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Tag Archives: Food & Beverage

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IMF predicts small business bankruptcies may triple as workers brace for coming months

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California took some people by surprise recently when Gov. Gavin Newsom ordered the largest rollback of reopenings in the country.

Proceeded by Los Angeles moving to online schooling for a large portion of the fall semester and closely followed by individual counties leveling their own, stricter precautions, Newsom’s order was part of a slew of indicators that all said the same message: the coronavirus is not going away.

And as much as the people in California are feeling as though the clock has been rewound to March, small businesses need even less of a reminder of that. With indoor operations largely paused once again, this latest shutdown can have even more dire consequences than the first.

“We had some really great days, and it was like, oh my God, we’re back to some kind of normalcy. Now that’s being taken away from us,” Sarah Kirnon, a restaurant owner in Oakland, said of the latest shutdown.

It is not just an issue isolated to California, either. It is happening all across the country. With breakouts and hot spots popping up with increasing frequency, the IMF came out with a prediction on small and mid-sized businesses that reflected the frantic feeling among business owners. Without any government help, the IMF said, small business bankruptcies may triple by the end of the year.

“Bankruptcies for the firms could surge to 12%, from 4% before the pandemic,” a staff report from the IMF said on July 16.

It may be even worse for the service sector. The same report predicts an “increase of 20 percentage points in administration services, arts, entertainment and recreation.” While no area of the economy will go unaffected, the IMF predicts that essential services will experience the shallowest pitfall.

“More than one third of small businesses in Canada, South Korea, the U.K. and U.S. worry about viability or expect to close permanently within the next year,” the report stated.

For every person and businesses, a prolonged fight against the virus brings on different variations of the same theme. All are trying to survive, but not all have the same issues to face.

Lars Jacobson, a store owner in Idaho, said this second closure could be the proverbial nail in his convenience store’s coffin. His largest problem with a second shutdown will be a closed border with Canada. He said it would take away 90% of his business.

“We’re literally just trying to hold on,” Jacobson said. “Every month has really been devastating to us. We’re still bleeding red every single month. If this fails, it’s going to devastate us.”

A yoga instructor in California might have the most realistic take on the issue, even if it is not popular. Sonya Enchill simply thinks it is time to operate as if the pandemic will never go away. After all, she says, even after everything is open the effects on the economy and the consumer will still linger.

“Things [are not] going back to normal. This is a new era. Everyone is kind of back to the drawing board,” Enchill said.

Other states may not go as far as California in their respective rollbacks. In some capacity, though, the virus will hinder life in the U.S. into the foreseeable future. Small businesses are bracing for it, in all forms and fashions.

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Ready to take the leap to being vegan?

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I became a vegetarian when I was 15. I was inspired by a couple of classmates in high school who shared with me all the reasons they’d given up eating meat — not killing animals, better for the planet, healthier, etc. I decided to join them.

This was in the mid-1970s, decades before Whole Foods came on the scene, making it easier to eat foods that were different from mainstream America. Most “health food stores” at that time were tiny little hole-in-the-wall stores that focused on supplements and not much food. Not very inspiring to a teenager.

I had to work hard to find food I could eat and lived mostly on veggie elbows and cheese. I stuck with it for eight years, and only gave it up because I was tired of the limitations and always having to accommodate a different way of eating.

It wasn’t until many years later in 2012, when I decided to participate in a national challenge to do a 10-day raw cleanse, that I decided again to make a radical dietary shift. I had recently purchased a Vitamix blender, so I was ready to jump in with both feet. The challenge was a great jolt to my system and though I didn’t follow the raw foods diet when the challenge ended, it got me to give up gluten, dairy and meat, essentially becoming a gluten-free vegan. I was pretty strict with it for almost three years until 2015 when I drifted back into eating dairy, chicken and eggs again.

Now, five years later, I’m again moving back into a mostly plant-based diet. Why? It simply makes the most sense for my health, the health of the planet and the well-being of animals.

Though the number of vegans in the U.S. isn’t large — only 3% of people in the United States — the vegan and vegetarian market is expected to be a $5 billion market this year. Obviously, something is changing. I suspect this is due to the increased awareness of the many benefits of not eating meat, eggs, dairy and any food that contains them (some vegans include honey in that list). If you’re thinking about becoming vegan, here are some things to consider:

Benefits of Being Vegan

Nutritional: From a health viewpoint, there is a lot of research showing that eating a plant-based, vegan diet reduces the risk of diabetes and cancer, is better for the heart and helps with weight loss.

