With the havoc that COVID-19 has wrought on companies comes the widespread assumption that the executives who lead them are rethinking everything, throwing out their existing strategies and playbooks and starting from scratch. “Pivot,” it seems, is the word on everyone’s lips.
It’s true that executives in some of the hardest-hit sectors have told analysts “everything is on the table;” the exact words of incoming United Airlines CEO Scott Kirby and CarMax CFO Enrique Mayor-Mora. But after reading more than 300 earnings calls in April and May, we can say with certainty that this is not what the majority of CXOs are telling analysts. Not even close.
While many are making important shifts in their businesses, including layoffs and cost-cutting measures, one of the most common — and surprising — things we’re seeing is how many companies and leaders say they are sticking with the strategies they put in place pre-COVID, with an eye toward increased market share and long-term growth. Some are aggressively accelerating plans for digital investments so they can push more transactions — both B2B and B2C — online. Others are saying their plans for M&A have not changed, and they will continue — as planned pre-COVID-19 — to seek out opportunities to buy companies that will help fill out their business portfolios, positioning them well for the restart and recovery phase.
Below, we’ve compiled a few examples from April and May, across a variety of industries. If these CEO comments seem surprising and unexpected, that is all the more reason it is dangerous to assume anything without actually reading the latest from the management teams of your top accounts. This is the kind of up-to-date insight you need as you craft your executive engagement strategies in our new normal. If you know what your target executives are thinking, especially during times of crisis, you can present viable solutions to their biggest problems, add value to your executive conversations and become a trusted advisor.
What They're Saying
Kevin Hourican, CEO, Sysco
"The crisis has galvanized our team to focus on a narrow set of strategic initiatives, and we are working in an agile and collaborative manner in a way that is better than at any time in our proud company’s history. This leadership focus will enable us to implement transformational initiatives.... This includes improving our Shop tool, implementing a new go-to-market sales structure and selling model, and developing and implementing a world-class pricing tool to better manage top-line growth and margin management. Each of these initiatives will help us to become a more agile, focused company. It will enable us to serve our customers more effectively, which will result in increased market share.” (May 2020)
John Morikis, CEO, Sherwin Williams
"We're going to gain share; be very clear on that. We're going to gain share, and we're just getting started... we've got the best people in the field, the best store managers, best reps. They've got great resources. And we're making investments during these times that we expect to come out of this pretty strong... If our customers are hiring people that might be less skilled or less experienced, that's where we can shine for them. We work with those customers... All of that allows maybe a less experienced or less skilled or growing-in-skill painter to be a producer for our painting contractors. So we like this type of environment where we can shine, and that's what we'll continue to really try to leverage as we move through this process.” (April 2020)
James Umpleby, CEO, Caterpillar
"We will continue to execute the strategy we introduced in 2017, which is based on growing services and expanded offerings while improving operational excellence. The execution of our strategy during the last three years positions us well for these challenging times. Our disciplined management of structural costs will help us weather the storm created by COVID-19. Our focus on operational excellence, shorter lead times and flexibility in manufacturing operations will allow us to react quickly to future changes in market conditions, either positive or negative." (April 2020)
Chris Nassetta, President & CEO, Hilton
"Our sales teams are engaged with customers on business for the back half of the year and into 2021 and beyond. In the last week alone, we booked tens of billions of dollars in Group business in the Americas. In addition, we are starting to see double-digit increases in digital traffic and booking activity across all segments. Global occupancy levels have gone from a low point of 13% to 23% currently. Assuming we start to see mobility and we don't have a significant recurrence, demand should slowly rebuild in the third quarter. These green shoots allow us to keep our eye on what the future of hospitality may look like." (May 2020)
David Gibbs, CEO, YUM! Brands
