Throughout Europe, we are gradually seeing the world return to a semblance of normality. Step by step, people are returning to work, visiting restaurants and cafés for takeaway and shopping in non-essential retailers which are opening their doors for the first time in months.
For senior leaders in the consumer-facing sector, this next phase of the pandemic brings with it a new raft of significant considerations. Most notably: how can organisations trade effectively while maintaining the vital social distancing measures required to keep Covid-19 at bay?
As part of the decision-making process, leaders can look overseas to their peers in other markets who have been coping with different phases, or iterations, of the crisis. Indeed, one positive development to emerge from Covid-19 has been the resurgence of a global peer network and a renewed focus on knowledge sharing between global markets. With this in mind, we are turning our attention to Sweden in this column, to see what lessons leaders can glean from a region where total lockdown was never enforced. In Sweden, people have been asked to voluntarily practice social distancing and work from home if possible – but bars, restaurants and shops are still open.
As part of our research, we caught up with senior executives from across the Scandinavian consumer sector, covering the automotive, hospitality and consumer goods industries, to hear their insights and experiences of Covid-19.
The central issue for senior executives today is understanding how, in practical terms, to roll out business operations in our ‘new normal’. Clearly, answering this question is more complicated in some companies than others. As a strategy leader at a Scandinavian automotive business articulated: “in our factories, it’s not as simple as moving some desks around.”
Perhaps the biggest challenge is in the restaurant and pub sector, where guest experience is often defined by a relaxed atmosphere and the ability to sit shoulder-to-shoulder with other visitors. For many businesses, it was definitely the right thing to do to keep trading during the crisis in Sweden. One Chairman of a restaurant and bar chain talked me through the considerations his business made: “We want to be a brand with a vision of the future. What kind of message do we send if we had closed our stores? For our customers, our suppliers, our employees – there’s more uncertainty if we weren’t open. Our franchise partners needed to see us trading, and trading safely.”
A number of measures have been rolled out in Sweden to keep restaurants running while also taking the necessary precautions to protect customer and employee health. Very practically, actions have been taken to limit the number of people in any restaurant at one time. A hospitality business we spoke with described how they have halved the number of the tables in the restaurants available to book, in order to maintain a two-metre distance between groups. Moreover, looking to reduce interaction between staff and customers, they have launched an app via which customers can browse the menu, book their food and pay their bill. They’ve also shut down their self-service counters and implemented strict hygiene policies in the kitchens.
For regions yet to experience them, it may seem like these sorts of practices aren’t feasible, or else undermine the sector’s emphasis on enjoyment and customer service. But while limiting human interaction in restaurants certainly feels unnatural, it has not stopped customers visiting – albeit at 30% – 60% below trading at the start of Coronavirus. That being said, many smaller sites – in outlying regions – may well now be unprofitable, so the viability of parts of the trading estate may well be called into question.
Indeed, for restaurants and bars across Europe, deciding at which point to reopen is a key consideration. We spoke to an NED from one of Denmark’s leading pizza restaurants, who advised senior executives to think carefully about reopening too soon. “Use the opportunity of zero sales to fully understand your cost base,” he suggested. “Work backwards until you get to breakeven and you’ll be left with a true picture of your costs. In my opinion, the real challenge will be in six months’ time, when businesses may realise they’ve been trading unprofitably on low sales and can no longer sustain it.”
Alongside customer-facing operations, many European executives are grappling with decisions about when to reopen offices and allow teams to reconvene in person. I spoke to Jonas Pettersson, Founder and CEO of the drinks business Vitamin Well, who advised against rolling out company-wide returning policies at pace.
“You have to take things slowly,” he told me, “you don’t want your staff to feel that you are pushing them, or taking shortcuts. Look at the long-term. Culturally we’ll be defined by this time, so now is the time to listen to your people and not too push them too quickly. Being understanding of your people will be a great investment.”
Indeed, at this crucial juncture, it is imperative that business leaders invest in and engage with their employees in order to restart operations in a way that is both business-efficient and people-focused.
As an example of this, the Chair of the restaurant business told us that: “each restaurateur has been able to set their own schedule for opening hours depending on what they think is efficient and relevant, so our opening hours differ depending on the location and customer demographic.”
Indeed, Swedish businesses across the board have been using this era-defining crisis to foster an environment of cross-company collaboration and champion their employees. The automotive leader shared a piece of advice with us: “Try to gather all the initiatives and innovations that your employees have and integrate them into your reopening policies. Our employees were incredibly engaged during the crisis, and heavily involved in our efforts around producing PPE for front-line workers, helping the armed forces with transport and making donations to organisations tackling the crisis. If you listen to your employees and lift their ideas, then you can take your workforce’s enthusiasm and entrepreneurial spirit on with you beyond the crisis.”
Sweden is a relatively unique example of how a country has handled the pandemic, and it is still unknown how successful the government’s no-lockdown strategy will be. Nevertheless, as businesses across Europe prepare to reopen, and leaders make critical decisions impacting the future of their company and the wellbeing of their people and customers, there’s a lot that can be learnt from Swedish organisations. The message from Stockholm is loud and clear: listen, react and lead.