Environmental: From the amount of water, land and crops used to sustain animals used for meat production to the amount of methane gas released into the environment by cows and sheep, pollution of rivers and streams, destruction of topsoil and wildlife habitats, etc. required by a meat-based diet, eating vegan makes sense for the environment.

Animal Welfare: According to PETA, every vegan saves 200 animals per year.

Challenges to Being Vegan

Nutritional: Specific nutrients that are typically found in meat and dairy products, including iron, protein, calcium, vitamin B-12, and vitamin D must be carefully integrated into a vegan diet with specific foods and supplements to make sure one doesn’t become deficient.

Social: It can be challenging eating dinner out with friends and family who aren’t vegan or being a guest at someone’s house who is not vegan. This requires planning ahead, and on occasion, bringing along your own food to supplement or replace what is being offered by a restaurant or host. There are raw and vegan restaurants as well as vegan-friendly menus that can be found in more populated areas.

Variety: If you grew up with a traditional meat and potatoes diet, it might be daunting to come up with creative alternatives to your favorite foods. Fortunately, there are lots of meat substitutes out there that actually taste like meat, alternative non-dairy drinks and cheeses, vegan pizzas and so on.

In addition, many recipes have been modified by vegan chefs to provide alternative ways to enjoy familiar foods. They can easily be found with a Google search.

What you eat is a personal choice, though many vegans would argue that a vegan diet has now become a global necessity because the health of our planet and the well-being of the living creatures surrounding us depends on it to survive. Buddhist monk and peace activist, Thích Nhất Hạnh sums it up this way: “By eating meat we share the responsibility of climate change, the destruction of our forests, and the poisoning of our air and water. The simple act of becoming a vegetarian will make a difference in the health of our planet.”

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Why Britain’s small business approach might soon mirror the US’

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By all accounts, Britain was leading the United States in its response to the coronavirus before the past week. The British government thought it had potentially avoided some of the major economic fallouts the U.S. had experienced since much of the world came to a halt in March.

The unemployment rate was hovering at 3.9%. The layoffs and furloughs that have defined the American economy were largely missing from the picture. The government had pledged 160 million pounds (approximately $200 million) to invest in small businesses to keep them from firing workers.

But on July 7, most experts agree that the bubble Britain was operating in might have burst.

Rishi Sunak, the chancellor of the exchequer, publicly shifted the standard line government officials have been trotting out. He announced part of the relief package for small businesses would be allocated to “work coaches” in order to help with those who become unemployed. He also admitted that saving every job was an impossibility.

“If you’re asking me can I protect every single job, of course the answer is no,” Sunak told the BBC on July 9. “Is unemployment going to rise, are people going to lose their jobs? Yes, and the scale of this is significant. We are entering one of the most severe recessions this country has ever seen.”

To add to the fuel, the government also announced it would be weaning off its extensive furlough plan and would instead be encouraging businesses to open up again.

While many experts believe Sunak was being realistic, it doesn’t mean the economic fallout was dampened by his honesty. The announcements of mass layoffs began almost immediately. Britain’s largest pharmacy chain announced it would be cutting 5,000 jobs just hours after Sunak’s announcement.

“It doesn’t motivate employers to wait and see over the next couple of months,” Rory MacQueen, an economist at the National Institute of Economic and Social Research, said. “This motivates them to make a snap decision early.”

The projections have now placed Britain on a path similar to the United States in terms of responding to the economic pitfalls stemming from the coronavirus. The executive of Burger King UK estimated that 5 to 10% of restaurants in the country would not survive. That, in it of itself, would mean thousands of jobs lost.

“Our fear is that the summer jobs loss tsunami we have been pleading with the government to avoid will now surely only gather pace,” Len McCluskey, an economic expert in Britain, said. “This was a statement by a chancellor preparing for mass unemployment.”

The United States has seen millions of lost jobs. The hardest hit sector of the economy, just like in Britain, is low income jobs. Twenty-nine percent of all jobs lost in the U.S. come from low-income jobs. It all puts the U.S. and Britain on similar footing.

