Speech by Jean-Claude Trichet, President of the ECB
on receiving the Karlspreis 2011
Each generation needs to affirm its commitment to Europe.
For the generation that lived through the Second World War, Europe was essential to prevent a return to the depression and the horrors of that war.
For the generation after, Europe was the cornerstone of building prosperity through economic freedom and open markets.
For the current generation, these achievements are taken for granted. Citizens have new concerns.
They want to be told why European unity is more important than ever in the present globalised world to ensure peace and security; why the European Union is vital to ensure and promote the interests of the European nations; why the European economies and societies are much more interdependent today than immediately after World War II; and how these interests and this interdependence should be best governed.
In all domains this calls for continuing to strengthen Europe’s institutional framework. In the economic and financial fields it demands to reinforce in a decisive way the institutions of the economic and monetary union.
By institutions, I do not mean technocrats making complex decisions remote from citizens.
I mean the rules and organisations that preserve our core values and guide our actions towards the common good.
Institutions that build trust between peoples and nations in Europe.
Institutions that foster cooperation for mutual benefit.
Institutions that manage our interdependence by preparing collective decisions.
As Jean Monnet put it, “Nothing is possible without men and women, but nothing is lasting without institutions.”
We are privileged in Europe to have institutions that contribute to binding together our continent, that embody the values of the European project and carry it further.
The European Commission, led by Mr. Barroso, is at the heart of this process. The European Council, led by Mr. Van Rompuy, gives it direction and momentum from the highest level. In the domain of Economic and Monetary Union, the Eurogroup, led by Mr. Juncker, drives forward its agenda and confronts its challenges.
In keeping with the vision of the Karlspreis, I will focus my remarks today on how developing further our common institutions is the key to the next stage of European economic and financial integration.
My main message is that the achievements of economic and monetary union (EMU) to date have been made possible by the ECB and the Eurosystem, the strong institutions of monetary union – the M in EMU. In the same vein, confronting the challenges of the future requires strengthening the institutions of economic union – the E in EMU.
Economic and Monetary Union
EMU is the area where Europe has progressed furthest.
It is a union where sovereign nations share a single market, a single economy and a single currency. Where they bind their actions through common laws and institutions. Where they remain unified and diverse at the same time.
This unique arrangement fulfils the visions of centuries of great European thinkers.
… of Erasmus in the 16th century, who spelled out the moral limitations of a strict concept of nationhood
… of William Penn in the 17th century, who recognised that European nations could mutually benefit by creating common institutions
… of Immanuel Kant in the 18th century, who understood that the authority of such institutions had to rest on common laws
… of Victor Hugo in the 19th century, who realised that democratic participation was necessary to provide these laws with legitimacy
… and of Robert Schuman in the 20th century, who saw that the foundation of all of the above would be economic integration.
It is important to keep in mind this historical perspective, seeing beyond the current challenges in the euro area. EMU is itself an unprecedented achievement in the history of sovereign nations – a goal to which generations of Europeans have aspired.
EMU is a historical process designed to bring real economic benefits for Europe’s citizens. We should not overlook what has been achieved in this area.
EMU has brought growth. Over the first decade of the euro, GDP growth per person has been of the same order of magnitude as in the United States.
EMU has fostered trade. Not only inside the Euro area (+50% increase in trade volumes over the first years of the euro), but even more so with the European Union as a whole and the rest of the world (+80% over the same period). EMU is not a closed shop. On the contrary, it is the most open of the large economies in the world.
EMU has brought employment. Employment has increased by 14 million since the creation of the euro, compared with a rise of about 8 million in the United States.
EMU has brought price stability. The average yearly inflation rate in the euro area during its first 12 years was 1.97%. That is fully in line with our definition of price stability at the European Central Bank (ECB): an inflation rate below but close to 2% over the medium term.
And EMU has brought monetary stability. The euro is a solid and credible currency, trusted by our fellow citizens, investors and savers.
There is no “crisis of the euro”.
The ECB and the euro
In 2002, the Karlspreis Foundation awarded the prize to the euro. The Foundation stressed how the euro was the logical step to maximise the benefits of the single market for sustainable growth and job creation.
On the evidence accumulated in the first twelve and a half years, the ECB has delivered on this promise.
