A Virtual Town Hall - Managing the Coronavirus Outbreak
Courtesy of Focus Forward & FF Transcription
Melanie Courtright, CEO, Insights Association: Hi everyone. Thank you for joining us today. We'll be starting in just a couple of moments. Welcome to everyone who's joined so far. We have about another minute before we get started. If it's all right with everyone because we have participants joining pretty rapidly right now. Hello everyone and welcome to today's town hall. It's 12:02 so I'm going to go ahead and get started. My name is Melanie Courtright and I'll be your moderator. I'm the new CEO the Insights Association and I'm very excited to be hosting the webinar for you today. Before I introduce the speakers, a couple of housekeeping items I want to cover. First just a quick disclaimer, the information we share today was put together with a lot of care, but it's not intended to substitute for legal, financial advice or things that your attorney, accountant or financial advisor could provide you with. If you need to be connected with an attorney to discuss your specific issues, please reach out to us and we may be able to help you with that. Today's webinar will be recorded and as of, will be available on our resource page at the Insights Association website. We'll be sending out links for that. We would love to hear from you during our presentation today. We do want this to feel like a town hall. You can ask questions using the Q and A pod on your screen for private messages. There's also a chat pod for asking questions of the public group. We'll leave plenty of time for open discussion, we'll be answering questions from those that have already been submitted during the registration process and also from the Q and A section. If we don't get to your question during today's webinar, we'll be sure to follow up afterward. I am pleased to introduce today's first speaker Alan Hilburg. Alan is principal at Hilburg Associates and has been recognized seven times as the world's leading crisis advisor. Today Alan's going to share advice and a model for managing a business in crisis. After Alan is done, we will be hearing from Isaac Rogers and from Howard Schlesinger and then after that we will move into Q and A. Without any further ado, I'd like to kick things off by welcoming Alan. Alan over to you.
Alan Hilburg: Thank you, Melanie. Welcome everyone. Not very happy times. We've been following this and advising people on it for the last few weeks and it's quite upsetting primarily because of the conflicting information that everyone gets and unlike 9/11 where if you were on the East Coast you were quite concerned and if you were on the West Coast you felt pretty removed but still concerned. Here this is really affecting everyone. At every level and every community across the country. Melanie can we move into the slides I don't have that on my screen. Thank you. So what I really want to talk about today is crisis leadership. It's a lot different than crisis communication. When I started this, we probably pioneered this whole area of crisis leadership in 1982, 83 when we did Tylenol which I'll talk about in a few minutes. But since then it's matured and I think it's moved from crisis communication to crisis management and the only flaw in that is that it insinuates you're in the middle of a crisis and you have to manage it. What we're going to talk about today is really the art of crisis leadership. It's how to survive and thrive in the unthinkable but plannable in the COVID-19 VUCA world that we're facing. We use this term VUCA I think regularly and pretty from the standpoint that it accurately describes the world that you live in which is volatility, uncertainty, complexity and ambiguity. I think those four words probably accurately define not just a COVID-19 world but the world in general. Melanie I'm having a problem moving this slide. Thank you. So I want to ask three questions and if you could just punch through Melanie, what can you lose that will cause other people to lose too? Melanie? Next slide, what is the single most important asset you can lose in a crisis? If we were together, I'm sure we'd get a number of answers and then the third question is what is the high cost of low trust? Because in reality, Melanie in reality when you ask the question and there are 258 folks on this call right now. If I asked you the question what business are you in? You would say hospitality, energy, technology, research, any number of industries. But in reality, I would tell you that you're not. You're not in any of those industries. Every single one of you and every single one of us on this call today, we're really in the business of trust. And the ability to create trusted relationships both internally and externally are at the crux of your entire business success. When you look at this, let's think about what we're facing now in the context of trust. COVID-19 is what I would call an exponential crisis. What this means is, it is only going to get a lot worse before it gets better. It will peak and it will begin to subside, and it will disappear and depending on who you talk to, I've talked to a number of physicians including folks at Harvard and other schools of medicine and hospitals that we represent. I can tell you that everyone is saying that it's here for at least 90 days and some folks are saying it could be here for as long as 120 or 180 days. But most of the health professionals that I'm talking to right now are telling us it looks like about 90 days. I want to share with you in the context of this concept of exponential crisis the parable of the lily pad. If you imagine a pond and there's a lily pad in it and every day the lily pad in the pond doubles. So at the end of 30 days the parable would ask the question, on which day, on the 30th day, on which day now that the pond is completely full of lily pads, on which day was the pond half full? And when I've asked this question the majority of folks say on the 15th day. And the reality is it's not. It's on the 29th day. The point being it's only again, we have to manage this from the standpoint of recognizing that what we, steps we take today are going to affect the outcomes 90 days from now. So when we look at, how do we protect trust in a COVID-19 VUCA state? That is the fundamental question. This is not a workshop