For the first four months of the virus’ impact in North America and Europe, economists believed that the two countries would show the tale of two sides. Originally it was thought that Britain would demonstrate the effects on the economy when enacting nationwide stay-at-home orders and a robust economic relief package. The U.S. would illustrate the opposite.

But now, as many states roll back on reopening measures and Congress weighs extending relief packages, the script is flipped. Britain is now the one urging people to come back to work. Over the next four months, it will be again an opportunity for economists to wait and watch two countries that are closer together in their response than most originally thought.

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Food and beverage: The only sector to grow in 2020 — and possibly beyond

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A recent Euromonitor report states that the COVID-19 pandemic has changed consumer buying behavior drastically. As a result, food and beverage is the only sector projected to see robust growth this year.

Retail analysts show that while global spending will fall by 4.3% this year, the food and beverage industry will grow at just above 2%. Though that is less than the growth figure in 2019, considering the unstable times we are, it is good news. Analysts have stated that there will be a 3.7% decline in total disposable income and spending due to the global recession caused by the pandemic.

Euromonitor also predicts that consumer choices may change permanently. Its predictions are based on lifestyle trends that came out of the pandemic. Economic depression, stress, anxiety, uncertainty about the future, and less money on hand all lead to a shift in buying patterns.

At the start of the stay-at-home orders and widespread quarantines, we saw consumers stockpiling food and beverages. As the pandemic spread, hygiene, physical health, and mental well-being became top priorities on every mind. Since food and beverage has a direct correlation with all these and can meet most of these personal needs, the industry has grown considerably during this time.

Even within the industry, there has been a shift in growth. Organic food and fresh produce, both related to healthy living, have soared in sales. Canned foods, which recently saw declining sales, saw an increase in segment sales during the coronavirus pandemic.

With many restaurants closed for in-person dining and offering only takeout and delivery, home cooking has taken on a whole new meaning for people, a trend that experts say will continue. Then there is the latent fear of the virus that hasn’t abated, and some states are witnessing spikes after the lifting lockdowns. Compared to these risks, home cooking will always be safer, healthier, and cheaper.

Healthy, high-quality products that offer good value will drive market growth. Clean and sustainable products will find more fans, so companies must keep innovating to ensure that they meet the new consumer demands.

The food automation market is witnessing disruption, too. Food processing industries have kept operating as essential businesses, which has generated demand for the automation market. Demand for pharmaceuticals; food and beverages; and sanitation and cleaning supplies during this pandemic has helped avert a steep decline in sales as happened in the last major recession. The massive demand for products in these categories has necessitated a faster adoption of food automation technologies.

Post-quarantine behavior will continue to generate orders in these sectors. Analysts state that the majority of industries, including food and beverage industries, are looking to adopt robots and automated processes as a huge part of the future.

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Small businesses rush for technological answers, advances during pandemic

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When Victoria Petrock heard about the CARES Act, which funded technology upgrades for businesses in the United States as part of a $2 trillion stimulus package, she had a simple reaction.

“This is going to accelerate it,” Petrock said, a principal analyst at a data and analysis company eMarketer.

What she was referring to, back in March, was the tech overhaul for small businesses across the country. Now, on the brink of July, Petrock could never have predicted the extent of the global pandemic. Or, as it turns out, the faster adaptation to technology than even she saw coming.

The coronavirus has upended the way small businesses operate for months. One of the longest-lasting impacts of the virus, though, will be how fast and how many small businesses have been forced into investing into technology. With contactless pickup, new payment methods, and cleaning services all far more important than they were at the start of the year, a common denominator in every industry is the need for innovation.

In local hospitals and traditionally high-contact industries, cleaning technology such as robots have thrust themselves into a previously unoccupied space in the market.

But it is not just medical industries that are doing this. Mass transit lines, as they slowly open, have gone to more thorough and efficient cleaning methods. The Metropolitan Transportation Authority in New York City, the transit authority many other transportation agencies look to for guidance, recently started using Puro UV lamps at night.

For other small businesses, there have been different technologies as the solution. Electronic payment methods have become standard.

“Overnight, doing business in person was not really an option anymore, so everyone scrambled to get online,” said David Rusenko, head of e-commerce at mobile payments company Square. “We saw a three-year adoption cycle get compressed to three weeks.”