The Treaty has mandated the ECB to keep safe the money of Europe’s citizens. And it has given the ECB the capability and the full independence to perform this task effectively.
These two aspects are akin to Max Weber’s ethics of conviction and responsibility. Our mandate gives us our conviction. Determined action reflects our responsibility.
In the difficult circumstances afflicting all the advanced economies since the start of the crisis in 2007, the ECB Governing Council demonstrated both conviction and responsibility.
We have shown conviction in steadfast commitment to price stability. Before and during the crisis, all our decisions on interest rates – we call them “standard decisions” – have been designed in order to give our fellow citizens price stability over the medium term.
And, as I just said, over the first twelve years we have delivered average yearly inflation at the level of less than 2%: it is a better result than the previous national currencies over the last 50 years, including the Deutsche Mark. Here in Aachen, I can say, the promise “stark wie die Mark” has been fully respected.
Since the crisis we also had to cope with financial turbulences, abnormal functioning of markets and disruption of certain segments of markets.
We showed our responsibility in taking monetary policy measures – we call them “non standard” decisions, strictly separated from the “standard” decisions, and aimed at restoring a better transmission of our monetary policy in these abnormal market conditions.
All these “non standard” measures – whether exceptional refinancing with full allotment and longer duration, or the interventions in private or public securities markets – have been designed to be commensurate to the tensions observed on these markets and allow a better transmission of our interest rates decisions.
In demonstrating both conviction and responsibility, the ECB has been, during the last four years, a reliable and solid anchor of stability to the service of our fellow citizens in the worst economic and financial circumstances since World War II.
Had we not been able to present a solid anchor of stability and confidence, the recovery the euro area has experienced since May 2010 would probably have been very different. The increase in GDP of over 2.5% in the past 12 months would not have happened. The increase in employment by 350,000 jobs since then might not have been there.
In deciding on all our measures, standard and non-standard, we have the needle in the compass on our primary objective: price stability for the 331 million fellow citizens of the euro area.
I wish to underline that achievements of the last 12 years have only been possible thanks to the remarkable dedication and expertise of the ECB Executive Board and Governing Council, to whom Europe today, through the Karspreis, is expressing its gratitude.
The same gratitude goes to the 1,400 staff members at the ECB in Frankfurt. They come from all 27 countries of the EU. They are a shining example of professionalism and team spirit, of what it means to work together for Europe.
Current challenges for governance
Just as the success of the euro as a currency is due to well-designed institutions, addressing EMU’s difficulties requires a major strengthening of the rules and organisations that govern fiscal and economic policies.
Looking at the euro area today, we see clearly that countries that abide by the rules of the single currency can thrive and prosper. Sound policies and a healthy economy are strongly correlated.
But we also see the opposite. Countries that have not lived up to the letter or the spirit of the rules have experienced difficulties. Via contagion, these difficulties have affected other countries in EMU.
Strengthening the rules to prevent unsound policies is therefore an urgent priority. It is the means to allow all countries to reap the full benefits of the single currency. And it prohibits individual countries from pursuing policies that harm themselves and the euro area as a whole.
For this reason, I have called, in the name of the Governing Council, on the Commission, the Council and the European Parliament to be very ambitious in reinforcing economic governance in the euro area. We have called for a “quantum leap” in governance now, to draw all the immediate lessons from the first years of Economic union and from the weaknesses revealed by the global crisis.
I count particularly on the European Parliament to reinforce the draft secondary legislation that is presently examined in the “trialogue” between the Parliament, the Commission and the Council.
Which possible changes of governance could be envisaged in the medium term?
In the aftermath of the global financial crisis, we face the challenge of supporting countries that experience financial difficulties.
Arrangements are currently in place, involving financial assistance under strict conditions, fully in line with the IMF policy. I am aware that some observers have concerns about where this leads. The line between regional solidarity and individual responsibility could become blurred if the conditionality is not rigorously complied with.
In my view, it could be appropriate to foresee for the medium term two stages for countries in difficulty. This would naturally demand a change of the Treaty.
As a first stage, it is justified to provide financial assistance in the context of a strong adjustment programme. It is appropriate to give countries an opportunity to put the situation right themselves and to restore stability.
