There are no playbooks for now.
The ceo of a top-five ranked home builder told me as much, saying, “I hate to say it, but [as a leader], you don’t want practice at dealing with what’s going on.” Unprecedented, sometimes, is actually so.
Leaders in construction and real estate–residential and otherwise–are making the hardest kinds of decisions these days. They’re contending with extraordinary, fast-changing conditions on a real-time triage basis–seeing first and foremost to the health and safety of team members, customers, and their complex of partners. At the same time, they must plan. The viability of their firms including their stakeholders’ interests faces unprecedented pressure.
Daily war-room style command centers in organizations of all sizes deal with the bi-modal challenges of the coronavirus health threat and the economic, business, and financial turbulence, each of those a shifting ground beneath us, each of them barreling ahead, relentlessly.
Huddles, specifically scheduled to allow home-bound team members ventilate about what they’re afraid of, frustrated with, angry at, and confused by, are–we hear–part of the no-longer-virtual connective reality of worklife. We know far more personally about colleagues than ever, we share foxhole prayers, we learn about a different side of so many people we’d been professionally acquainted with for ages. We see their kids, their pets, their interior decorating, their sanctuary at a level we may never before have given one random thought to.
Roiling beneath the dynamics of the moment–a perhaps inevitable accompaniment with high levels of fear–is a big challenge for all. The challenge comes packaged as a four-letter word. Them.
We have two epidemics right now–one, the still-rapidly-spreading novel coronavirus and the other, the volatile fever-chart deterioration of the financial investment markets.
A third contagion, one that sets in motion a new avalanche of “us versus them” feuds, legal battles, and a breakdown of good faith among partners, is one none of us can afford right now. Self-preservation and self-interest and selfishness–at the expense of the greater good–is a very thin line right now, and leadership is the last-best defense against the emergence of this third contagion–an Us Vs. Them battle royal.
We can see it brewing on the “essential services” front–where local, regional, and state jurisdictions declare one policy and national policy may or may not be consistent. We want business continuation and the ability of construction’s infrastructure to support the vital stream of activity necessary to sustain existing sheltered space and add new home units into a housing market that sorely needs it, especially now. We also want hard, tangible evidence that owners and supervisors and corporate interests are going to the greatest lengths to ensure the health and safety of not just their own team members but the entire value chain and building lifecycle.
Have a look at our interactive heat-map tracking state and local and national overlays in the “construction as an essential service” conversation. We’re hosting a virtual Construction Town Hall that will explore what “essential” means to different people, firms, and stakeholders in construction’s lifecycle, what decision-makers need to know, and why it matters so vitally to their businesses as the coronavirus pandemic continues to upend operations, job sites, supply chains, flow of funding, and viability.
This will take place Monday, April 6, at 4:30 pm.
I bring it up because I’ve already been picking up intensifying vibrations among executives–particularly in the lending, borrowing, investment, and investee dynamics. Forbearance, restraint, tolerance, and patience–these tactics need to bind players–those who owe money, those who lend money, those who invest money, those who live hand-to-mouth on today’s money, those who’ve spent tomorrow’s money, and those who can continue to make payments.
“What people need to do at their companies is to be true to their promises right now,” said one executive who spoke on condition of anonymity. “We can’t have everybody at once stop paying their bills right now, and stop abiding by their commitments, or everything will get a whole lot worse.”
We’re hearing about stress, not just on the health and finance front, but to trust.
Margin calls, loan-to-value covenant trips, revolver draw-downs, canceled options, canceled contracts, leading, ultimately, to stop-payments on accounts payable to vendors. A generalized practice of all-out self-preservation can be more damaging for everybody than has currently been accounted for.
Contend as well as you can with the many spinning plates of urgency, and continue to place people, and their health and well-being at the top of the pyramid of priorities right now.
But as you fulfill your custodial duty to shareholders, to lenders, to investors, and to stakeholders at large, in the interest of seeing to the health of your firm, also remember that that store of trust, reputational stature, and social capital that you’ve built up during the good times are all at stake now.
The ultimate two questions for people in the home building, development, investment, manufacturing, and distribution communities is one New Home Company executive chairman Larry Webb reminds us of–whether times are great or horrific as they are now. “Who are you?” and “Who do you want to be?”
Right now, there’s really no, “Us Vs. Them.” It’s us versus Covid-19. We’ll get through that, and on the other side of the pandemic, we have to be able to look one another in the eye.