The United States Chamber of Commerce estimates that one in every five small businesses have been forced to close their physical space across the nation. That certainty contributes to why the cycle has been accelerated. Another reason, according to Rusenko, was the opportunity for instant growth.

Most businesses that are rushing for technology did not previously have a robust online presence or options for consumers to purchase items online. The pandemic now presents a chance to create another revenue stream that businesses like wine stores, bookstores and other sectors never had.

“We saw a lot of people get online in two days, three days,” Rusenko said. “Now that some areas are reopening, they’re actually able to manage both.”

Other technological investments that are uniquely tailored for this moment include robots that work for contactless pickup. Boston Dynamics created a “robotic dog” that can run errands without any risk of human contact. The added bonus, according to the company, is that the “dog” can also monitor those adhering to social distancing.

“The robot, which has sensors and a 360-degree camera, (can be) steered around (a) park remotely and uses its built-in speaker to play a recorded message when it comes across people defying social-distancing rules,” the company said.

Some companies acknowledged technology is harder to come by in some industries compared others. But all of them, eventually, will need to make the turn. The customer base, as online grocery store manager Joseph Boo said, will also have to adjust with the companies. He concluded, though, it is just a product of the times.

“For the older generation, they want to feel the veggies before they buy it. They need it to talk to them and say ‘I’m the one,’” Boo said. “This 100 percent would not have happened if the pandemic hadn’t happened.”

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US employers add 4.8 million jobs in June; jobless rate drops to 11.1%

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Employers added 4.8 million nonfarm jobs in June after hiring 2.5 million workers in May, according to the federal Bureau of Labor Statistics. June’s unemployment rate fell to 11.1% versus May’s 13.3%.

Improvement in the labor market for the second straight month was due to a partial resuming of economic activity after nationwide business closures, notably in the hospitality and leisure sectors in March and April, to slow the transmission of the COVID-19 pandemic. That shutdown led to the loss of 22.2 million jobs.

Most major worker groups saw unemployment rates decline in June. That continued the trend of firms hiring in May.

Elsewhere in the economy, June’s employment data showed mixed results. “The number of unemployed persons who were on temporary layoff decreased by 4.8 million in June to 10.6 million,” according to the BLS, “following a decline of 2.7 million in May. The number of permanent job losers continued to rise, increasing by 588,000 to 2.9 million in June.”

In June, all private nonfarm workers’ average hourly earnings dropped by 35 cents to $29.37 versus May’s decline of 29 cents to $29.75, according to the BLS. For all workers on nonfarm payrolls, June’s workweek hours fell by 0.2 of an hour to 34.5 hours versus May’s rise of 0.5 of an hour to 34.7 hours.

Small firms of 1-49 workers led the way in hiring, gaining 937,000 jobs in June after losing 435,000 in May, according to ADP/Moody’s monthly employment report, which counts nonfarm private-sector payrolls exclusively. Large firms of 500 or more workers added 873,000 workers in June versus May layoffs of 1.6 million employees. Midsize firms of 50-499 workers hired 559,000 new workers in June after shedding 722,000 jobs in May.

Goods-making firms gained 457,000 new workers in June following 794,000 layoffs in May. In the service sector, employers hired 1.9 million workers in June compared with May’s job losses of 1.97 million. Leisure and hospitality employers, which bore the brunt of coronavirus business closures, added 961,000 workers after 105,000 employees were let go in May.

Ahu Yildirmaz is the co-head of the ADP Research Institute. “In fact, 70 percent of the jobs added this month were in the leisure and hospitality, trade and construction industries,” she said in a statement. Some states that began reopening businesses in May and June, however, have seen surges in the pandemic and are reversing course. That will affect employment negatively moving forward.

Closely watched economic forecasts from the Congressional Budget Office released before the July 4 weekend will estimate future growth and the jobless rate.

The $600 weekly pandemic jobless benefit to standard unemployment insurance benefits will cease on July 25. “The ending will come at a huge economic cost to workers, their families, and the recovery,” according to Elise Gould, a senior economist at the Economic Policy Institute in Washington, D.C.

In addition, a deficit of federal help for cash-strapped state and local governments will slow an economic recovery. States and municipal governments are unable to run budget deficits. The federal government can and does run such deficits.