At the same time, such assistance is in the interests of the euro area as a whole, as it prevents crises spreading in a way that could cause harm to other countries.
It is of paramount importance that adjustment occurs; that countries – governments and opposition – unite behind the effort; and that contributing countries survey with great care the implementation of the programme.
But if a country is still not delivering, I think all would agree that the second stage has to be different.
Would it go too far if we envisaged, at this second stage, giving euro area authorities a much deeper and authoritative say in the formation of the country’s economic policies if these go harmfully astray? A direct influence, well over and above the reinforced surveillance that is presently envisaged?
The rationale for this approach would be to find a balance between the independence of countries and the interdependence of their actions, especially in exceptional circumstances.
We can see before our eyes that membership of the EU, and even more so of EMU, introduces a new understanding in the way sovereignty is exerted. Interdependence means that countries de facto do not have complete internal authority. They can experience crises caused entirely by the unsound economic policies of others.
With a new concept of a second stage, we would change drastically the present governance based upon the dialectics of surveillance, recommendations and sanctions.
In the present concept, all the decisions remain in the hands of the country concerned, even if the recommendations are not applied, and even if this attitude triggers major difficulties for other member countries.
In the new concept, it would be not only possible, but in some cases compulsory, in a second stage for the European authorities – namely the Council on the basis of a proposal by the Commission, in liaison with the ECB – to take themselves decisions applicable in the economy concerned.
One way this could be imagined is for European authorities to have the right to veto some national economic policy decisions. The remit could include in particular major fiscal spending items and elements essential for the country’s competitiveness.
Which possible changes of governance in the historical long term?
Looking much further ahead, we should wonder what will be the future political institutional framework of Europe.
Immanuel Kant argued that, where countries are interdependent, institutions will continue to develop between them until a stable equilibrium is reached. In his words, “a state of affairs… that can maintain itself automatically.”
And Jean Monnet in his memoirs 35 years ago wrote: “Nobody can say today what will be the institutional framework of Europe tomorrow because the future changes, which will be fostered by today’s changes, are unpredictable.”
In a long term historical perspective, Europe – which has invented the concept and the word of democracy – is called to complete the design of what it already calls a “Union”.
The future political institutional framework of the Europeans will not be the simple imitation of existing models. On a personal basis, as a European citizen, I think that, like at the very moment of the birth of the concept of democracy, the Europeans will not be imitators but rather setting examples, with a Union that will be a confederation of sovereign states of an entirely new type. This naturally will call for a very important change of the Treaty and will have consequences in all the Union’s responsibilities.
In this Union of tomorrow, or of the day after tomorrow, would it be too bold, in the economic field, with a single market, a single currency and a single central bank, to envisage a ministry of finance of the Union?
Not necessarily a ministry of finance that administers a large federal budget. But a ministry of finance that would exert direct responsibilities in at least three domains: first, the surveillance of both fiscal policies and competitiveness policies, as well as the direct responsibilities mentioned earlier as regards countries in a “second stage” inside the euro area; second, all the typical responsibilities of the executive branches as regards the union’s integrated financial sector, so as to accompany the full integration of financial services; and third, the representation of the union confederation in international financial institutions.
Which institution of this confederation of sovereign states of a new type will exert these responsibilities, will be decided by the people of Europe, as Jean Monnet suggested. I am sure that the President of the European Council, the President of the Commission, the President of the Eurogroup and the German Minister of Finance – who are all present here – have their own sentiment on this question.
Let me come to a conclusion, and don’t be surprised that a central banker shares with you some thoughts on the subject of culture. It is often suggested that Jean Monnet said “if I had to do it again, I would start first through culture.” The cultural unity of Europe is at the root of the European endeavour, including economic and monetary union.
Let me give you two complementary readings of Europe’s cultural unity.
The first is the vision of Husserl in his famous Vienna lecture of May 1935. He sees the origin of the spiritual form of Europe in its philosophical roots. I am quoting: “One can see that it is the starting point of a new kind of community, one which extends beyond nations. It is now no longer a number of different nations living alongside each other and only influencing each other through commercial competition or power struggles, but it is: a new spirit – stemming from philosophy and the sciences based on it – a spirit of free criticism, providing norms for infinite tasks, and it dominates mankind creating new, infinite ideals”.
