In July 2021, the impact of the pandemic still has places like Singapore, Argentina, Brazil, and Australia in tight lockdown. However, many other countries are starting to emerge to the new reality of operating without pandemic protocols. At the recent Fortune Global Forum, CEOs of many of the world’s biggest companies spoke about their companies in a post-Covid world. This blog post is number two in a three-part series in which a summary of what they said will be shared.
Michael Wirth, Chevron. The pandemic reinforced the need to always be prepared. Like many energy companies, Chevron had a pandemic response plan on the shelf, and the company was prepared to keep people in operations through unexpected events like Covid. Chevron’s plan and execution were a success. Moreover, the plan called for a downcycle in its balance sheet (which was realized in some places), proving to Chevron that preparation matters. People throughout the company learned the need to adapt, and Chevron sees where the fuel demands are recovering and not recovering as expected. This reality reminds the company that staying malleable is key: how does Chevron best respond to those demands and what does that provide for the everyday business?
In the short term, things are shaping up well in Chevron’s view, and it will continue to pay attention to the underlying fundamentals of the diversification of the energy system. As anyone who works in oil will tell you, everyone is bad at guessing oil prices. Instead, Chevron looks out into the future around consumer demand and sees how that impacts the need for oil in a variety of forms.
While much of the world’s focus went to health and protecting families and societies from Covid, the interest in and passion for smart environmental policy and approach did not change. For every 42 gallons of oil in a barrel, just ten go to automobiles. So much more goes to other industries in transportation like aviation and shipping. Even with the expected dramatic rise in electric vehicles, Chevron expects growing demand for a barrel of oil from all areas. The key concern is how to lower carbon emissions no matter where that oil is used.
Making these choices is not something that should be taken lightly, and Chevron heeds this approach. The company listens keenly to the things consumers say they want, as well as considers the demands some interest groups make. Yet, all business people know there is what people say they will buy and then what people actually go out and pay for. Chevron works to stay mindful of this distinction, pays close attention, and responds to the needs which are truly in demand in the marketplace. It learned this lesson many times in the past, such as when it offered methanal and hydrogen, but consumer demand did not come to fruition. As a company, Wirth says it is important to lean into these expressions of interest from stakeholders; yet, do it with eyes wide open to scope out what is the durable demand and the viable economic proposition.
David Taylor, Proctor & Gamble. P&G faired the pandemic well, realizing a share price that rose $15 from its five-year high point when Covid started. Its CEO said that at the heart of the company’s success was the level of agility and resilience the people of P&G showed. What stay true and did not change was P&G’s care and concern for consumers. What had to change, though, was how P&G cared for its employees in ways that the company never had to consider. It brought forth a new way of working in the company.
Fundamentally, P&G’s quick recovery in the emerging markets came from being agile. A part of this was the company increasing its engagement with consumers through the pandemic. P&G dealt with volumes of quantitative and qualitative data at levels never seen in the company. The pandemic had P&G rethink things, such as how to step into the shoes of a consumer when physically going into people’s homes was not an option. Technologies similar to Facetime were the answer, and through seeing the world of its consumer differently, it was able to elevate its care for the consumer to a new whole level.
P&G has seen how consumers have changed via Covid, as they bought so many more products in the areas of health, hygiene, and home cleaning. Given the pandemic, this is not unexpected, as taking care of self and family is a very human response. What emerged, though, was something new: living, learning, and working in the same space. The home is now truly the center of people’s lives.
For CPG companies like P&G and S.C. Johnson, which have extraordinarily well-known and deeply trusted brands, the pandemic was a boon. People bought brands that they trusted and which they knew they could count on. Taylor believes that branded goods will likely do well post-Covid vs. the pull for private label offerings. He asserts that consumers are learning what they can rely on and staying true to the brands that meet their needs.