In June 30 testimony before the House Committee on Financial Services, Jerome Powell, head of the nation’s central bank, sounded a cautious note. “The path forward for the economy is extraordinarily uncertain and will depend in large part on our success in containing the virus. A full recovery is unlikely until people are confident that it is safe to reengage in a broad range of activities.”

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Restaurants need creative solutions to social distancing

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Restaurants have been hit extremely hard by the COVID-19 pandemic. As states started crawling back to reopening, a second, more infectious wave has hit most parts of the country.

Many states are dreading a second shutdown and wonder if their restaurants will survive at all this time around. America recorded a staggering number of unemployment filings in March and April, but as the lockdown eased in June, 4.8 million went back. Out of those, 30% of the jobs were from bars and restaurants.

As the pandemic evolved, eateries around the country began to think of new ways to serve their patrons. First, they started curbside pickup, registering with delivery apps to survive. Most had to overhaul their ordering system to accommodate the takeout business.

As the lockdowns eased, some set up a temporary dining spaces for an outdoor dining that were socially distanced and did not crowd sidewalks. In places like Clinton, New York, the community came up with common outdoor dining spaces in parking lots, with tables placed 6 feet apart.

All businesses in the category, such as culinary schools, wineries, restaurants, bars, and food tour companies, are getting creative in the new dining and traveling era. Those that cater to out-of-towners like distilleries and breweries face even harder challenges.

Distilleries, breweries, and wineries are trying to rethink their tasting-room experience. Outdoor seating and reservations-only rules will allow them to utilize outdoor space for a “touchless” experience.

Most are moving operations outdoors with social distancing rules, and groups are limited to between three and six people. Some are offering new tasting packages that include paired “provisions” boxes. Payment is prepaid and online, and guests are encouraged to wear masks and prepare to dine with a low-contact experience.

Tours, however, remain a problem. Distilleries want to protect their workers because the tours are generally up close and personal and may not be worth the risk. Some larger distilleries plan on reducing tour size, while others are suspending tours.

Cooking schools have taken a big hit with the lockdown. The ones that could shift to online classes, however, have seen their students’ reach expand globally.

Culinary-tour businesses are focusing on a private basis to start, with adjustments made to avoid restaurants at peak times and keep everyone outside as much as possible. But this fragmented reopening may not be worth the effort for all business owners.

In normal circumstances, food tour businesses would take groups of 10 or so people through roughly five or six establishments through a designated path, making scheduled stops. But since the shutdown, these businesses have suffered and have had to adapt in different ways.

Across the Atlantic, Bar Douro in London faced COVID-19 by diversifying. During the lockdown, it focused on developing an online wine retail division instead of liquidating.

Big names like Eataly currently rely on backup plans based on their European operations’ insights on how to keep stores open with increased sanitary and safety measures along with social distancing.

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Federal agency sets final rule on truckers’ hours of service

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Truck driving is known as one of the world’s most dangerous professions.

Yet, drivers of large, heavy trucks must regularly meet tight deadlines set by shippers and receivers to deliver goods to warehouses and other customers on time, and fatigue can make truckers’ jobs both difficult and risky. In fact, according to a federal study by the National Highway Traffic Safety Administration, 13% of commercial motor vehicle drivers experienced fatigue at the time of their crash on the road.

To help keep fatigued and drowsy drivers of commercial motor vehicles off the road, the Federal Motor Carrier Safety Administration (FMCSA) sets hours of service (HOS) regulations for truck drivers. HOS rules control when truckers can drive each day, the maximum number of hours they can drive in a day and when they have to take breaks.

But this spring, the FMCSA presented its final rule on updates to the HOS rules to give drivers more flexibility in the regulation regarding when and how long they can take breaks.

“America’s truckers are doing a heroic job keeping our supply chains open during this unprecedented time and these rules will provide them greater flexibility to keep America moving,” U.S. Transportation Secretary Elaine L. Chao said in a statement.

The FMCSA’s final rule includes adding two hours to truckers’ allowable on-duty time, from 12 hours to 14 hours, and bumps up the number of miles drivers can travel in a day from 100 air miles to 150.

