Crisis call: Singapore business leaders on managing in the pandemic

LIKE many others on Monday, business leader Pang Fu Wei rejoiced at the news of the earlier-than-expected opening of shops in Singapore after almost three months of closure. It was a stark contrast to the chain of events in the last few months. It was during the festive Chinese New Year period when the potential severity of Covid-19 set in, Mr Pang, who is the managing director of Mothercare Singapore, told The Business Times. Earlier in the month of January, he - and likely the rest of Singapore - had not quite grasped the gravity of the situation. At that point, the virus seemed mostly contained within China and appeared like a "more serious version of the flu", he adds.

"With its deceptively low mortality rate, I remember being rather complacent as I thought that we would get out of this pretty soon," he muses. "We now know that's the furthest from the truth."

Fast forward to today, the small and medium-sized enterprise (SME) segment has experienced a whirlwind of changes. First, business was hard hit by the circuit-breaker measures that forced its retail shops to close, with Mothercare's revenue diving 60 per cent - "reality turned out worse than my worst-case scenario" - even as it ramped up its online business. In late May, it was forced to cut wages for some of its staff, with the promise that the amount would be returned in bonuses if the situation improves.

Then came the welcome - but unexpected - news that retail shops would be able to open on June 19, resulting in a rush to get everything ready by then.

Even though the store opening comes as a relief, he points out: "Businesses need to plan, forecast and budget. If there's a level of uncertainty, we don't know our revenue and our inventory becomes murky... uncertainty is really the worst for businesses."

Leading by example

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Mr Pang is just one of the many business leaders rolling with the punches in these unprecedented times. In the midst of all the fire-fighting that leaders need to do, analysts say a critical component in managing the crisis is communication.

"People look to their leaders to help them to make sense out of the situation that they are in, to create clarity, certainty, and guidance for what they need to do, and in turn help them to cope with the situation emotionally," says Gareth McIlroy, managing director for consulting firm Korn Ferry Singapore.

"Unfortunately, some leaders neglect this because they overlook the emotional rollercoaster that their team may be going through, and seek to find the perfect solution - when it doesn't necessarily exist - before they communicate with their teams."

To him, crisis communication is not a series of action steps, but an ongoing process.

It is important for leaders to communicate with more regularity, with repetitions of the key message that is kept simple to create certainty for the team, he says. It should also be direct and candid. "There can sometimes be a tendency for leaders to shy away from giving bad news, so they put a positive spin on everything," he says. "Leaders should trust that the team can handle the facts of the situation."

If leaders want to speculate, they have to make sure the team knows the distinction, he adds.

Part of this communication entails a leader's willingness to be vulnerable. "It's okay to not know how things are going to evolve, but be honest about that rather than pretending you have all the answers," says Mr McIlroy.

He also does not believe that there are significant cultural differences when it comes to what works from a leadership perspective during times of crisis.

"I certainly don't subscribe to the school of thought that says people in the 'West' can take a more direct form of communication," he notes. "Singapore was built by some very direct leaders, whose willingness to be honest about the situation instilled trust across the nation."

Arne Gast, partner and leader of McKinsey & Company's Organization Practice in Asia, says the key element in crisis communication is to help workers distil meaning from chaos.

The crisis will eventually end, and leaders need to help people understand what happened and establish a clear vision of how the organisation and its people will emerge from it.

"(This) cannot be emphasised enough," he says. "It drives the distinction between organisations that come out of crises relatively unscathed and organisations that come out stronger."

Managing the message

One major consequence of the pandemic and its containment measures is the impact on jobs. Some economists have estimated that job losses in Singapore could go beyond 100,000 this year, with unemployment rates likely going higher than past crises.

Many businesses have had to resort to pay cuts and retrenchments as they struggle to keep their heads above water. The question is: how do leaders deliver bad news in the midst of such tough times?

Corporate communications veteran Charlotte Sam says that the key is to be sensitive and authentic. "As a leader, you are in an equally vulnerable position, yet the rank-and-file doesn't always understand this," she says. "Understandably, they think their leaders are predators."

Another is for the company to be clear about its strategy. While navigating a crisis can be difficult as the way forward is often unclear, frequent changes in direction can lead to distrust and disillusionment.