on crisis communications, it's really a conversation that we're looking to have that really focuses on how does VUCA and the COVID-19 VUCA world affect crisis leadership and crisis decision making? What decisions do we have to take today that are going to have implication for the next 90, 60, 30 days. Funny thing about crisis, is that crisis is what happens when what we thought is safe surprises us. As we all read beginning and late December, early January about COVID-19, I don't think we extrapolated that and said how does this affect us? And we didn't move necessarily fast enough because we were not told to. But I think what we thought was safe and we thought we were safe from these kinds of pandemics, turns out that we're not. So crisis lesson number one. The crisis is never about the crisis. Ever. It's never about the crisis, Melanie. And the reason is you'll never be judged by what caused the crisis, you'll always be judged by how you respond to the crisis. This is what character's all about. Let me spend a little bit of time and maybe give you the best example if you went to Harvard business school then you'd know that this is the platinum case history. We managed the Tylenol crisis in 82, 83 and for those of you who are not familiar with it, let me just share with you what the Tylenol crisis was. Tylenol and still is, is the number one headache remedy in the world. In 1982, in October of 1982 I got a phone call from the brand manager who said I think we've got a problem. What's that? Well in Chicago apparently somebody took Tylenol, died. What should we do? I said well clearly we've got to pull the product off the shelves. He said yeah that's a good idea, we'll pull the product from the shelves in store. I said no, no. We've got to pull the products at least from the shelves in Chicago at this point. He said well that's a bigger decision that I have to make. We reached out to the president of McNeil Labs who was the J and J subsidiary that made Tylenol and he said no, no. I think we've got to pull it from all of Illinois, maybe the Midwest. But that's a bigger decision than I can really take or want to take so let's call the chairman of J and J which we did at midnight on Sunday night. Which is a high-risk call to Mr. Burke's credit he said no, let's pull all the Tylenol from the shelves anywhere in the world. So within 10 days we pulled 300 million tablets off the shelf and we destroyed them. Now the question is what next? At the time that we did this we had 33% market share; we went to zero. Now we have zero percent market share and the country is panicking. People are going to their medicine chests, throwing out the Tylenol or bringing it back for a refund. The question becomes how do we relaunch this? How do we preserve the trust that is represented in 33% market share? And the answer was it had nothing to do with the tablets itself. So there was a lot of suggestions and recommendations that we turned what was a caplet which you could pull open which is what the murderer did. He pulled open the capsule, put arsenic in it, put the capsule back in the box and put the capsule in the box and put the box back on the shelf. So in order to maintain trust was the choice, the product or something else? We recommended that the trust was represented not in the product, it was represented in the package. So we transformed packaging. What enabled us to make that decision? It was what Johnson and Johnson called their credo. Credo was an early twentieth century word for values. But the first responsibility that Johnson and Johnson felt it had was those who used the J and J products. What we recommended was five levels of trust. Five levels of safety. We took the product, we put a white cotton ball in it, which signified purity. We then put aluminum on top which was the second level of trust. We put a child proof cap on it with a third level of trust, we put plastic around the top which was the fourth level of trust. And we put plastic around the box which was the fifth level of trust. And the reason that I think Harvard and many other schools and business schools still refer to the Tylenol case history as the platinum case history for crisis leadership is because it really had nothing to do with communications. It had everything to do with protecting the trust that the consumers had in the brand. I think that's probably where we want to start today. Melanie? So crisis lesson number two, crisis management is not about reputation. With crisis it's never about reputation. Reputation is a communication metric. Trust is a business metric. We have to just remember that. If you want to visualize something. I've always said a picture's worth a thousand words, but a metaphor is worth a thousand pictures. If we're looking at this, let's think of trust as the tree and reputation as the shadow. So the question then becomes what happens on a rainy day? There is no shadow. The only thing that stands is the tree which represents trust. Let's stop making reputation what we try to achieve and be concerned about our reputation and let's focus more on trust which is the conversation we're having today. Crisis leadership is not just about public relations or media. Crisis leadership is really about protecting business continuity, it's about protecting trusted brand relationships and I have to tell you that of these three, I would say this is equally important and I'm not sure we think about this on a regular enough basis. That crisis leadership is about protecting leadership decisions. At the end of the day what you're evaluated on and the company's success is often determined by your decisions. Crisis leadership is about protecting those decisions. It's about protecting business continuity and it's about protecting brand trust. Crisis leadership then in terms of takeaways, you're not going to be judged by what caused the crisis, you're only by how we respond. The crisis is an opportunity. It's an opportunity to demonstrate your character. That's why we never let a good crisis go to waste. The first priority of a crisis is to protect business continuity. Protect brand advocate's trust. You know who your brand advocates are, and we need to be reaching out to them on a daily basis while we're going through this crisis. And most importantly protect trust in your, and your leadership's