The final rule also gives drivers more flexibility over their required break times. Drivers are currently required to take a 30-minute break after eight consecutive hours of driving. But under the new rule, they will be allowed to perform other on-duty tasks that don’t involve driving during their half-hour break.

Moreover, drivers will also have greater control over their free time. The updated rulewill let drivers split their 10 hours of required off-duty time into an eight- and two-hour split or a seven- and three-hour split without it counting against the 14 hours of driving time allowed in a day.

Another modification has to do with how truckers manage under adverse driving conditions, which can include unexpected inclement weather conditions like fog, icy roads, or a heavy snowfall or a road shutdown due to a traffic accident. The FMCSA’s modernized rule will let truckers who experience such adverse conditions drive two hours more than the maximum hours allowed under normal driving conditions.

The rule change comes after the FMCSA first issued a notice of proposed rulemaking in 2018 to receive public comments. The agency later reported receiving more than 2,800 public comments.

The FMCSA says that by allowing more flexibility in the HOS for the trucking industry, the changes will produce a cost savings of $274 million for the U.S. economy and for consumers. The FMCSA reports that trucking industry in the United States employs some seven million people.

The industry, including groups like the American Trucking Associations, the largest national trade association for the trucking industry, and the Owner-Operator Independent Drivers Association (OOIDA), have supported the FMCSA’s proposed rule change. The OOIDA, in fact, called for changes to the rules in 2018 during the comment period.

In a 2019 statement, Todd Spencer, president of the OOIDA, said, “Truck drivers know better than anyone when they should take a break or when road conditions are too dangerous. They ask for flexibility not only for themselves, but also for the safety of all highway users.

“For too long we’ve allowed people that have never spent time in a truck to dictate a driver’s daily schedule,” Spencer said. “This has to stop.”

The final rule will go into effect 120 days after publication in the Federal Register.

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As humans search for higher agricultural yields, their waste may flush a stinky situation

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It’s a subject none of us care to discuss even though it’s part of our daily lives: human waste. This basic product of human existence has, for thousands of years, been little more than waste to be managed or done away with.

Nevertheless, human waste, like its bovine counterpart, may be exceedingly valuable for sustainable agricultural purposes. So says science.

Researchers from Cornell University’s College of Agriculture and Life Sciences and the Canadian Light Source at the University of Saskatchewan may have discovered it’s possible to create nitrogen-rich fertilizer by combining the solid and liquid components of human waste.

Published in the journal Sustainable Chemistry and Engineering, our waste may increase crop yields in developing countries and reduce contamination of groundwater caused by nitrogen runoff. Nitrogen is part of chemical fertilizers.

Such “fertilizer” could help farmers produce higher yields with less ground, or the same ground currently used without the need for additional deforestation, for example.

The discovery came to fruition when researchers, determined to find a sustainable way to include nitrogen in the human solid waste, recycled the nitrogen in the urine and adding it to the solid waste. Before this, urine was lost to runoff, and the solid waste on its own lack the key nutrient.

The researchers heated the solid component of human waste in the absence of oxygen to produce a pathogen-free charcoal called biochar. Next, they manipulated the biochar’s surface by priming it with CO2, enabling it to soak up ammonia, the nitrogen-rich gas given off by urine. By repeating the process, they loaded up the biochar with additional nitrogen, resulting in a solid material rich in nitrogen.

Previous research engineered high-tech adsorbers, but the researchers in this case wanted a low-tech approach. Adsorbers are materials whose surfaces can capture and hold gas or liquids.

The research team showed it is possible to make fertilizer from human waste, but more must still be done; primarily, how will this human-powered fertilizer compare to existing commercial nitrogen fertilizers for different crops and soils? And can a cost-effective solution be delivered to perform this process automatically in a real-world setting?

Such a solution could radically alter the face of farming in developing countries. This is particularly important because, as the world’s population soars, findings by the University of Maryland — released by Global Forest Watch — suggest through satellite and online forest monitoring that 2019 was the third highest year for losses of tropical primary forest since the turn of the century.

Among the most significant areas of loss include Brazil, the Democratic Republic of Congo, and Bolivia. Agriculture primarily to blame in all three countries.

If human waste can reasonably be made into fertilizer fit for agricultural use, the crappy business of clear-cutting forests to increase arable land to increase yields may help turn a stinky situation onto one that’s a little rosier.