"More often than not, leaders rush to put out the announcement internally and externally, and the follow-ups internally are handled so poorly, as if they are buying time to figure out the next steps," she observes.

Otherwise, they may dole out steps in dribs and drabs, with incremental updates overwriting previously communicated directions which leaves a lot of room for second-guessing - "a sure recipe for a crisis in the making", she adds.

"A customer once told me that a company that can't respect its staff is more likely to renege on its business commitments to customers," Ms Sam points out.

Even if staff have to be let go as a result of Covid-19, extending goodwill is the least the company can do. Goodwill gestures do not have to be added costs to the severance package, she says.

According to her, Airbnb CEO Brian Chesky nailed it with his open letter that "wastes no words and delivers a clear message with a mandate to deliver the best possible brand experience". It is also empathetic and heartfelt at the same time.

This will determine whether the affected workers will remain the brand's best advocates, or if they will vent their frustrations to the media and the rest of the industry.

In the face of the crisis, business leaders are stepping up even though for some like Mr Pang, this is the first major one they have encountered.

He recalls that even as the company acted early over Chinese New Year to import large quantities of health-related products such as thermometers, he knew it was short-lived and had to prepare staff for the dip.

It was in late March that he penned a message to the management teams across the region to share his perspective on the crisis, mitigation plans, and new opportunities that the firm needs to latch onto.

He also e-mailed each team on its business continuity plans, the organisation's priorities, and provided them with visibility on the cost-cutting measures planned, so as to clear any doubts.

But by May, more decisive measures had to be taken for the survivability of the company, he notes. "While we have not had any layoffs, after three months of having to shut all our physical stores, I've had to make the painful decision of cutting salaries," he says.

This was announced at Mothercare's virtual town hall, so that he could tell everyone directly, and address any questions or concerns.

Mr Pang says that the guiding principles behind the pay cuts were also announced to ensure transparency: number one, the company is in this together - if everyone bites the bullet, the business can continue to operate without reduction of headcount.

Secondly, it was about leading by example. Mr Pang took the largest pay cut of 40 per cent. The rest of management took a voluntary pay cut as well, and those in the middle band had a 10 per cent pay cut from their monthly variable wage components. Staff earning below S$2,200 had no cuts to their salaries as the company wanted to protect their most vulnerable staff.

Finally, he also told staff that cuts will be given back as bonus if business improves.

"It is the staff who have to worry about bread- and-butter issues that affect me the most," he says. To better care for them, its holding company has set up a S$50,000 "tough times fund" to look after anyone who may be struggling during this period.

While he had to be the bearer of bad news, he told BT that responses that came in were very encouraging as staff understood his position and what they had to do to pull through.

A post-townhall poll found that almost 99 per cent of the 75 responses received from staff indicated that they had benefited from the session.

Another business leader steering his ship through these tough times is Andrew Kwan, group managing director of Commonwealth Capital, known for its investments across the food value chain and a food and beverage portfolio that includes Soup Spoon and Pastamania.

As an entrepreneur of three decades, this is not his first crisis. "While Covid-19 is certainly not my first rodeo, it might yet be the most formidable ride," he says.

Since the circuit breaker commenced in April, the business has experienced a "more pronounced impact" on revenues. The group is trying to manage with no-pay leave and some adjustments in salaries commencing in May, with no staff let go yet from Covid-19. It had also ringfenced those earning below S$2,600 from any pay cuts. Since the crisis deepened, he has been increasing his engagements with staff.

"I have separate group chats with different circles of leaders in the Commonwealth group," he says. "I communicate a lot through WhatsApp."

Aside from his weekly updates with his direct reports, he has also scheduled townhall meetings since February to engage the wider group. The first was held after Budget 2020.

"I had the opportunity to speak to, then take questions from, all my staff," he says. "We spoke about the potential impact to our country and finally, to our company. The intention was to download what I had read, heard and observed to my team, in full candour."

"I remember telling all that should we come to a point where we had to cut manpower costs, my inclinations would be for all to tighten belts together rather than for some to leave the boat, so to speak."

He also sought his employees' feedback on the matter. "They were clear that the preference was for solidarity, for collective belt tightening, if required," says Mr Kwan.

Beyond his in-person engagements, his direct reports had their own sessions. "It is important that the message is repeatedly cascaded down consistently, candidly and compassionately by the collective leadership," he adds.