The second is the vision of Paul Valéry. He stresses the spiritual character of Europe in his essay “l’Européen”. In 1924 he wrote: “Wherever the names Caesar, Gaius, Trajan and Virgil, wherever the names Moises and St. Paul, wherever the names Aristotle, Plato and Euclid have a significance and carry weight, that is where Europe is”. Here in Aachen, I would say wherever the name of Charlemagne carries weight, that is where Europe is.
Particularly in these times of global challenges, of stress, of crisis, such a return to the “spiritual form of Europe” is enlightening.
Husserl concluded his lecture in a visionary way: “Europe’s existential crisis can end in only one of two ways: in its demise (…) lapsing into a hatred of the spirit and into barbarism ; or in its rebirth from the spirit of philosophy, through a heroism of reason (…)”.
I think that [eventually] a confederation of sovereign states of a new type, with new institutions to manage the interdependence of today and tomorrow, would be fully in line with such a heroism of reason.
* * *
The city of Aachen has a special significance for Europe as a whole and also for the peoples of France and Germany.
Nearly 60 years later, I too have the honour of receiving the Karlspreis as President of the ECB, being also a ‘Frenchman on German soil’.
As a French citizen on German soil, I do not forget the start of the European endeavour, with the speech of Robert Schuman. This endeavour was founded, in particular, on the ties between our two countries, put to the service of all other nations and of Europe as a whole, the deepening integration of our economies and currencies, and ultimately the common bond of the euro. It has been a great privilege that the path of my career has allowed me to participate in this historical endeavour.
In the almost eight years I have lived in Germany, I have developed a strong admiration for the country, its culture and its history.
Germany combines local, regional and national identities with a strong European identity, each mutually reinforcing.
This is unity in diversity – a strong whole with equally strong parts.
Europe is progressing along this path. But to go further, the European nations must continue to lead the way. It is vital that all nations engage fully in the European historical endeavour and look with confidence to the future.
There are many grounds to be confident in our long-term future.
Europe is in the vanguard of nations working peacefully together.
We have replaced confrontation and conflict with cooperation and consensus.
We have combined political freedom with economic freedom and social peace.
We have proved that our single currency is stable and credible, preserving price stability over time.
Let us carry this noble endeavour further by giving Europe now and for the longer term the institutions it deserves.
Thank you for your attention.
Copyright © for the entire content of this website: European Central Bank, Frankfurt am Main, Germany.
Three questions the financial services industry must answer in 2021
Xformative, a Mastercard Start Path recipient, shares what these questions mean for fintech partners and their innovations
This year, fintechs and institutions alike pushed the limit on how fast, innovative, and digitally-savvy they could be. Buzzwords like cloud and faster payments made headlines, but 2021 will be about refining best practices and putting them into action. Xformative believes that more industries should benefit from digital payments and that it’s not just about faster payments, but the option to offer multiple methods.
- Which industries are lagging in the digital payments space and why? The pandemic forced financial institutions and their partners to move digital transformation into a new phase of maturity. But this doesn’t mean every industry has transformed, there are still laggards. According to a survey of more than 1,400 American freelancers and contractors, conducted by Bill.com, more than half said they were still receiving their money in the form of a physical check. Checks still exist in spaces like Property and Casualty, though we did see some reassuring industry changes this year. The year ahead will require businesses to offer more payments flexibility outside of physical checks to meet the payment needs of their gig workers, freelancers, and contractors. Businesses will rely on technology partners to bring them up to speed and simplify the payments process.
- How can fintechs overcome the challenges of building in the cloud? Most businesses want to architect using a select cloud provider, or at least offer cloud-based services, to remain competitive in today’s fast-paced, disruptive landscape. There are assumptions that cloud architecture will inherently be less expensive to operate than legacy mainframe systems, but for many, these assumptions have turned upside down when developers fail to understand cloud cost optimization principles. As fintechs look to build in the cloud, they should ensure their technology is highly optimized, only leveraging real-time capabilities and transactions when required. Responsible fintechs should focus on balancing customer experience and economics with a mix of batch and real-time capabilities, constantly asking themselves, “is real-time the best choice?” Just because real-time can be offered doesn’t mean it should, and 2021 will be about drawing the line between utilization and optimization.
