‘Executive distancing’ the new tool in corporate war rooms

Simon Evans, Jenny Wiggins, Sue Mitchell, Angela Macdonald-Smith and James Frost

Mar 18, 2020

AFR

Executive distancing is one of the tools being increasingly used by corporate Australia as it battles the unprecedented destruction of wealth from the insidious coronavirus pandemic.

Qantas, forced to cut 90 per cent of its international capacity and 60 per cent of its domestic capacity until the end of May as it grounds 150 aircraft, is at the extreme end of the corporate equivalent of a war.

A group of about 25 people from all parts of the Qantas business sit daily in a room at the group’s headquarters in Mascot, Sydney, to plot the next move.

But they keep at least 1.5 metres apart, with one person sitting at a large table and the next sitting back against the wall. The pattern is repeated around the room. One at the table, the next against the wall. Social distancing in a boardroom.

Qantas has an in-house team of about a dozen medical staff, including doctors, to brief pilots, flight attendants and ground crew around the world via webinars every day to try and keep the lines of communication open as the airline’s 30,000 staff face an uncertain future.

Supermarket retailer Woolworths, under enormous pressure as shelves in many of its 995 supermarkets around Australia are being stripped of staple grocery items by panic buying, has moved to home-based working for large parts of its behind-the-scenes workforce.

It told suppliers on Wednesday that many staff in its buying team were now working remotely and requested that meetings be conducted via technology rather than face-to-face, ideally through Google Hangouts.

Electricity and gas company Origin Energy, with 5500 employees, has upended its traditional work patterns.

Origin chief executive Frank Calabria described the situation as “unprecedented” as the company reshapes its ways of working to protect health and safety, and slow the spread of the virus in the broader community.

“The majority of our workforce is now working remotely, including the executive team, with a smaller number of roles required at site to maintain reliable supply of power, natural gas and LPG to our customers across the country,” Mr Calabria said.

Carbon Revolution, which manufactures lightweight carbon-fibre wheels from a factory at Waurn Ponds in outer Geelong for global customers, including Ferrari and Ford, is a microcosm of the dilemma facing corporate Australia.

The company, a sharemarket darling after listing in November 2019, is a shining example of a high-tech manufacturer capable of becoming a global player. It rocketed to a sharemarket capitalisation of $600 million-plus by January 24 when its stock price was at $4.47. Its IPO issue price was $2.60.

Ferrari shutdown

But as the Ferrari factory in Modena in northern Italy shut down for two weeks until March 27 in an emergency measure to try to stop the spread of the coronavirus, and global economies froze, Carbon Revolution took some emergency steps of its own. It has raised $25 million in fresh capital to give it an extra buffer, but had to accept a lower-than-expected price of $1.50 to get the capital raising away. It began trading again on the ASX on Wednesday, with the shares plunging 47 per cent to $1.31.

Carbon Revolution has been nimble on the operational front. It has three separate shifts across the 400 people working in its production facility.

Chief executive Jake Dingle said new protocols had been established so there was no cross-over. “There is very clear separation between shifts,” he said. Extra cleaning had been ordered.

The executive team and senior leaders have also been quick to accelerate the use of technology to reduce the need to meet face to face. They use video messaging platform Zoom to communicate, and have stepped up the frequency of urgent meetings.

“It’s an increasingly agile workforce,” Mr Dingle said.

Sydney Airport, facing a big drop in revenues as international flights are cut, has had about 60 per cent of its staff working from home since Tuesday. Operational teams have been split so they are based out of different buildings and doing handovers electronically, rather than face-to-face.

Individual teams are using Skype for teleconference check-ins once or twice a day, and use platforms like WhatsApp and Yammer.

The airport has removed the provision from its flexible work policy that said if people were working from home they couldn’t also be looking after children, recognising many people are able to do both. It has also announced to staff that they can access unlimited sick leave, carer’s leave and personal leave if they are directly affected by the coronavirus, need to self-isolate, or care for someone who is.

“Airports are unique businesses and a lot of roles can’t be done from home,” said Sydney Airport chief executive Geoff Culbert. “That’s why we made the commitment that no one would be out of pocket as a result of this. If you get sick, you get unlimited sick leave. If you need to care for someone who self-isolates, you get unlimited personal leave.”

Working from home? You’ll need more space

Consumer electronics retailers such as Officeworks, JB Hi-Fi, The Good Guys and Harvey Norman are struggling to keep up with the sudden jump in demand from people working from home.

The 167-store Officeworks chain, owned by Wesfarmers, is both a model for and a beneficiary of the sudden shift.