Lifting spirits

Even during a crisis, businesses still need to perform - in fact, the stakes are higher than ever. But keeping up employees' morale can be a tall order when so much remains uncertain.

For Joshua Koh, chief executive officer of furniture retailer Commune, addressing workers' biggest fears of job security and a salary reduction was a priority.

"We assured them that as long as we were cash-flow positive, we would not be making any drastic changes with regards to headcount and salaries," he says. "This, I believe, gave them the confidence to continue to work hard and continue to push for more business in order to ensure that we remained cash-flow positive."

The business has not had to lay off workers or had any salary reductions even though its retail business in Singapore has seen a drop in sales as a result of Covid-19.

He also says that regular check-ins and celebrating successes - "even though they might have been much smaller successes than before the crisis" - also helped lift spirits.

"I also encouraged my staff to take time to be with their family and to keep healthy during this period," he adds.

This is in line with what Sam Neo, CEO of HR consultancy People Mentality, advocates - constant engagement with staff, or what he calls being "separated but connected".

Even when physically apart, employees need to feel that they are part of a bigger whole. "Frequent and short virtual check-ins become a lot more important than before," he says. "This is not limited to just work-related calls - checking in on their family and well-being is highly essential."

Another aspect is to ensure that the company provides the necessary support in such times. "Leaders should not expect employees to naturally perform in such a situation," he says. "Understanding what's needed and how they can enable their employees is extremely important."

Leaders who are only focusing on workers' productivity without providing the necessary support need to consider their priorities, say analysts.

Ms Sam points out that Covid-19 has pushed many firms to adopt work-from-home arrangements as they have no choice. This comes even as the managerial mentality of face-time remains rampant. "Many managers I spoke with were actually more concerned with productivity, but I think the underlying concern is trust," she says.

Some managers even resort to three-hourly Zoom check-ins on progress updates, she says.

For communication to be effective, she suggests sticking to the "Kiss" philosophy, or keeping it short and sweet.

This helps to avoid Zoom and e-mail fatigue. "I also seriously think companies should review their presentation decks to cut down text and improve readability," she says.

Another is to remember the less digitally savvy in these times. "Most of us reading this are likely slaves to the gadgets we have, yet there remain many who struggle with apps that hang, spotty Internet connections and even with video call apps," Ms Sam says. Efficiency is one thing, but it's being patient with one another and making the best of an imperfect situation that will help bring out the best in people, she adds.

Live to fight another day

Even as leaders take care of their business and staff, they also need to take care of themselves, be it during crisis periods and even boom times when there is relentless manic activity.

Korn Ferry's Mr McIlroy notes that leaders should not underestimate the personal pressure that falls on them.

Having ways to relieve the stress, either through exercise or some other form of downtime, becomes very important, he says.

It is also critical in times of crisis to take pause and objectively review what is working or not, he adds. "Often by having an external sounding board through a mentor or spouse, the leader can use these conversations to stay on purpose," he says. "Being able to talk things through, irrespective of any advice given by the listener, is a great way to stay grounded and calm no matter how much disruption is going on around."

Commune's Mr Koh says that he has been spending time with his wife and two young boys through family activities like playing board games and going for runs to keep healthy.

As for Commonwealth Capital's Mr Kwan, the past few months has "been manageable only because of faith and family".

He shares that he has indulged himself by getting a classic coffee machine for a satisfying brew. "Nothing quite like blowing steam literally," he quips.

Come what may, he says that leaders have to lead from the front, with humility and courage.

"I like to say, a steady head, strong hands and a stout heart," says Mr Kwan.

He likens entrepreneurs to ballerinas, with "the ability to pivot and pirouette without falling over". With the Covid-19 pandemic still ongoing, business leaders will have to rise up to the occasion and continue the battle with agility.

Meanwhile, Mothercare's Mr Pang shares that having a routine is important to him. Exercising daily helps him to destress and he goes to bed by midnight.

The past quarter has been an "emotional rollercoaster" for him, but he has learnt to become more settled. And with all systems go on Friday, he is raring to surge ahead once more.

He looks upon the past few months as not just a period of pain to be endured, but also a refining of character. "A crisis is not only a test of your leadership but also a test of your values," says Mr Pang. "If you take care of your people, they will take care of the business."