“[YUM! Brands is] accelerating a lot of trends in the business that would have taken years to take hold, like digital order and pay and delivery and technology and all the stuff that everybody is talking about.... And at the brand [level we are] adding all sorts of talent and all the different projects that we have to become much more technology-oriented and leveraging that for our business. Those things lend themselves to cross-brand collaboration. One of the great things that is going on right now is myself and all of the brand teams and the Yum! executive team are meeting every other day on this crisis to compare notes and leverage our learnings from around the world. We sit in a very unique position, starting with leveraging the learnings that came out of Asia and Yum! China, but all of the other things that are going on around the world right now. This is a great opportunity for us to work closer together and that is exactly what is happening. So I don’t think that is going to be a structural change. I think it is a mindset change. I have talked a lot about the need for even more collaboration in the new world. That is happening, and I think that will serve as well, when we come out of this on the other side." (April 2020)
Thomas Wilson, Chairman, President & CEO, Allstate
"We're going to maintain a strong commitment to telematics and expanding the Integrated Digital Enterprise... we are accelerating our Transformative Growth Plan, which will improve customer value with increased utilization of new technologies, lower costs in new auto insurance products." (May 2020)
Steve Miller, Chief Clinical Officer, Cigna
"There's going to be actually some really interesting, good things for healthcare to come out of this. We really believed that telehealth was going to be important for the future. But as you know, telehealth was off to a really slow start. But now it has gone nuts. The amount of telehealth we're doing now is extraordinary. We believe that this is actually going to be the permanent opportunity to lower the cost, improve the quality of healthcare.” (May 2020)
Rick Gonzalez, Chairman and CEO, Abbvie
“On the BD (business development) front, we haven't changed from what we have talked about historically… we've allocated approximately $2 billion per year that we can do more bolt-on kinds of transactions… the BD team have been very actively pursuing what we think fits strategically and doing the work that's necessary to determine, is it an asset that we want to add to our portfolio… We're aggressively pursuing those.” (May 2020)
Ryals McMullian, CEO, Flowers Foods
"We'll do our best to position ourselves to succeed no matter what the environment. While it was vitally important that we manage well through the crisis, it's equally important that we manage well as we come out of the crisis. And that's why we’ve got to keep one eye focused on the future and not lose sight of our four strategic pillars: Focusing on our brands; prioritizing improved margins; pursuing smart M&A; and developing the team.” (May 2020)
Trending Right Now
During this time of mind-blowingly rapid change, we’re committed to bringing you the latest trends we are seeing in the most recent batch of earnings calls reviewed by our team. Here are some trends we have noticed in the past week:
- A dramatic shift from a “Figuring out how to do business under COVID-19” mindset to a “Restart and Recovery” mindset
- Companies across industries touting diversification as an advantage (across geographies, businesses and customers’ industries)
- Ongoing focus on scenario planning (CEOs, CFOs), contingency planning (COOs, CMOs) and reforecasting (CROs, CFOs)
- Ramping up ecommerce, digital channels and digital investments in both B2B and B2C
- Digitally enabling the salesforce and in some cases, transforming the go-to-market structure/strategy for a new, mostly-digital, mostly virtual world
We’re maintaining a simple Google sheet with current top trends/initiatives and how they align to the primary C-suite roles. Here’s a current snapshot:
Your Next Steps
We all need to be aware that in some cases executive priorities are changing. In others, not so much--for now. Marketers should be focused on bringing the latest information--as it develops--to their account teams. Given that we employ a small army of really smart people to read and parse corporate earnings call transcripts all day long, we can help by feeding you the latest. What do you do with this information? Do what you have always done--align and support. Here are the four questions you should try to answer about all of your top accounts:
- How has their strategy/priorities shifted post-COVID-19?
- What are they cutting?
- Where are they investing--or doubling down?
- What can you offer that supports their current focus?
Friends, we’re still in the early stages. We are just getting through the first round of post-COVID-19 earnings calls, which only reflect a few weeks of this new normal. Next quarter’s results will be more dramatic and probably very different. Things are changing fast. Our team will be reading and digesting this information quickly and we will share what we’ve learned here. In times like these, information is everything, and we’re here to help.