Large numbers of its head office workforce in the south-east Melbourne suburb of East Bentleigh are working from home, and are even busier than normal as demand for technology and home office products soars.

Officeworks acting managing director Michael Howard said the increase had been substantial across the group’s network of 167 stores.

“We have seen a spike in technology and home office products such as monitors, home printers, computer accessories, cable and sit-stand desks – products that all help our customers work remotely,” Mr Howard said.

Those home-based workers are also sticklers for lifting their hygiene.

“Customers are also responding to an increased focus on hygiene and cleanliness, with strong demand across cleaning and sanitising products,” he said.

The retail sector faces a difficult task. The white-collar staff behind the scenes are able to work from home in most instances, but the front-line workers serving customers are having face-to-face contact by necessity.

The Reject Shop is proving popular as consumers look to stock up on cleaning products and other staples. 

The Reject Shop, an unlikely winner from a big pull-forward in demand for staple items like cleaning products, runs 356 stores around Australia.

Chief executive Andre Reich said on Wednesday that his executive team and state managers were having short meetings, usually via phone hook-ups, three or four times a day.

“It’s driven a greater unification of the business,” Mr Reich said.

He likened it to a wartime situation. The usual bureaucracy was being cut through and urgent decisions were being made quickly. “We are talking three or four times daily,” Mr Reich said.

The decisions were then speedily being communicated to store managers, or directly to the group’s staff. “We’ve got a really flat structure,” he said.

Front-line staff were being very conscious of personal hygiene and customers were generally being respectful .”People have been pretty good so far,” Mr Reich said.

The big banks continued to improvise on Wednesday in response to the rolling coronavirus crisis, with more and more bank employees working from home and ANZ CEO Shayne Elliott asking customers to give support staff a break as they worked out the kinks.

Mr Elliott said banks stood ready to do the right thing by customers with payment holidays and even cash grants in some circumstances, but asked they show its bankers the same respect as they grappled with the limits of their own systems.

“I will ask that people are tolerant with their banks because we will experience an increase in volume and we’ve got to scale up our own operations to do that,” Mr Elliott told 3AW.

“As you probably know we’ve got to prepare our own people by having a lot more people working from home so we ask people to bear with us.”

Scientific modelling shows how quickly a virus can spread, and the effectiveness of various measures to slow it down.

Small to medium business banking specialist NAB accelerated plans to shift half of its workforce home after evacuating its headquarters in Melbourne’s Docklands on Tuesday following confirmation of a confirmed coronavirus case, with the bank now approaching a 50-50 split.

“Last Friday, 6000 NAB colleagues worked from home and our systems allow for significantly more colleagues to do so,” a NAB spokesman said.

The bank wants to rotate employees through a two-weeks on, two-weeks off rotation, and hopes to allow staff back into headquarters following an industrial clean of the building.

Bank of Queensland, which revealed a director had tested positive to the virus on Monday, said it had no further cases to report and was following federal government directives with regard to contact tracing and self-isolation.

A spokeswoman for BOQ said head office staff are working in split shifts, however branches remained open and were being run in line with federal government guidelines with employees asked to practice social distancing.

Perth Airport meets twice daily

Aviation and tourism is being hit the hardest by the coronavirus pandemic. Perth Airport chief executive Kevin Brown said the airport had two separate groups, each meeting twice a day, to handle the crisis.

One group of key executives, emergency and operational staff, chaired by the airport’s chief operating officer, meets first in the morning to discuss ‘nuts and bolts’ issues. It reports to a second group – a crisis management team, chaired by Mr Brown – which discusses the longer-term implications of the crisis.

“Perth Airport remains fully operational but we are working through a number of scenarios in response to the significant financial challenge we face,” Mr Brown said, adding these included a significant rise in cleaning costs.

Some airport staff are already working from home and the airport expects all non-essential staff to eventually be working from home. It is holding a meeting of management and team leaders using WebEx, a video conferencing system, later this week to get people used to the technology amid expectations it will need to use it more in the future.

A man in personal protective equipment outside the international departures terminal at Melbourne Airport last week. AAP

Melbourne Airport, which employs 370 people, expects to have several dozen people working from home by the end of the week, but said that staff with operational jobs need to remain on site. The airport has a COVID-19 crisis team that meets every second day and communicates around the clock via a chat application.

The hospitality and restaurant industry faces a difficult time. But some firms are also on the front foot.

Fast food chain KFC will ban dining in its restaurants and push customers into its drive-through service, pick-ups and deliveries to try to help slow the spread of the coronavirus. It is also working on a trial of delivering food to customers in carparks as part of a social distancing strategy.