decisions. And the most effective way to do this is to live our values. The reason we have values and the value of values is in fact to define how we make decisions. That's the value of values, the purpose of values. So when this COVID-19 VUCA crisis world what are five steps that we should take? Number one, crisis leadership decision making. We'll talk about that. Number two melt the iceberg of ignorance. We'll explain that. Emphasis Socratic leadership. In other words, leadership based on asking questions. Not telling people what to do. We may know what we want to do but embed the answer in the question. Measure and build trust internally and galvanize trust externally. Melanie? So when we look at what happens inside your brain when you're faced with a crisis it's remarkable. We studied this and we've written a number of papers on the four chemicals that really don't exist unless you're in a stress-based situation. Your executive team and yourself made great decisions but you make decisions differently when you're in a crisis. Because the chemistry in your brain affects those decisions. When we look at a picture of that, stress eats holes in the brain. If you take the brain mass in its entirety, once your stress level rises as it's doing right now, giant holes starting to appear in your brain and your decision process changes dramatically. What we suggest is two activation steps. We have a program we call Dragon's Den but let me just give you the background on it. Dragon's Den involves two very important steps. One psychometric test to understand how your leaders make decisions in stress-based environments. If you haven't deployed the Hogan assessment which is what we use, there are other assessments but by far the Hogan assessment is the most valuable. The Hogan assessment addresses how executives make decisions in stress-based environments. With all the other psychometric tests that you may do for your leadership, knowing how your team is going to make decisions is important. I can assure you, I've talked to 100,000 people and have asked the question in any interview that you ever did, did you ever ask the candidate how you make decisions? And I have to tell you 99.9% of the time people say no. Number two is so have you ever asked your leadership team how they make decisions? Number two is stress tests with real time scenarios your leadership's decisions capabilities in these kinds of VUCA conditions. And then cross analyze with psychometric tests. I know we talk about this like desktop or situational crisis training or crisis simulations, I cannot over emphasize the importance of immediately scheduling a crisis simulation just to test how your leadership team is making decisions in a stress-based situation.
Alan, before we go to the next slide could you quickly define VUCA for the community?
Again VUCA is volatility, uncertainty, complexity and ambiguity. Volatility, uncertainty, complexity and ambiguity, which is exactly what we're facing right now.
Number two melt the iceberg of ignorance. There is a Japanese professor who in 1990 created the iceberg of ignorance. Basically the iceberg of ignorance says that executives know and understand and they see 4% of the problems. Team managers see 9%. Front line staff sees 100% of problems. Problems hidden from senior management. What gets in the way of information going from your staff and team leaders and team managers? It's culture. Do we have the culture that allows us to speak truth to power? Melanie, does your organization encourage speaking truth to power? In North America it's more likely. Does your organization encourage see something, say something? We created back in 2002 I think, we created the Department of Homeland Defense, see something, say something. You see it everywhere at all the airports but in reality, it works equally as important in terms of our own culture and do we have the culture where everyone feels they have the authority if they see something to say something? How do you address this on a very practical level? Does your organization practice top down or bottom up risk forecasting? You have to ask yourself, if the only thing you do is top down risk forecasting, I can assure you you're going to see not much more than 4% of the problems. Unless you start doing bottom up risk forecasting. We have a thing called risk 2 360 which basically is bottom up risk forecasting and that's exactly what you need to do. Whatever format you do and whatever format you choose to use you have to do bottom up risk forecasting. Number three as Socrates would say, what question should you be asking? So here what I'm trying to do is put together a list of questions that no matter what else you're asking, you need to ask these. Let me walk through these really quickly. When considering impact what short, medium and long term potential effects and impacts of COVID-19 on our business? We have to ask that. You need to ask that not only to your leadership, but you should ask throughout your organization. As a result what are the measurable metrics that will alert us when certain thresholds are reached? Where do we gather real in time intelligence? Ignorance is the parent of fear. And so what we have to do to protect our internal and external stakeholders from feeling an incremental growth of fear is to provide them with real time intelligence. What are our internal and external alert systems? Where do we get this from on regional, worldwide developments? Who is responsible for this? It's incredibly important that someone in your organization today is assigned the responsibility of mining for updates. Number three, how are we updating and adapting and managing our business continuity plans? I certainly hope you have them. But if at nothing else you have to look at your business continuity plans and go back to the three priorities. Business continuity, protecting trust in brand relationships and protecting leadership decisions. Number four thinking supply chain. How are our vendors and partners in our business reliant on us? And what is the impact of our business as a direct result of this affecting their business? We have open communication. Are you talking to them regularly? Are you talking to your vendors and partners about what their contingency plans are? Number five at what point do we need to close our doors? And