The post pandemic political picture

By Andrew Elsbury

The political landscape of Australia and the world will be shifted significantly by the COVID19 outbreak. Indeed, as State Governments close their borders, effectively reinstating the sovereignty of their jurisdictions, many Australian citizens are getting a taste of the pre-federation Australia.

While Western Australia closed its borders almost completely, and both South Australia and Queensland have police at their border crossings, the Federal Government continues to attempt a coordinated response to the pandemic.

Prime Minister Morrison has already stated he is fighting a war on two fronts, one against the virus and the second against the potential economic disaster that the shutdowns and unemployment present.

On the first front there are signs of hope and new cases, for the time being, seem to be plateauing. On the second there will be a much longer road to recovery. For while paying employers to keep employees on is a welcome measure it is certainly unsustainable for a long term.

On the Friday (3/4/2020) episode of A Current Affair, Economist Chris Richardson stated “Our Governments don’t owe much debt, whereas the rest of the world owes heaps”. This is as close as a tick of approval as you are going to get for Coalition Government post 2013 fiscal policy. It does not mean we are immune to the global financial catastrophe but we will weather it better than most nations.

The third front the Prime Minister diplomatically avoids talking about is the one he is fighting against the State Premiers. In particular Gladys Berejiklian and Daniel Andrews. Both have been problematic with their push for school shutdowns and a stated desire for complete population lockdowns.

You only need to listen to the Victorian and New South Wales government lines of ‘ensure you have 14 days of supplies in your homes’, while Canberra is saying don’t panic buy, to see an inconsistency in messaging.

For the time being, a détente has been reached between the states and federal government. However, with school holidays in Victoria ending next week, you can expect the debate around students returning to school campuses to become a flashpoint.

The comfort that Australian governments, of any persuasion, can have in a crisis is that voters are loathe to change the government of the day. Barring a complete failure, the population will generally seek the security of a continuation of government.

The Federal Parliament does not need to go to an election until 3 September 2022, however, I would suspect that an election will be held in 2021, allowing the Morrison Government to maintain the momentum of the COVID19 response. Victoria is not due to go to the polls until November 2022 and NSW is March 2023, and I would suspect both incumbents will retain power.

Even when concern around the virus is gone the lingering financial impact of the pandemic will be only the beginning of the disruption it will cause.

Many nations will take a Trump style approach to trade, seeking to maintain industrial capacity inside their country with a greater emphasis on self-reliance for critical supply chains.

Social media is already rife with anti-China rhetoric. This is not just an Australian phenomenon. We are already seeing various states blaming China, not just for the pandemic but accusing them of profiteering from the global impact.

This sort of talk can be dangerous. Those of a radical political agenda may seek to capitalise on high unemployment rates and increasing nationalism. Pride in one’s nation is not inherently a bad thing, but when that translates to hatred of another, that is where danger lurks.

There is no doubt that the world will emerge from this crisis significantly changed. The political impetus for greater globalisation will not only have been halted but, most likely, reversed. That, alone, will create new geo-political pressures.

National sovereignty, control of borders, greater self-reliance and residual government social and economic support will make traditional left and right ideological divides almost obsolete.

Governments that have managed to avoid total catastrophe (however one defines that) will likely accrue a significant incumbency benefit. How they continue to govern will also look quite different.

 

RMK+A has decades of experience working with clients to help them understand the political environment and its impact on their business. We provide analysis and briefings based on client’s market position, competitive setting, the political background and regulatory framework.

Keep Calm and Communicate

By John Kananghinis & Alexander Corne

If you’re not in your bunker expecting the worst and eying the corporate cyanide capsule, then you should be communicating clearly, calmly and with authority to the various stakeholders in your business.

Executives need to communicate in two directions at once, and largely with the same message; to their directors or owners above, and to their direct reports, below.

Ideally this downward communication should stretch further than just direct reports, all the way through the business. It needs to be personal, credible and straight-forward. Now is not the time for corporate-speak babble.

Every single person in the business is worried about how they will sustain life and lifestyle. Employees in constant fear for their jobs do not function optimally.

Then there are the external suppliers and customers to consider. They are equally confused and worried but need to be similarly calmed, consoled and corralled.

The key to successful communication in a crisis is firstly to avoid the panic of the talking-heads and media tarts. The crisis may be global but your response must be local.

