Valuable lessons for businesses to be learned in extraordinary times.

We are living in turbulent times. Here in Lithuania, in Baltic states or Poland, we have faced 3 big waves of shock in last 2 years: Covid-19, illegal migration (as a tool of hybrid warfare from Belarus) and war started by Russia in Ukraine. All those waves leave big impact on society, on state and on every person.

This article aims to summarize some impacts and lessons for businesses from the point of view of Key Account Management (KAM).

One of major elements in KAM – long term sustainable relationship built on trust and mutual values.

The backbone of Values

Human values first and only then business values. The companies which live values in correct sequence managed to go through turbulences and became stronger. They have improved bonds inside company, have gained employee loyalty, have built stronger connection with customers and consumers. It has strengthened their businesses and made more sustainable for upcoming shock waves.

Things should be called as they are: pandemics-risk to life and health, war-risk to life, health, economy, society, world and etc. The first priority for company management - to take care of employees’ health and safety, second – support the society and the state. And it seems this is the right way to do it, after all – it’s people who create, build and destroy businesses.

Ignoring reality or staying neutral is not the option. Those choices depict your values too.

Some of the companies has fallen in the conflict of values. The latest sound example - NESTLE. When majority of international businesses stop operations in Russia in order not to support aggressor in the war, NESTLE choose to stay in market. Most probably they have good arguments for that. However, with this decision NESTLE is losing the trust of partners and consumers. There is a huge negative impact on the brands and on the company itself which will last for years. Millions invested in brand building around the globe (positioning: family, kindness and alike) are simply thrown out. Maybe it is too early for summary. The time will show if this call of NESTLE top management was beneficial and if it was right. But one thing we can say for sure: there are some tough decisions to be made, where the only criteria make the difference – human life.

Take away: clearly identify the company values, live them, share them with your employees, partners customers. Values will unite the community or, if they are not shared, they can push you out from community.

Consumer voting & loyalty

Consumer/customer centric business approach has been proved. Consumers are so well trained and equipped to buy, that they are able to convey their views on political or social matters through purchasing or non-purchasing. For marketers this should be a new object of research. For business strategists that’s a call to build a long-term relationship with customers and consumers based on mutual understanding and trust.

In early days of pandemic many countries applied quarantine model. ?That was a time when food delivery to the door has boosted and many white sheet restaurants, night bars, clubs were closed. However, there were places which managed to find a way to operate with no rule braking. On top they’ve got a huge support from loyal consumers. It worked, because before quarantine they have managed to build the relationship where both parties were ready to contribute. They were ready to give up on demands and standards in order to stay together. That’s why plastic or wooden fork was very much ok for fancy meal served in aluminum take away dish. And that’s why, on the first opening day after pandemic there were served dinners “for our friends”. Same with customers and suppliers, because they all are a part of one value chain glued with trust and respect to each other.

Take away: the loyalty was and is very strong argument to adopt to the changes and find the way to operate in the new reality TOGEATHER.

Reputation as a mirror

The recent crises have shown one truth: the state institutions are very inertic and need time to start operating properly. NGO’s with private business are the first ones who can answer the challenge and who can later support the state.

Some do it because they believe it is the right thing to do. Some do it as an investment in future relationship with the state. Some do it in sake to promote themselves. Most probably there are many more intentions and reasoning why businesses are active in this kind of the situation.

Bear in mind whatever you act or do not act, it is observed. The bigger and more visible is the business the bigger effect on reputation of acting or nonacting. The freedom of speech and the spread-out empowered by social networks comes as a multiplicator of the impact. The action might be judged on legal basis, but much bigger impact comes from stake holders’ judgement based on perceptions and expectations. You can easily find yourself in the situation where it was done everything according to the law, but reputation is hurt badly. In face of crisis, community expects business to act right and only then lawfully.

Reputation can be hit simply because of changing action scene and changing views of stakeholders. Non ability of businesses to observe it and to adopt to the changes is a weakness.

Take away: the choice of act should be very well thought through and very quick. This is possible if you are prepared and have clear criteria for decisions. It is not possible to plan everything, but it is possible to identify and pre-discuss at least some major WHAT IF’s. The values and the wisdom of company management plays a big role.

Corporate Social Responsibility (CSR) masks fell down

It is great to act in trends. It is great to have fancy CSR page with sound statements. It is great to have bold lines in yearly reports. All good when such promises demand low effort and support your business image. But in face of troubles this kind of promises demand a lot. Not every company can cope with that, not to say that many companies are acting selectively in respect of CSR commitments.

Why? Because there is another set of responsibilities towards beneficiaries who are not ready to suffer loses. This is another situation where C level is faced with dilemma: responsibilities to owners vs. responsibilities to society and humanity.

It is strange when businesses which were seed and grown in a safe western community are ready to pay taxes to the countries which use this money to destroy their community. Does it say that personal interests of business owners are so narrow? Society will answer.

Take away: latest events and corporate response to them give a good basis to judge which businesses can be trusted and which should be seen as not trustworthy. If the promise to society is made and the responsibility is taken, stick to it.

The turbulent times very well expose who is who. Disclosure of “true faces” impact on trust and consequently on relationship. Feeling of trust closely linked to the set of values and outcoming expectations towards partners. Failing to meet the expectations or mismatch with values lead to mistrust. However, the loyalty is hard currency, which is worth to invest. If it is promised, taken responsibility, actions must support it. Mismatch between statements and deeds build bad reputation. ?

Being true and honest is the best recipe for long term sustainable relationship.

If something is missed, please feel free to comment.