it may be for 30 days, it may just to evaluate where we are. It may be for two weeks to evaluate where we are. Number six as our organization is a leader within our communities do we know what our city health department and related health entities are planning, what their saying? Have the person who's in charge of updating have a regular contact with these. Number seven you can go back and at what point, I want to go back to this because this is really important. You have to ask yourself, do we go on garden leave? Do we protect our employees depending on the nature of our business and allowing them to work at home? Melanie? Number four measure and build trust internally. I can't over emphasize that most organizations ask questions inside out. OIVIO is a key here. If you ask questions inside out, you're not asking questions to be heard, you're asking questions to be listened to. We have to rethink how we communicate. Communication is not about speaking and writing. Communication is about being listened to. And the only way you become-go back Melanie please. The only way you can be listened to is by communicating outside in. The questions you ask, the communication you have with everybody, it can't be about you. It has to be about them. So if you're talking to employees, you're talking to them, you're talking and communicating in terms of their needs and their preferences and their choices. If you're talking to vendors and suppliers and customers, always use language that's outside in, that speaks to their needs, how they're feeling, not how you're feeling. This concept of walk a mile in their shoes, nothing could be more important than as you talk to your employees and your partners and your customers and your vendors. Use language outside in that speaks to how they're feeling. Number five, galvanize trust externally. There's a concept we talk, call triple A's. Triple A's are allies, advocates and ambassadors. Melanie? What do we mean by that? These are folks, if the emphasis here is on trust and it has to be. This is not a communication problem. This is a trust crisis. We have to protect the trust that your customers and your employees and your vendors and all your stakeholders, we're trying to protect the trust they have in you. What we need, we all know that you never trust anybody that says trust me. We have to create a set of ambassadors, allies and advocates who revalidate the trust that folks should have in you. Either employee ambassadors and allies or external ambassadors, allies and advocates. I can't tell you that when this call's over, you have to think about who is that group? Who is the half a dozen folks that would validate the trust in us because of who we are and how we make values-based decisions? I can't over emphasize the importance of reaching out to them. So let's in the spirit of time let's go through a couple of quick closing thoughts. One, as I said earlier, never let a good crisis go to waste. And the reason is that, sound it's hypocritical but it's so true in my-I've been doing this for 40 years-it is so true. Because a crisis is an opportunity. It's an opportunity to demonstrate who you are. It's an opportunity to demonstrate your character. It's an opportunity to demonstrate your values. Don't let this crisis go to waste. Show your employees, show your vendors, show your customers who you are as-in terms of character and in terms of value-values, and that is how you protect and build on your trusted relationships. And so when I talk about values versus facts, we don't have all the facts. Depending on what you read and who you listen to, you get conflicting information and conflicting knowledge on an hourly basis. Stick by your values. There's never been a better time that I know of that when you're in a crisis, to simply remind people of our values, what the value of values are, and to talk about all the decisions that we're going to make every day, every hour are going to be based on our values. And mostly, let me remind you, probably doesn't need it, but protect your most valuable asset. At the end of the day–and the end of the day may came 90 days from now, or 60 days, or 120 days–but I can rest assured, I can tell you with a great deal of confidence, this will come and go. I mean, it's interesting that the Buddhist approach to anxiety and fear is to bring curiosity and respectful attention, and a certain gentleness about things. And I think if there's any message that you want to give your employees now, it's the concept of what I would call brother's keeper. I think what makes America great is how we can show random kindness. And if we can talk to our employees about the importance of showing random kindness to each other, their family, their community, the customers, their stakeholders, this is one message that I think will help bring about a little bit of decompression to the anxiety and the fear that your employees are facing. And last point I want to make–and you probably have gotten the picture by now–but this is not about–crisis is not about communications. It really is about trust. And the communication that we want to do, the outreach we want to do, the hand-holding we want to do, the putting our arm around the shoulder that we want to do, the confidence building that we want to do, it has to be based on trust. Because the reason that trust is everything is because it's the only thing that means everything. So with that, Melanie, I'm happy to take questions. And I also want to say that anyone of the 275 folks that are on the line now, if you have a question and you're not sure, just pick the phone up and call or drop us an e-mail. We just–we feel like at this point, bringing our experience to those who are facing the challenges and doubts and fears, that's a responsibility that we have to our national community, and we're happy to help in terms of the–any members have insights that really need any answers to questions.
Thank you very much, Alan. And let me just remind everyone, if you have some questions, to drop them into the Q&A section of the chat box. Next, we will hear from Isaac Rogers and Howard Schlesinger. Howard's a general counsel at Schlesinger, has been a licensed attorney for 42 years. Howard, can you tell us what you're seeing at Schlesinger? And what your approach has been to managing through the outbreak?