The tools to deliver crisis communication are, today, easy to employ. The variety of online captive and public platforms make getting in contact, even face-to-face, very easy. However, it is the appropriateness of the platform for the message and clarity of the message itself that are the important elements.

From team member briefings to new services and operating procedures for customer care, to investor and partner information, all need to be communicated cognisant of the appropriate channel, tone and necessary detail for each audience.

The coronavirus emergency is likely to be with us for some time, during which rules and resulting business responses will change. To remain of value, communications will need to be current. Crisis communication is not a set-and-forget proposition, nor does one-size-fit-all circumstances. Continual assessment of the situation and updating of messages will be necessary.

Devising and delivering such ongoing communication can stretch the resources of even the most sophisticated corporate communications and/or marketing team.

This is where expert external support can make the difference between a perception of ineffective response or one of a business that is dealing with the situation in a manner that supports customers, team members and partners. A business well-placed to quickly return to growth in the eventual recovery will have a distinct commercial advantage.

RMK+A has advised and supported numerous organisations in times of difficulty and is equipped to offer a suite of communication advice and implementation support during this challenging period.

We have devised clear, cost effective, packages of support ranging from core customer and team communications through to detailed investor, regulatory and media relations. A discussion with us could help your business to navigate a smoother passage through these turbulent times.

Crisis? What Crisis?

For anyone old enough to remember the title of the 1975 Supertramp album – I’m sorry.

At the time of that album’s release the Boeing 737 had already been in service for seven years and well on its way to becoming the most successful passenger jet ever built.

Little wonder then that with almost 10,500 737s built, across the 13 variants, leading up to the 737 MAX, for which the company held over 5,000 orders, Boeing was very keen for the MAX to be the comprehensive answer to the competitive threat presented by the Airbus A320.

The sheer numbers are staggering. There are over 1,250 737s in the air at any one time and there are two either landing or departing every five seconds. Most of us have flown on 737s more times that we can remember, let alone can count. As late as September last year Boeing were planning to boost production from 55 to 63 737s per month.

So, a little bit at stake when things go wrong. And wrong they went. As we know from the tragic circumstances of the loss of Lion Air Flight 610 and Ethiopian Airlines Flight 302, within five months of each other.

Boeing is in the grip of a proper crisis. All 737 Max have been grounded, orders are being cancelled and the airline is scrambling to explain how automated control systems designed to compensate for the aerodynamic changes created by larger extended range and efficiency engines, could end-up pushing the aircraft into the ground.

The first rule of crisis management is – always tell the truth. Tell it as well as you can, but don’t obfuscate, don’t delay and, most of all, don’t lie.

We won’t know for some time (doubtless after many protracted court cases) if Boeing lied. But they did initially try to blame the Lion Air pilots and resist a grounding of the almost 400 737 MAXs in service.

It is hard to imagine the pressure on corporations when such a critical part of their business is under threat. However, we are talking about people’s lives so, if a crisis is mishandled it can be fatal. Not only for the innocent travellers but also for the corporation.

Boeing is ‘too big to fail’ but those who run it, today, are not. This saga has only just begun.

In any circumstance, the reputation of the company and the careers of those in charge may have been past saving, even if they had fully disclosed what they probably knew after the Lion Air loss. To have waited for second, almost identical, incident and, even then, to try to run from immediate responsibility is not only reprehensible, it may even be criminal

There will be blood. It will come from Boeing’s Seattle HQ.

When it does go wrong, everyone will know about it – immediately

The good news is that all 103 passengers and crew survived the crash of an Aeromexico flight that came down shortly after take-off from Gaudalupe.

That really should be all there is to say, were it not for the fact that passengers who escaped the aircraft took pictures of the crash and posted them online, even before the emergency services arrived.

That is how fast news travels today, via social media. Anyone with a mobile phone can be an on-the-spot reporter. For businesses considering their crisis management plans that knowledge should be an immediate jolt to review such plans and be prepared for immediate response. Even if only to prepare holding statements, to be used until facts can be ascertained.

How many businesses with, any sort of public profile, can say they are prepared for such immediate response? Waiting to have all the facts at hand is becoming a luxury that can make a public facing business look slow and disengaged.

Immediate review of public response protocols and standby statements should be, if not already done, an urgent priority.

It may be impossible to predict every eventuality but it is possible to be ready for the unexpected.

RMK+A has long experience in managing media and public response to significant situations and in providing businesses with the tools to react, in a reputation sensitive manner.