- Why is offering more payment choices important? Emerging faster payments are working in parallel, not as a replacement for other methods. People want options to be able to pay however they like, whether it’s with Zelle, Venmo, Apple Pay, or traditional methods like cash or card, and financial institutions need to be prepared to meet this demand. The card that consumers once kept in their wallet was a key component of the bank’s and/or program manager’s brand value, as well as potentially communicating the cardholder’s lifestyle and socioeconomic status. 2021 will reinforce the value of financial institutions having partnerships with fintechs who can help them evolve their brand value to include the broad scope of emerging payments.
It’s time fintechs and institutions partner to digitize payments and offer choices. 2021 is about building smart and partnering for capabilities that can open the door to new opportunities at a financial institution.
2020: The paradoxical year that has reshaped the future of motor insurance and related sectors
By Alan Inskip, Tempcover CEO & Founder
There’s no doubt that 2020 will be remembered as the year that changed the world. Whether that overall change was for the better or for the worse is a matter of perspective. One thing is for certain, 2020 has been the year of immense innovation and adaptability in the face of seemingly insurmountable adversity caused by the COVID-19 pandemic. In this piece, I’ll touch on some of the greatest challenges that could have had a potentially crippling effect on the economy but instead were overcome and ultimately paved the way for increased resilience and innovation.
Public transport shunned in favour of private vehicles, but driving patterns dramatically shift
With ten months of varying national and regional lockdown restrictions, passenger numbers on public transport have plummeted as many people continue to work remotely, and with most opting for the safety of travelling by private vehicle when they do need to get out and about. But because of restrictive travel measures, motorists have been using their vehicles far less frequently.
This posed a major challenge for traditional motor insurers that were not able to swiftly adapt to this change, with many coming under fire for failing to adjust annual premiums in line with new driver trends. As motorists became increasingly frustrated having to pay the same premiums or sometimes even more despite their vehicle usage being substantially minimised, the relatively new and still largely unfamiliar InsurTech industry was able to rise to the occasion.
In short, InsurTech involves the utilisation of the latest technological innovations such as data analysis, cloud computing, artificial intelligence and machine learning to enable insurance products to become more agile and flexible in line with modern consumer demand – all while remaining price competitive.
Being fully-digital and technology-driven, InsurTechs demonstrated the flexibility and agility that enabled them to adapt to the huge shift in customer demand and step change in how insurance is purchased and consumed. They did this by offering an entirely digital user experience in near real-time, with temporary policies tailored to the time actually needed – anywhere from 1 hour to 28 days.
In a time of furlough and economic uncertainty, this meant that many motorists who were not using their vehicles regularly did not have to take drastic action like declaring their vehicle SORN to achieve short-term financial relief. Nor did they have to risk driving uninsured or committing to an annual policy that they could ill afford at the time.
The rise of the digital dealership offering temporary insurance as part of the purchase journey
In the automotive retail market, dealerships were forced to make drastic changes to their operating models to comply with social distancing guidelines. Showroom footfall and subsequent sales initially plummeted. But in the face of this immense adversity, we witnessed the rise of the digital dealership, a concept that would have been unfathomable even just a year ago.
Cazoo was the first fully-digital platform to enter the vehicle dealership market in late 2019, and there has also been significant investment this year in new entrants such as Cinch and Carwow. Traditional dealerships such as Arnold Clark, Cargiant and Motorpoint have extended the digital aspects of their purchase journeys with services including home delivery and Click and Collect as alternative options to the full show room experience.
InsurTech has been instrumental in ensuring that car insurance supports this shift to digital, as several national blue-chip dealerships, with both physical and digital showroom floors, now offer temporary driveaway insurance policies that cover the vehicle for a fixed-term, usually between five to seven days.
The entirely online one-step user experience is the first of its kind in the traditionally outdated and inflexible driveaway insurance industry and it is dramatically simplifying the process of how insurance is purchased and consumed. Due to the flexibility and agility of the digital solution, each retailer has its own unique URL, where the customer can obtain a simple single-cost policy in just 90 seconds through an entirely digital process, which fits in line with the evolving consumer purchase trends.
