americans are more likely to experience violence than white people. According to a National Institute of Justice (NIJ) fact sheet, more than four in five American Indian and Alaska Native adults “have experienced some form of violence in their lifetime.” This equates to victimization rates that, compared with white people, are 1.2 times higher for Native women and 1.3 times higher for Native men.

The NIJ points out that while victimization rates among Native men and women are similar, the type of violence they experience differs: “They have experienced similar levels of psychological aggression and physical violence by intimate partners,” reads its fact sheet. “But women have experienced significantly higher levels of sexual violence (56.1% versus 27.5% for men) and stalking (48.8% versus 18.6% for men).”

For those who are missing, we lack a national data set. While a handful of states are starting to examine the issue to understand the problem, it is going to take a unified effort to fully understand what we are dealing with. But even without data, I know from my experience and from speaking with tribal leaders and Native communities that this is a massive problem. 

I have heard of several incidents where families have had to conduct their own searches, often on foot or by horseback, for missing relatives because officials did not believe they were in danger. These families shared with me that their cries for help were not taken seriously, which has contributed to the lack of data on this issue. Some stories end with their family member being found deceased; others remain missing with no answers. Owing to years of dismissive and negligent responses, this has become a crisis that scars the hearts of our Native families and communities.

For years, I have heard stories like this and others that haunt me. It is dumbfounding that in this day and age, in the time of cell phones and social media, so many Native American communities still suffer invisibly and remain without answers or closure. But the crises that Native Americans face are not only theirs—they are our nation’s. Americans are suffering, and we have a moral obligation to ensure they get the justice that every American deserves.

Thankfully, under this administration, at the highest level, the crisis of missing and murdered Native Americans (MMNA) is being acknowledged. Last November, President Trump signed an executive order establishing the first ever MMNA federal task force. Named Operation Lady Justice, it was created to address MMNA through a multidisciplinary approach relying heavily on tribal input. 

This May and June, the task force hosted virtual tribal listening sessions and spoke firsthand with Native communities about this issue. The task force heard difficult personal accounts of mothers, daughters, or nieces who have been missing for decades with no resolution. The quagmire of jurisdictional barriers and the remoteness of many of the communities, compounded by the lack of attention and response from area media outlets and the surrounding community, has contributed to their challenges. Silence and isolation allows the most vulnerable to become victims of the most horrendous crimes.

We Native Americans must be the voice that shatters the silence and demands justice. As Native people, we have been resilient through centuries of challenges. We have survived, rebuilt, and restored our languages, and we stand strong in our traditions and connections to our culture. But while we Native people must step up, we need every American to join us to help end this tragic and unnecessary crisis.

Whether it’s sharing social media posts when a Native American has gone missing, learning about Native American communities nearby, or keeping up to date with the efforts of the Operation Lady Justice task force and sharing that information with friends, every American can raise awareness that shines light on the problems that Native Americans face, and help to begin solving them.

To the tribal leaders and families who have been impacted by this tragedy, I want to thank you for never giving up the fight for your loved ones; your voices have been heard.

To every American, know there is power in unity. It is time we come together and put an end to this crisis.

Jeannie Hovland is an enrolled member of the Flandreau Santee Sioux Tribe, commissioner for the Administration for Native Americans at the Department of Health and Human Services’ Administration for Children and Families, and a member of the Operation Lady Justice task force.

More opinion in Fortune:

  • A black partner’s perspective on why law firms are failing at diversity
  • I’m a black tech CEO. Diversity shouldn’t be our end goal; ending the current corporate culture should
  • Bristol Myers Squibb CEO: Why the COVID-19 pandemic has me optimistic about the future of medical research
  • How investors can support diversity with their dollars
  • Listen to Leadership Next, a Fortune podcast examining the evolving role of CEOs
  • WATCH: Baxter International CEO on reopening and leadership during social unrest

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A crisis can take different forms and emerge without warning. These crises include advertising disasters, miscommunication with suppliers, or a mishap during a company event. Most organizations prepare contingency plans for various crisis scenarios. However, regardless of the type of crisis that we are facing, it is important that the leaders of an organization use their emotional intelligence when faced with a challenge. It can greatly help them overcome the crisis they are facing. It helps us manage our panic and reactions, and it helps us understand others and help calm their panic.

What is emotional intelligence?

It’s our ability to manage our emotions, which enables us to handle crises more efficiently. Emotional intelligence has four elements — self-awareness, self-management, social awareness, and relationship management/social skills. 

Related: Successful Leadership Tactics in a Time of Crisis

Self-awareness

As a leader, you are under constant watch. People will monitor your every move. Because of this, you have a great opportunity to influence. If they see you calm, they will stay calm. So how do you ensure that you stay calm even in times of crisis? You need to be conscious of how you react to your situations and other people. When you are aware of your reactions or emotions, you are in charge of the situation, not your emotions. Find out how you react when you’re under pressure. Does your heart beat faster? Do you become irritable? When you know how you react, you can manage your emotions, which increases your ability to deal with the crisis because your emotions do not influence your decisions.

Self-management

People who are self-aware can easily identify their emotions when they take the time to do it. Even experts require a moment to gather their thoughts, but once they have, they can easily manage themselves.

So, what does it mean to self manage? When you know you’re about to react negatively to something, you can do something to intervene before things escalate. For instance, one of your employees made a mistake, which might cause your company to lose an important client. How do you feel? While you’re allowed to have those emotions, you need to learn to manage them so you can deal with the situation. 

If you manage your emotions, you can set your disappointment, anger, and panic aside and begin to deal with the problem first before dealing with the employee. In other words, your emotional intelligence can help you focus on the important things during the crisis. When the crisis is over, you can take the time to let those emotions out in private. 

Related: 8 Powerful Phrases Leaders Need to Say in a Time of Crisis

Social awareness

While the first two elements focus on internal matters, social awareness (and relationship management or social skills) focuses on your ability to connect with other people.

“Empathy is a core skill of social awareness,” writes author Daniel Goleman. Empathy is our ability to understand and share other people’s feelings. During a crisis, you’re not the only one who’s experiencing different emotions. As a leader, you can influence how others feel. If you let your emotions run wild, your people will probably do so as well. If you show them that you are afraid or angry, they might feel those emotions too.

Your people are probably just as afraid, if not more than you are. Your anger might make them feel antagonistic too. Instead, if you manage your emotions, you are in a better disposition to help them deal with their emotions. You can motivate them to continue working despite the crisis that you are facing. You can even encourage them to work towards solving the crisis.  Being socially aware allows you to lead others to manage their emotions and focus on the tasks at hand.

Relationship management or social skills 

“Relationship management refers to your ability to influence, coach, and mentor others, and resolve conflict effectively,” writes Lauren Landry of the Harvard Business School. Yes, you need to be a good communicator, which means learning to be a good listener. Being a good listener improves your ability to be socially aware. You need to use what you learned from your observations (due to your social awareness) to help you manage your relationships. For instance, a crisis creates tension, which means increased emotional responses. To prevent conflicts from arising, you need to address the issues before they become problematic, and having a good relationship with your people as well as with external parties allows you to resolve the issues easily. 

Related: What Leaders Can Learn From Governor Cuomo About How to Communicate During a Crisis

All of these mean that leaders need to develop their emotional intelligence while there is no crisis so that they are ready by the time a crisis occurs.

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