I think what I would say to start with is our philosophy on this crisis and on basically our business, and I'm kind of focusing on three Ps, which is really planning, being proactive, and not panicking. And I want to emphasize the not panicking in this particular case. So what are our goals? I mean, basically, two main goals–to keep our business operating profitably, and then to be good citizens, in this case, by mitigating community spread. That's really where we've been focusing. So in order, really, it's keeping our employees safe, keeping our respondents safe, and keeping our clients safe. And it all relates back to the trust that Alan had spoken about. I mean, that this really rang true when I was listening. So what are we seeing specifically? We have 28 facilities in the US and several in the EU. So what are seeing at our 28 facilities? January was a great month. February was a great month. The first week in March was the same. And the second week in March there, which just ended, we started seeing cancellations. We've probably seen about 30% cancellations in our facilities, and we expect that that will be the norm for the rest of March. We have a business book, but where we expect a lot of cancellations. Now, I say cancellations–what of that 30% are truly cancellations and how many are going to be postponements is really an open question, one we don't have an answer for. So how many of those will be rescheduled once this crisis is passed, whether it's a month, two months, three months, four months, five months, that'll be dependent upon timing, it'll be dependent upon whether or not a study cannot be scheduled two or three months down the road, because from the client's perspective, the research needed to be done now. A timing issue. Or whether or not it will be. Will the projects that we are not doing now be done in the summer and the fall? And from a budget perspective, will a client be spending the same amount of money during 2020? Another open question that we don't have answers to. So we will see over the rest of this year how that plays out. We've seen some shift from in-person qual to online qual. And as far as quant's concerned, our quant business hasn't really been affected. We haven't really seen any reduction, we haven't seen any real increase yet, although we think we're going to see some quant increase probably during April. But that part of our business has been fairly steady. Respondents. I know there are people who are saying, what about respondents, what have the show rates been, have we noticed any problem with that? No, actually. The show rates have been the same. We haven't had any reduction in that. People who have come to research have still been engaged. We haven't had issues with that. Recruiting has become more difficult because we've–one of things that we do is, we try to determine whether people are at risk. And if they're at risk, they terminate. So we have a series of questions we're now asking to determine whether someone is at–been traveled to China or South Korea, etc. or Northern Italy, whether they have symptoms, whether they've been tested, things of that nature. So we are–we monitor that. It makes recruiting a little bit more difficult, but we haven't any really had trouble filling groups. So that's kind of the state of our union that we've seen. We don't–we think it's going to get worse. There's no question in our mind. We're doing a lot of planning and modeling right now to determine what effect what we think it'll have in April and in May and in June, and planning accordingly. But it's a day-to-day adventure, and literally a day-to-day. We have meetings, we have discussions regarding the virus and how it affects this industry and our business, literally on a day-to-day basis. So that's, I guess, in a nutshell, what we see the status is at present.
Thank you. I see a few questions coming in. I'm going to pitch it over to Isaac first and then we'll answer some of these questions. Isaac is the CEO of 20|20. Previously served as 20|20's chief innovation officer responsible for product strategy and development. Isaac, what is 20|20 seeing? What questions are you getting? How are you guys leading through the issue?
So I'll echo some of the same things Howard said. We are a bit different in that our markets are a little bit smaller, so we're in Charlotte, Miami, and Nashville. We haven't seen a huge amount of projects canceled. Matter of fact, best as we can tell, maybe just a small handful. We've seen some people delay some work and we've seen some people move some work to some of our digital platforms. But in these smaller markets, it maybe doesn't seem to be as big of an issue yet. We fully anticipate it probably will be, but we don't see it yet. The in-person side of our business has definitely seen an effect. We're looking into the month of April and seeing the number of bids that we'd normally see for that month is probably about 30% lower than we would expect. And this has only been going on wholeheartedly maybe a week-and-a-half, and every day, it seems like that number is changing. In some cases, clients tell us that they specifically are coming into our facilities because they can drive, and their travel bans airline travel from their corporate offices, but it doesn't ban local market driving. So some of our clients are still able to do the research. Now on the digital side of the business, I think it's probably no surprise, we can barely put the phone down. We honestly have no idea how much our volume is up in the digital qualitative platforms because we at this point are having trouble doing anything but triaging what a price could be, what a backup plan could be. And if I had to put a number on it, I'd probably say 400 to 500% increase in digital. It actually started late last week. We saw a lot of requests coming in from places like Italy and the UK. They were more frequent than we would normally see. That has continued. But then, during the course of this week, we've seen just an enormous amount of folks, primarily, I would say 60 to 70% of the time, looking for a backup plan for a project that's scheduled for later in March, maybe early in April. Every day that goes by, the clients are giving us heads-up that they're actually going to go ahead and convert this project because they're getting more and more concrete information about how long a client's travel ban may last or how difficult that might be. On the respondent side, I'll echo some of what Howard said. On the in-person side, we actually haven't had any issues as we try and screen out folks who may have been exposed, or have people who may be reticent about being in a small group, that hasn't happened yet. And again, I want to put that in context, that we are in Nashville, Charlotte, and Miami, and they're much smaller markets, so maybe that's a phenomenon we'll start seeing next week. We've not seen any drop-off in the quantitative activities we do for things like screening. So on the online side of the business, the digital side, that is–we've had no ill effects. On the in-person side, we're starting to see them. Frankly, they're not as dramatic as we were picturing on Monday or Tuesday, but they are–it's definitely something we have to deal with.