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Why your company’s culture matters — especially in the throes of COVID-19

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I asked a group of company leaders what the most important factor is in their company’s success. Without hesitation and unanimously, they answered: culture. I followed that question with another question, “If culture is the most important ingredient to success, what have you done to define, develop, and disseminate your culture so it becomes part of the organizational DNA?”

One leader responded by saying, “We are just lucky that we attract great employees.” Another said, “My team just knows how to treat each other, and our strong culture is simply organic.” I then asked: “If you were interviewing a salesperson and you asked what the most important component of their success was, and they said, ‘People just gravitate to me and I guess it’s just natural and organic’… Would you hire them?”

With the outbreak of COVID-19, organizational culture was tested with a rapid change from working together on site to working at home. Companies with a strong, intentional culture were able to swiftly implement work-from-home practices since their culture was stronger than the process. On the other hand, organizations with a weak culture struggled with employee productivity and motivation when the surrounding environment changed.

In truth, cultureis the most important ingredient to success and your company cannot realize its potential without having an intentionally designed, foundational culture. Here are some tips for developing a culture that connects, motivates, challenges, and aligns organizations:

Shift from Vision to Cause.

In his book “Culture Trumps Everything,” Dr. Gustavo Grodnitsky says people work harder for a cause than for cash. Working for a cause is much more stimulating than working for the CEO’s vision. The millennials are focused on working for a cause and when they hear the word vision, they think of some old school platitude that originated several decades ago. They rarely interpret the organization’s vision as something they want to spend most of their waking time pursuing.

When I take companies through the Culture Component of The Blendification® System, we develop a clear Statement of Cause. The Statement of Cause highlights a future based on the organization’s societal impact. Companies with a strong Statement of Cause that becomes embedded in the organization’s DNA use this as motivation when they are faced with challenges.

When COVID-19 struck, companies with a strong Statement of Cause simply kept their focus on their impact. The pandemic temporarily disrupted their short-term actions; it did not change their cause.

Build a Statement of Intention for Employees, Customers, and Communities.

Most vision and mission statements are dreams evolving from books written in the 1990s. They are either focused on world dominance or some level of profit and shareholder value maximization. Millennials do not trust these statements. There is typically no mention of the company’s impact the company on its three main stakeholders: employees, customers, and communities.

A Statement of Intention creates a commitment to these three groups. Intention creates a level of accountability to real groups of people. Companies that build a solid Statement of Intention outline what they are committed to as it relates to the employees from a growth and development perspective, their customers from a product and service perspective, and their communities from an impact perspective.

While the Statement of Intention is not a goal, there is inherent accountability as the company states what its true intention is for these key stakeholders. This commitment evolves from and aligns with the Statement of Cause. This second step in intentionally defining and designing your culture also aligns and motivates the employees as there is a clear connection to the groups they care about most.

Establish Desired Behaviors and Habits.

At the core of culture is behaviors and habits. Since that is the foundation of culture, then why don’t we build culture based on the desired behaviors and habits? Companies that are truly serious about their culture and its connection to success record the specific behaviors and habits they want to see active inside company meetings, employee communication and support, customer interactions, community engagement, and more.

Make Culture Part of Routines.

Once the desired culture is designed following the three steps above, you still haven’t created a culture. For your defined culture to become part of your active culture, you have to disseminate it through daily routines. Many companies do daily lineups, but most of these are either sales or task-based meetings.

The Ritz-Carlton organization does a daily lineup solely focused on culture and how employees interact with each other and guests. The company’s motto is, “We are Ladies and Gentlemen serving Ladies and Gentlemen.” Each day, every Ritz-Carlton employee meets with coworkers and shares a specific example that relates to their internal and external service excellence. When organizations take culture seriously, they will make it part of their routines.

Culture has always been the most important factor in determining organizational success. While leaders have known this, there hasn’t been a systematic process to define, develop, and disseminate a desired culture as outlined above. Culture mostly receives lip service, but it needs to be reinforced by having a strong Statement of Cause, Statement of Intention, and corresponding Behaviors and Habits.

This became more obvious when COVID-19 forced people to shift from working in an office to home. With the exception of technology modifications, companies with a defined culture that was part of the operational DNA were successful in responding quickly and seamlessly transitioned to a different work structure.

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