The application of “regenerative” business practices in the midst of an economic crisis might be expected to be one of the short-term casualties we see all around us. The first, and most immediate, example of this tendency is the immense numbers of employees in a wide range of public-facing roles who were laid off within a week of “shelter in place” in major cities. At the same time, crucially, companies facing virtually unprecedented demand such as CVS increased pay for their employees, arguing that these workers deserved what amounts to “extreme hazard” pay. And, in an equally unprecedented manner, we’re seeing the use of social media in communities around the country to raise funds to provide direct payments to laid-off employees of local service firms, supplementing unemployment compensation for workers who don’t qualify for it.
Widely-differing responses to the situation can be seen in the governmental response as well. On the one hand, agencies such as the EPA (not a favorite of the current Administration under the best of circumstances) relaxed air pollution regulations, which can’t in any way be seen as a sustainable, much less regenerative, approach, since it’s at the expense of the environment we all live in. On the other hand, the Congress and Executive secured over $2 trillion to, among other things, send checks to tens of millions of people to keep them afloat. This action should be appreciated as an unprecedented exercise in, at minimum, social “sustainability,” and perhaps, “crisis socialism.” This “crisis socialism” is also being applied in many states, such as New York, where the state government is mandating collaboration among previously-competing hospitals and other healthcare industry players. While some commentators and authorities have raised a trial balloon arguing that at-risk citizens should risk their lives so the economy can stay up-and-running, the overwhelming consensus appears to be for a “we’re all in this together” approach, making heroes out of healthy delivery workers, first responders, and hospital employees.
What are we to make of this teeter-totter approach to “stakeholder" needs? And what can this tell us about the likely trajectory of ideas around a more regenerative approach as the crisis eventually recedes?
One clear implication is that, politically speaking, the idea of regenerativity has strongly taken root in some surprising places, at least as being seen by the broad public as a legitimate response to systemic crisis. Something clearly changed. We would argue that it was the spreading of the idea of “equity” before the crisis, in which everyone benefits not only from prosperity but from the financial tools available during a crisis as well. Something less in evidence in the 2008 financial crisis than now.
The other is that businesses with deep pockets may be increasingly held to “regenerative” standards moving forward, even if the word isn’t used. No one can really blame a small business, which normally serves its community in a clear, obvious, dare we say “sustainable” manner, laying off its staff when business has cratered. But larger companies, from the airlines to the auto companies, are under pressure to not simply put stockholders first, but to contribute in a meaningful way to the enhancement of the entire ecosystem within which their businesses operate. And if this recognition is happening in the midst of a crisis, would it be entirely unexpected if people in that ecosystem expect these players to consider the bigger network that sustains them when times improve?
Recessions are often lauded by economists for dispatching weaker, less competitive businesses. This one will be no different. What may be a bit different is the possibility that this crisis will finish off the idea that smart companies should serve shareholder needs alone. It may well be eclipsed by the realization that the broader ecosystems companies depend on to thrive– the employees, communities, associated organizations and natural systems– also requires those companies’ support and commitment in bad times- and good.