Thank you. I'm going to move into Q&A now. We have quite a few questions. There's a series of questions here about quality of the data and representativeness of the data, is what I expect that that means. Are there concerns, both in qual and quant, on who is taking the surveys? And then on who their survey answers might be impacted by the current environment? Isaac or Howard, do either of you have a point of view on that?
Isaac: I'll go first. We had this conversation yesterday. We're just not sure yet. And I think it largely depends on who the client is and what their objectives are. We've had, like I said, a small number of projects canceled, but some of the ones were specifically canceled on us have to do with health care. And is this a time when you should talk to people about kind of more mundane health care questions? Probably not, because their focus is going to be on something very specific. And the CPG side of our world, we haven't seen a huge amount of questioning of is this the right time to do product testing or copy testing or anything else, but I think it's probably something to keep in mind. And there's also the–we're seeing kind of the inverse a little bit, which is we've got some companies who probably need to react to what their population of users might expect from them, like a–I think like an Uber or Lyft, somebody like that, how do they need to get out communication, how do they need to assure their population that you can continue to use those products. If you're somebody like a hotel chain or an Airbnb, what's the communication you need to do. So I think there are some clients who you might say it's not a great time to do the research we planned, but I think there's probably some other clients who probably need to do research to understand exactly how their consumers are thinking about this.
Howard: I would just add to that, what we've seen is the respondents who come to do research and, it's very early so we don't know because the answer might be different next week or the week after, but at this point, people who have shown up to do research are as engaged as they typically are. We have seen–it's been a little more difficult sometimes to get a doctor to come to a study, because, one, they're very busy; two, they're worried about being infected because they're so busy and so needed, so. But once you get someone to the facility who's going to participate in research, I don't think there's a problem. And certainly, anything online, we haven't noticed any problem whatsoever, or in the quant space. So so far, no. But the answer could be very different a week or two or three weeks down the road.
So, one quick question for you two and then a couple of questions for Alan. Where you're being asked–are there times when you're recommending not doing in-person? How are you making your–how are the conversations going with your clients around when it's OK to do in-person, when it's not OK to do in-person, and how you go about moving in-person to online? Or for clients who really just want to move quickly to online or digital or more nontraditional methods, how are those conversations going?
Isaac: I'll do a quick answer. We have noticed a slight tendency for larger group events, things like mock trials, to be more concerned than maybe IDIs or very small group studies. There's a little bit of an effect of how big the focus group or the interaction might be is giving people some more pause. That's a phenomenon we've been noticing this week and we anticipate that to continue happening on–for some people, they might–an IDI is not a large risk profile and, but they might see getting in a room with 12, 15, 20 people being a totally different set of math. And so we're starting to see that breakout occur.
Howard: That's exactly what we've had. We've had some very large projects with a large number of respondents canceled. We had a very large one this week canceled in New Jersey and New York for that reason. And we've started talking to clients about it and we're getting clients who are talking to us about changing an 8- or a 10-person focus group, maybe doing dyads and triads, allowing social distancing in a focus room. So we have people could sit four to five to six feet apart, rather than sitting within a foot of each other. So that, we think will probably start happening more to the extent in-person research will continue to be viable. And it's a client-by-client analysis and discussion. Some clients are comfortable continuing with the research, and some are not. And as long as we ferret out people who are at risk, I think clients are more comfortable when they see the plans that we've implemented to in fact ferret out people who are more likely at risk. And we've done–actually, we're doing it with clients, too. We're advising clients, please don't come to a facility if you're ill. We don't need infection to begin from the client perspective.
One of the things I talked with someone via e-mail about was, while you're screening for preventing ill people from coming into the facilities, we also spoke about adding a question about virus concerns and virus impact to quant studies, so that you can use it as a segmentation data point in the data sets themselves. Are you guys doing–seeing any of that? Are people adding a question or two for a short period of time to their digital work?
We're not seeing–I haven't seen that yet. It's pretty clever though. We may borrow that, but no, we're not seeing it yet.
Alan, I'm going to ask you a question. One of the participants has said, what would you suggest to these two gentlemen who are speaking, who are dealing with moving quickly from off-line work to online, and managing risk and managing trust? Would you have anything that you would suggest to help with that?
