These Companies Will Not Survive the Pandemic
What does it take, besides the cash flow, to survive this time
Planeta Kino (Cinema Planet) used to be a rapidly growing chain of movie theaters in Ukraine. A rapidly growing chain of movie theaters. In the time of Netflix. In the time of empty movie theaters in the world. And now during the quarantine, not only it is closed but it is also left with a challenge of keeping or letting go of their employees.
In the beginning of the lockdown, they gave out free pop corn as it had been left unsold anyway. Two weeks ago one of their co-owners, Dmytro Derkach, wrote a sincere post on his own Facebook page, where he openly said they only could survive until the end of the month without any cash flow. So they came up with an idea to sell certificates that people can buy now and use later for the movies when the quarantine is over. Around 3000 of those were bought with clients encouraging their loved brand and wishing them a soon recovery. I myself have bought several and got a ‘Planet Savior’ badge in my e-mail.
Another company — a huge network of gyms — was very slow on freezing people’s cards for the quarantine, so the clients almost had to force them to do it and when they finally froze them, clients were more angry than relieved.
These two cases in my recent practice have got me thinking: why do we support some brands now and hate the others? And the more I research companies behaviors these days, the less I’m surprised.
They have always been like that.
Cinema Planet has always been great in serving their clients and even giving out free tickets when the movie happened to be shown with a 20min delay. The gym company has always been terrible with their clients, with things like stolen clients shoes and no responsibility accepted.
However, in crisis you don’t have time to think. You react based on your habits and values. And this is a great time to see those ‘shine’ in reality and not on a corporate web-site.
The time of courtesy with clients for companies with huge marketing budgets is gone and we see the naked truth — a real guy after marriage, so to say :)
I went deeper and found a research from Oak Ridge Institute for Science and Education which shows how people react in crisis. And as companies are composed of people, I have found some great analogies that can help you see yourself and your company in the mirror.
- VICARIOUS REHEARSAL
“Experience has shown that people farther away (by distance or relationship) from the threat may actually exercise less reasonable reactions than those who are facing the real crisis”
These ones are also called “armchair victims”.
A client of mine — medical equipment supplier- is now doing extremely good in terms of sales, profits and everything else. But yesterday on our zoom call they told me they are thinking about reducing employees bonuses. When I asked about the reason, they said: ‘Just in case. We don’t know what’s coming next’. GLOVO — one of the most successful delivery companies in Europe — is reducing their delivery guys’ bonuses, — I guess, just in case…
2. DENIAL
“An individual experiencing denial may not take recommended steps to ensure their safety until the absolute last moments, sometimes, perhaps, when it is too late”.
Have you come across those companies that are posting happy (too happy) pictures, music and their products as if nothing is actually going on? Or, maybe your boss behaves like that? Or your landlord? I felt something was terribly off when a luxury hotel has sent me a 10% discount for accommodation.
3. STIGMATIZATION
This one is pretty interesting. Here’s how the research describes it: “Stigma, the fear and isolation of a group perceived to be contaminated or risky to be associated with, will hamper community recovery and affect evacuation and relocation efforts.”
A good side of this would be grocery stores checking your temperature and giving out masks and gloves. A downside of this would be my friend who started coughing in the store because she was chocking and not only no one helped her but the security guy made sure she left the store asap.
4. FEAR AND AVOIDANCE
I have a CEO who has cut off salaries, then people in the beginning of all this and then the company started to get so many orders that he had to ask people to come back. He appears to be a textbook for the explanation in the research:
“With fear at the core, an individual may act in extreme, and sometimes irrational, ways to avoid the perceived or real threat.”
And the last one:
5. WITHDRAWAL, HOPELESSNESS and HELPLESSNESS
“ Some people can accept that the threat is real, but the threat looms so large that they feel that the situation is hopeless. They feel helpless to protect themselves and so, instead, they withdraw.”
I know that many CEOs have withdrawn now. I ask employees when was the last time they heard from their CEO and they can’t remember it. This is not the time of PR department, this is the time when employees, clients and partners have to hear from the First Person in the company.
I really hope you can check these out from your behaviors or communication. But if you can’t, that’s fine. Nobody on this Planet has ever been to the situation like that. Harvard Business School in their recent COVID-19 Crisis Management course are recommending to go back to your values, mission and vision and to remind these to yourself and to your people before making any decision and highly resist making fast decisions, whenever it is possible.
You can count only on the real values of your company and maybe a good therapist (no sarcasm).
Stay safe externally and internally.