This takes the stress out of searching for annual insurance on the spot and provides the driver with near instant cover so that they can immediately drive their new car while giving them the opportunity to thoroughly research the best annual policy to suit their needs. It’s also an ideal solution while the car is under its money-back warranty, as the driver does not have to commit to an annual policy on a car that might be returned. Another benefit is there’s no risk to any existing No Claims Discount, as it’s a separate and standalone policy.
Declining brand loyalty and a demand for a more personalised and convenient user experience
Insurance has an unenviable reputation for being inflexible and even unwilling to adapt to shifting consumer trends – making it confusing for most customers. Even pre-COVID, there was a clear trend that brand loyalty was in decline, as modern day consumers are no longer prepared to remain blindly loyal to any company for a long-term period. Instead, they will reward businesses that offer a simple and convenient user experience at best value. COVID accelerated this trend and many large insurers have struggled to adapt accordingly.
Conversely, this has enabled InsurTech to thrive, as the products and user journeys are developed with direct input from customers to ensure that they are receiving a straightforward and fit-for-purpose solution that best fits their needs and requirements. Just some examples of this are simplified terms and conditions, near-instant and paperless policy documentation via the web or dedicated app, and data-driven customer engagement initiatives that offer personalised discounts and communication via email and text messaging. The end result is a user experience that is easier, more convenient and better value for potential consumers in the market.
Cautiously optimistic (if somewhat uncertain) future
Even in the most stable periods, it’s a challenge to accurately predict future market trends. And with 2020 completely rewriting the rulebook on how business is conducted, it would be remiss of me to make outright predictions. One thing is for certain, the days of slow, inflexible and costly motor insurance are numbered. It is important to note that this doesn’t mean that InsurTech is gaining the upper hand at the expense of the traditional insurers in a bid to replace them.
Instead it is there to fill a gap and act as a complementary add-on to provide the best possible value to the consumer. Industry players that enter new collaborative partnerships will dramatically improve the consumer experience, leading to new business wins and return custom, which ultimately impacts positively on the bottom line. But those that fail to adapt will be left behind.
I believe that we can look forward to a futuristic economy in 2021, where ground breaking technology continues to advance at an unprecedented rate to adapt to rapidly evolving consumer lifestyles and subsequent purchasing habits. The real winner will be the consumer and that is in everyone’s best interest.
Leadership and management in a WFH world
By Carolyn Moore, SVP of People at Auth0
Although many of us will have settled into some kind of groove, having worked away from the office for the best part of a year, there are still numerous challenges that businesses and their workforces face in this new reality.
One particularly pertinent challenge is the one faced by people managers, especially those managing virtually for the first time. How can you ensure productivity from those in your charge when you don’t have direct oversight? How do you have those more difficult conversations over a video call? Some of your team may be handling remote working better than others, so how differently should you be handling them day-to-day?
For the majority of businesses these will be questions they’re still grappling with. When the pandemic hit, we happened to be in the fortunate position of being a remote-first business, where 60% of our nearly 700 employees were already working from home. As a result, the uptick to 100% was far less taxing for us. In seven years of working from home, we’ve learned a lot about managing teams remotely, a few of which may help leaders who are still navigating the transition.
Keeping communication channels open to build trust
Leading a remote team is wholly different to the usual, in-office set up. Strict hierarchy, and any notion of presenteeism do not translate well into the remote working environment. You have to accept that your employees’ domestic life will necessarily overlap with their professional one.
Leading a virtual team requires trust and a philosophy of work based on results, and managers need to learn to give them more freedom to do work on their own terms, as long as they produce the intended results.
Building trust is best managed with regular communication. Frequent written communications from leaders regarding strategy, objectives, and organisational learning is crucial. It’s natural when working remotely for team members to isolate themselves and get wrapped up in their own workload. Managers need to help their teams understand how their work impacts on the broader corporate objectives. At Auth0, we adopted and adapted a technique created by Google called ‘Objectives and Key Results’ (OKRs) to enable this.
Now more than ever, make it a priority to regularly check in with your employees and always be up to date and aware of what their needs are. One of the first initiatives we kicked off in an effort to do so was our Slack ‘Coronabot’. This is a tool we integrated with our main form of communication that allows employees to self-identify if their work capacity was impacted by the pandemic. Another way that we tried to better understand the concerns and needs of our employees was holding listening sessions. From these listening sessions, we’ve rolled out a couple of initiatives to combat burnout, including Slack-free weekends and no internal meeting Fridays.