Not from a process standpoint. I think that the idea of taking someone's emotional temperature is not a bad idea. Because I think when we do–when we interpret the data and we try to understand it better, we have to ask ourselves, how are they feeling when they're–how are they generally feeling. And one way to get folks back to neutral, which is fundamentally where we want them when we try to take their pulse and try to ask them about how they're–we often, at least in research that we're involved in, we–it's not just asking people what do you think. It's how do you feel about. And so it depends on whether you're doing quant or qual. But the important thing is to try to get the respondents to neutral. And I think one way of doing that is just ask them how they're feeling and let them express however they're feeling. And that's going to be somewhat of a cathartic move that I think would have a lot of benefit.
Thank you. So a few questions here about what the brands might be hearing, what the agents are hearing from the brands about their budgets. Moving work, canceling it for postponement reasons while the virus crisis takes place is one aspect of it. But what are people hearing about the budgets themselves? Are they beginning to move as people plan for the economic impact? So if anyone on the call has a point of view on that, if you're a brand and you would like to offer your point of view, please type it into the chat or the Q&A pods and I'll read it out loud. But, Alan, Isaac, and Howard, have you heard anything about project–about research budgets moving as a result of this?
Alan: I'm on a few boards. I can tell you that the board meetings that I've been attending, with no uncertainty, the CEO of every company has made it clear that we're moving to much more of an austerity position, at least for the next 30 to 90 days, which we can determine what the fallout's going to be. In some areas, depending on the company, we're seeing more sales–if it's a consumer products and we're seeing so much binge and panic buying, there are actually a lot of companies hit their March numbers in the middle of the month, just on the basis of binge buying. Of course, there's a–you come out of that and you have the opposite. So but to answer the question, I'm seeing and I'm hearing that companies are instructing everyone to scale way back, at least until there's more certainty.
Thank you. Isaac? Howard?
Isaac: We've just had one client make a mention of it so far, so–and again, where we are in the process, we're–we'll be some of the last people to know some of those things. We've just had one client practically reach out and mention that they are reviewing their current budget cycle and there may be adjustments.
Howard: What we've heard, and we talk to clients a lot, but most of them say they don't know, because they don't know what's going to happen, how this virus will affect the economy long term. Long term meaning maybe the rest of '20, maybe into '21. We've also heard from some who say, I've got budget of X for the entire year of 2020. If I don't use it in April and I don't use it in May, you can bet you're going to have a very, very busy summer and fall. Typically, in our industry, the fall is very busy. The summer may become just as busy for those who want to and need to spend their budget throughout the year. Whether there'll be budget adjustments based on our conversation today, we don't know.
Thank you. I do also have something from one of the brands that is a participant. And he says–Lawrence says, we are not conducting any research at the moment, but we have no plans of cutting our research budget for a very large health system. And so it seems, while there is prudency beginning to take effect, that there are no firm plans to radically cut budgets. But it's a bit of a wait-and-see approach. So I have a question here for Howard. What are the differences you're seeing based on geography? Are you seeing any differences based on some highly populated areas, where the government or the leadership has made more stringent action? California, New York, Dallas declared an emergency and no gatherings of 100 or more. Are you seeing any geographic issues with in-person research?
No. Actually, no. We're all over the country, and we're seeing it's a week-to-week. It's insane, actually. We have one week where we're a facility, and wherever we're located, let's say in Atlanta, it's just busy. The next week, they're not. One week, New Jersey's busy, the next week they're not. New York, LA, San Francisco, Dallas, I could go on and on. So it's a client-by-client. The market, right now, it's not–obviously, this virus is not that widespread from a research perspective that people are not going about their business. I'm in an office building in Isla[ph], New Jersey, 10-storey building, the parking lot has been filled every day this week. So are the other Fortune 50 companies in this building working from home yet? No. Have they stopped working? No. So will it change next week? Will it change the week after? Depends on what happens with the spread. The worse it gets, I'm sure there'll be adjustments.
Thank you. We also have another response from a brand leader. I think it's really too early to tell, and likely based upon the industry. So it's a little early in the process. Nobody really knows exactly how much economic impact it will have. But it–so it's a wait-and-see approach with some postponements, and then, obviously, some shift from in-person to digital. The next question, and this is a topic that we're considering having a follow-up session on, the next question is about cancellation policies. In general, though, for all of you, how are you implementing cancellation policies? Is it a bespoke process and based on your relationships with your clients? Certainly no legal advice posed here, of course. But how are you handling cancellations?
Howard: I'll handle it first. We are working with clients directly and we are adjusting what our terms and conditions are for cancellation. So a project that's booked and it's started, if before this happened, if someone said, look, I need to cancel because we've decided to push the research back whenever, typically, they'd be charged facility, recruiting, and any out-of-pocket. We've now gotten to the point where, in general, we're waiving facility charge. So if they rebook, if it's postponed and then booked let's say two months later, they would have two facility charges prior to the virus. Now there'll be one facility charge. If there's been any recruiting done, they'll be charged for recruiting. And any out-of-pocket, they'd be charged for out-of-pocket. So in general, we've softened our terms and conditions in general, depending upon the client and if there's some other factors involved. But in general, that's the way we've approached it. And clients have been very receptive. And it's–we're trying to work with our clients, trying to make it work for everybody.
