It is taking an extra measure of concentration this week to get anything done. We are all in a collective state of fight or flight, and no matter how good we are at stoicism – we have to work hard to overcome our reptilian brain. I’ve come to know that Both True readers are unique. You’re willing to look at things differently and face some hard truths. Today, we look together at the hard truths facing us, without forgetting about the future.
Leaders are made in crises, and fortunes are won and lost in them. To navigate our current treacherous waters successfully, as individuals and organizations, we need to keep one eye on the present and one eye on the future.
I wrote a personal essay last week on What I wish I did during the last pandemic. Today I translate that to our working world, to prepare for the brighter days we definitely know are ahead.
Both of these things are true:
- Today’s challenges take all of our energy, wit, and capacity.
- Preparing for the brighter days ahead, we must invest now in the efforts that will reap rewards in the coming months.
At Adamantine, we are taking stock of our clients’ current needs and looking for their future opportunities. Social risk as we have been discussing it – the political, policy, and community opposition to oil and gas development – is going to take a back seat. Here’s how we at Adamantine are thinking about it.
- Climate concern will be eclipsed — but not forever. The overwhelming driver of social risk will take a back seat for the next 4 to 9 months, depending on the trajectory of the health and financial crisis. That doesn’t mean you should forget about it; it will be back.
- Health then economic woes now come first. Your projects and company may face less opposition, but they also face new headwinds. We expect all eyes, agencies, and efforts to be focused on the trajectory of the coronavirus response, and then on recession amelioration. Regulators, permitting agencies, communities, and investors will prioritize those two waves before they are interested in what’s happening with your projects.
- Stakeholders are watching the messages you send. Everyone is watching. Regardless of your job, all of your employees, bosses, peers, communities, regulators, and investors are watching how you and the company are handling the challenges of today. Be mindful of the messages you are sending internally and externally — are they sometimes panicked and reactionary? Are you being unconsciously selfish and self-absorbed? Hopefully not. Being generous, mindful, optimistic, and looking to the future would be an excellent start.
At Adamantine, we are watching these trends for our client companies.
- Investor sentiment. For now, institutional investors will be focused on companies’ financial prospects. After the initial reckoning, investors will undoubtedly reshuffle some boards and executive teams. Then they will return their focus to ESG, climate, and social risk. The team at Adamantine and I will carefully monitor how intense and long this process takes to foreshadow the timeframe you have before social risk is once again front and center.
- Political winds. The electorate will punish abiding tardiness and/or incompetence in response to this crisis. After the health and economic waves, November will quickly approach and we may see a political reckoning for this moment. Smart leaders and companies will contemplate the implications to their business of a massive turnover in the political system, particularly at the federal level. I have been particularly relying upon Sandhill Strategies’ regular correspondence and calls on the political winds relevant to our business (reach out to learn how to get their updates).
- Company moves. Companies don’t lose more than one-half of their stock value and project months of sub-$35 oil and continue with business as usual. We are interested to see who thoughtfully reallocates capital and resources to the future, rather than just scaling back.
- What will the future be, anyway? Some industries, companies, and people will use this moment to articulate what the future will be and how they will lead the rest of us into it. In the same way that the oil price collapse of 2014 turned operational efficiency into an advantage, we are looking for which novel advantages your company can press.
It matters because:
This is a historic inflection point: much as with 9/11, we will look back on life before March 2020 and life after March 2020. There will be winners (those who invest and build trust) and losers. Which will you be?
The critical mistakes companies are making:
Instead of leading into the future, some companies are myopically focusing on the price of oil, their stock’s dive, and their operational budgets — and ignoring the massive uncertainty facing their employees and communities.
Seize the day. At Adamantine, we’ve redoubled our commitment during this remarkable time to helping firms such as yours keep one eye on the future – starting with the following recommendations.
- Leaders are made. Throughout my career, I’ve come to understand that I don’t know the measure of a person until times of turmoil. You – whether you are a company leader, an independent consultant, or an employee early in your career – have the opportunity to determine what kind of leader you will be during these times. Today, start with your coworkers and team members – listen to what is concerning them – and then demonstrate that you are crafting a proactive path forward.
- Think like a community member. Oil and gas industry companies are stellar at mobilizing in the wake of a natural disaster. Think in those terms today. Every stakeholder you have is overwhelmed by uncertainty. Look around and seek to engage and soothe your employees and communities. How can you mobilize as a partner in the response and recovery? I like this LinkedIn post and press release by Virginia Natural Gas which embodies this kind of thinking and acting.
- Keep some powder dry. Opportunities will soon abound, and some invisible risks will heighten. Keep a significant portion of your current response – we recommend 30% – to anticipating what’s next and what will return.
- Invest in social capital. You have an unprecedented opportunity to mitigate future social risk by investing in your relationship with your communities and stakeholders. Communicate broadly, proactively, and positively with each of your key stakeholder groups. This week we recommend offering resources to elected officials overwhelmed by health care logistics – asking them – how can we best help?
- Ponder smart reallocations to future risks. All forms of social risk – political, policy, and community – will undoubtedly return. As you contemplate budget, operational, and workforce reductions, seize the opportunity to invest in your ESG and community outreach strategies. You can get a lot of planning, engaging, and reporting done in the next six months if you design your reallocation carefully.
In my next post I’ll expand on these suggestions articulating first steps you can take.
What do you want to hear about in the coming week? Drop me a line and let me know what’s on your mind. Is your company doing something amazing? I’d like to profile it. If this post was forwarded to you, you can subscribe here.
Wishing you calmer waters ahead,