Make flexibility a priority
As the worlds of home life and work life collide, the traditional ‘9 to 5’ workday needs to evolve. Leaders need to encourage their team to devise their own schedules and complete work at those times when they’re most productive.
If in doubt, ask your employees how best you can help and trust that their answers will be honest. In our own experience we saw a need for a different approach when it came to supporting our employees who are caregivers. With childcare much less accessible, caregivers are doing double duty. We rolled out a survey to these individuals to hear directly how best we could support them and used the feedback to plan future programmes and supports.
We have encouraged these employees to take advantage of flexible working hours, should they need to adjust due to the pandemic, and are using tools like Clockwise or Slack that allow our employees to set their working hours and snooze notifications when they’re offline. This alleviates the pressure to respond, and we’ve found employees are actually happier and more productive this way, especially if you have a team spread across several time zones.
Put your culture front and centre
When you work remotely interactions between management and staff become increasingly transactional. Leaders need to avoid making decrees without explaining the reasoning behind them, and the thought process that led to them. Failure to do so can create a secondary culture within the workforce composed of rumours and hearsay, which can lead to mistrust.
Leaders therefore need to firstly be clear in the reasoning for their decisions, but also explicit about the culture they want to create. Your corporate culture must be written down and communicated frequently so employees can use them to guide their everyday work.
This is particularly beneficial for multinational companies spread across geographies and timezones and encompassing multiple cultures. Whether your teams are based in Singapore or San Francisco, they all have a code of conduct to adhere to This is crucial for dealing with conflict in a productive way and creating teams that collaborate and respect each other.
Create virtual spaces to socialise
Leaders mustn’t forget the more pastoral benefits of the workspace. Spontaneous water-cooler chats may seem trite, but they’re an essential means of colleagues building rapport and learning about one another’s lives outside of work.
Socialising should not disappear when you transition to remote work. That would be bad for business, productivity, and employee wellbeing. Instead, I would encourage you to get creative and use different functionalities of the collaboration tools you’re probably using daily. We use Donut within our Slack channels, that randomly pairs three employees together and schedules them for a meeting. The intention is to bring employees together that otherwise may never interact and have them connect on topics beyond the workplace, such as life, family, etc. Donut has been a fantastic aid in keeping our distributed workforce feeling connected. We’ve also utilised the results of both our semi-annual engagement survey and more frequent pulse surveys to give us insight into how effective these engagement programmes have been and where we could tweak them to make them even better.
Don’t neglect security
Security should always be a top priority, especially especially as people are logging into more services remotely. Your business’ IT and Security teams should have set up multi-factor authentication as the minimum standard. As new apps are connected to better enable any of the measures described above, your IT teams and managers should also be educating their teams about the access third-party providers have to their data.
Managers have a crucial role to play as evangelists of security best practice. They should be monitoring whether their teams are completing their security awareness training and, if new apps or technology are being introduced, ensuring that the appropriate channels are open for them to ask questions. The pandemic has been a lucrative time for cybercriminals, who have taken advantage of some lapses in security best practice. Ensuring security is everyone’s business, but it starts from the top.
Building for the future
For many businesses the move to remote working will have been, and is continuing to be, a difficult transition. Admittedly, remote work is not a perfect substitute for personal communication. When circumstances allow, we would recommend managers meet with their teams in-person at least once a year. managers meet with their teams at least once a year.
However, even whilst the pandemic still hampers our ability to travel and meet face to face, it is still possible to have a distributed team that is productive, collaborative, and happy. If leaders take the time and make the effort to foster a culture built on trust, it will open up opportunities for you in the long-term, no matter what that future may be.
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Brand guidelines: the antidote to your business’ identity crisis
By Andrew Johnson, Creative Director and Co-Founder. How well do you really know your business? Do you know which derivative of your...
COVID-19 creates long and winding road for startups seeking investment
By Jayne Chan, Head of StartmeupHK, Invest Hong Kong Countless technology and other companies describe themselves as innovators, disruptors or...