One of the participants said that their firm is not charging a cancellation fee during this time at all. Isaac, what about you?
Yeah, you know we're trying to do it along the lines of what Howard was saying. And I don't think–I could check with our folks–but when I last mentioned it to them, I don't think we've seen any significant cancellations that we didn't just move to one of the digital platforms. So we are in kind of a unique situation there, because we can just kind of flip it over a new methodology. We'll work with our clients. And look, if somebody gets into a jam and they have a travel ban come on at the last minute, we'll do everything we can to work with them. And so far, it's rather minimal we're having to do that, but as this thing accelerates, we're just–we play each project individually.
Well, one last quick topic before I do some next steps and give some recommendations to the group. One of the questions was about taking care of employees and their need for time off. We've seen some things that the government has been recommending in terms of extending paid time off to people who are hourly. But we've also, we have a question here. I have heard owners asking their full-time employees to take non-paid days off at this time, which is a concern. How are you guys, and in Alan's words, making sure you protect your most important asset, your employees. What are your policies around employees and employees who need time off?
Howard: I'll start. We are not doing that. We are not asking anyone to take unpaid time off first. We're saying to people who are ill, it's you take PTO. We also are about to enter into work-from-home for our recruiting, both in the EU and in the US, and our project management people. So whether they'll all be working from home or whether depending upon what location and whether we have community spread in an area, they would–they may still come to the office. We'll have to see location by location. And then hopefully they'll be working and not need to be out of work. But obviously, those who are ill are going to be using PTO first. We haven't really determined whether or not we're going to do any extended PTO. That's just in discussion stage at this point.
Isaac: We're in a similar situation to Howard. A couple of things that have been interesting for us recently is, and specifically in the [INAUDIBLE] area where we've got them pretty much the lion's share of a lot of our staff. We've kind five different offices, about 160 folks, but 80 or 90 of them are actually here. We've had a lot of schools in the area that, they spring break next week and they have either started spring break two or three days early, or they've made mention that maybe they won't come back from spring break until later. And so even our folks that have started to work from home, they're kind of dealing with many children running around in the background. And so we're trying–the next puzzle we have to solve is, if the homes are going to be filled with kids running around all day long, how do we make sure that they have everything they need to be successful as far as, obviously laptops and things, but also, do they have headsets and headphones and things so that they can continue their conversations, even when their kids are running around beating up on each other, which might only be about 15 feet from my door.
And the only thing I can add are three points. One, just picking up on what Isaac was saying. Recognizing where both parents are working parents, and now all of a sudden, they're confronted with their kids being home and no plans for childcare, I think everyone has to be a little bit more understanding of that reality. In response of the first part of the question, we're seeing our clients pay for self-quarantine, and we're also–then the personal time off and the medical. If they're diagnosed positive, that's one protocol that needs to take place. If they're diagnosed that there is no diagnosis of corona, that's another. But I think that we're seeing where possible, once someone believes that they've been exposed directly to a positive corona virus victim, they're paid for their two weeks, 14 days of self-quarantine.
Thank you. Well, we're at the top of the hour and we'd love to spend a bit more time. There are a lot of questions we didn't get to which we will get to. I promise as we do follow-ups. Let me talk about that next steps for a minute. What the Insights Association is considering is weekly town halls covering some crucial business topics during this time. I'd love to hear from you, either the chat or the QA or personally at my e-mail, melanie@insightsassociation, if you think that this is a good idea. We're going to be looking at setting topics based on the environment announced on Tuesdays, and then doing the town halls on Fridays, like the one today. Current suggestions include recession planning, online to off-line methodology, contract cancellations, remote best practice both for the employees and for the employers, and some econometrics, some econometric modeling. We have some feelers out to speakers on all of these topics. Love to hear from you if you think that that's a good idea and what you're most interested in. Also, would love to hear your ideas and requests–what do you need, how can the Insights Association help you. And remember to use our Engage platform. Everyone on this call is a member. You should have access to the Engage platform. There are communities, there are brand-only communities, there are CEO communities. You can ask questions of your peers and colleagues and get support. And if your business has been impacted and you need resources, I really hope that you'll reach out to us and let us figure out as a community how to help you. So again, please reach out. We will answer all of the questions that we didn't get to. I will answer every e-mail that lands in my inbox. And I thank every one of you for joining today and look forward to spending some more time with you guys again. I think very much, first, I'd like to thank Merrill for helping me meet and get to know Alan. I'd like to thank Alan, Steve - Alan, Isaac, and Howard for their time today. And I thank everyone for the time they spent with us. Thank you very much.