NACC online town hall

Three business entities discuss how they are dealing with the COVID-19 crisis

MICHAEL KLEINER

The Norwegian American

The COVID-19 pandemic has affected all businesses and entertainment like no other crisis. For one, it’s worldwide. No one has been—pardon the expression—immune. Second, the drastic change came suddenly. Third, there is no predicting when the crisis will end for businesses to know how far to plan out. However, are there untapped opportunities? Can other employee talents be used? How can businesses shift focus?

On April 8, the Norwegian American Chamber of Commerce U.S.A., in conjunction with the Royal Norwegian Consulate in New York, hosted a Zoom town hall on the “Immediate Impact of COVID-19” on Norwegian-American businesses. 

Moderated by Svenn Richard Ander­sen, business and communications adviser at the Norwegian Consulate General in New York, the panelists included: Max Knagge, general manager of Scandinavian Airlines System Americas; Hege Barnes, director of Innovation Norway in New York;  and Thomas Walle, CEO and co-founder of Unacast. 

In his introduction, W. Cameron Beard, president of NACC said: “The COVID-19 outbreak has been difficult for almost everyone in the business community. The different types of businesses in which our members are involved suggests that maybe we’ve been affected in many ways. The hope is that today’s presentation can offer a little bit for everyone and provide some insights into how to deal with this outbreak, and maybe even ways to turn adversity into opportunity.” 

“This idea of hosting a town hall came from all of us at the consulate who are concerned about business and Live Diakolios (general manager, NACC), as well,” said moderator Andersen. “Speaking to all our members, we realized that there are more questions than there are answers right now. Part of our mission is being there promoting Norwegian business interests in the United States but also being available and knowing what’s going on rather than just having separate calls or conversations.”  

Max Knagge, SAS 

Andersen quoted SAS CEO Rickard Gustafson, who said on March 15, “Covid represented a crisis. An airline without income cannot remain standing for long.” SAS has since furloughed almost 11,000 employees and canceled all flights between Scandinavia and the United States, as well as most international flights. All this came at a time when things were looking up for the airline.

“When it started in China, in the last week of February, first week of March, we canceled some capacity to China, Beijing and Shanghai,” said Knagge. “At that point, we, quite naively perhaps, looked at deploying that capacity in the United States instead. It didn’t take many days or hours even to figure out that that wasn’t a good idea. As travel bans were imposed, as borders were shut, the whole situation just evolved rapidly, more or less overnight. At the time, we as a company had a strong trend. We could see that market shares were increasing. We could see that more passengers chose to fly with SAS. We could see that they are paying more. We can see that the customer satisfaction was going up. So, having that trend leading into this situation helps us to some extent. Now, we’re down to single digits in index, in our capacity of what we normally fly. We only operate a few domestic fights in Norway and in Sweden right now. We have close to 11,000 employees partially or fully being furloughed or sent home. Our organization is down to a bare minimum now.”

SAS found two ways to contribute in the crisis. One was using their planes for cargo and their staff shifting their talents to help with medical care.

“We are part of crucial elements in the infrastructure in Scandinavia, where we fly medical equipment, test kits, and face masks to Scandinavia from different parts of the world,” said Knagge. “We have rescue flights to bring home stranded Scandinavians from across the world. A lot of our staff has competence… asked for right now. Our cabin crewmembers are good at handling crisis situations and customers and have a basic medical education. Through different partnerships, they have gone through crash courses on medical education. They now are being deployed in the society working with health care providers in the Nordics, at hospitals helping doctors, nurses, the whole health care sector, in good ways. We can use the great people and assets we have in a crisis.”

Thomas Walle, Unacast

Unacast is a data research company, based in New York with an office in Oslo. Unacast analyzes human behavior and movement (see “Unacast casts its eyes” in the Nov. 15 issue of The Norwegian American). They realized they had a product that would be helpful in the crisis. It has boomeranged back to them. “How can I get it?”

According to its website, “At Unacast, we define human mobility as the understanding of how people interact with places over time. Understanding human interaction and movement patterns empowers companies to build better products and make smarter decisions in real time.” They can provide companies with data to understand which locations have the most traffic.

The result was the social distancing scoreboard.

“We were uncertain about how the COVID-19 would impact us, and our operations are split between Oslo and New York,” said Walle. “Norway was hit with the pandemic before the United States. We saw how Norwegians took certain measures, but we also saw how they were struggling to understand whether the measures were working. Are people staying at home? Are they doing social distancing? It was a brief idea that was discussed in the team.

“We have this massive amount of valuable data in the United States. How can we help? What kind of insights can we provide? The United States is approaching social distancing in so many ways. There is nothing being done on the federal level. It’s very much state by state. We came up with the idea that we can help states, counties and municipalities understand whether they are doing the right efforts around social distancing. Hopefully, they can learn from each other. Luckily, we have many of these models built. For us, it was repackaging this. We had the team working 24/7 for four or five days, because there was an urgency to get this awareness out there.

“We launched the social distancing scoreboard about two weeks ago. At unacast.com, there is an interactive map where we see the change in distance traveled by people by state and by county, and the change in visitations to essential versus non-essential places. Those two data points are a metric if people are adhering to social distancing or not. I wish I could say this was a strategic output, but it wasn’t. It completely exceeded our expectations. More than 3 million people have used it in the United States. The governor of Tennessee put in a shelter-in-place order in place since we graded them at C [on a traditional grading scale]. He realized that he needed to be stricter about it.

“We have about 40 different universities using our data to do research papers on how the pandemic is spreading. In 14 days, we have gotten about a thousand new leads, but now we have too much business, which we can’t really comprehend. We have been fortunate in that way.”

Hege Barnes, Innovation Norway 

Barnes works with a cross-section of businesses and industries in various stages of development. The status may range from horror to a refocus.

“It’s a bloodbath, a slaughterhouse, and all these grim terms are passing by from our companies,” said Barnes. “We’re seeing and sitting right in New York, the epicenter of everything, We hear the worst stories, but there are some highlights as well. A lot of the larger companies have shifted or moved their personnel and operations home. Some have paused U.S. operations.

“The startups and entrepreneurs are not as fortunate and may not be as liquid as all the others. They must deal with the situation in different ways. What we hear from most of them is that they are laying off staff and trying to cut all costs just to survive. They’re not expecting revenues for the next six months, some not until 2021. I am helping a company from going bankrupt, taking advantage of all the loans, grants, and opportunities that Innovation Norway and the Norwegian government is offering them.

“Other companies are looking at changing their verticals, seeing if there’s opportunities in other areas as they see no future investments in their current verticals. They’re forced to shift their focus towards other customers and markets. 

“That’s part of the advisory work we do with them. Some of them have been good at focusing on different scenarios, planning, and creating action maps to where can they go and what would happen. A consumer product company shifted to messages that focused on empathy and family values instead of fun and outdoor adventures. They saw immediate results. Another consumer product company shifted to 100% direct to consumer focus. They expanded to larger markets to have larger opportunities. They also saw immediate results. A tech company started focusing on improvement and repositioning. Where can we position ourselves to create a stronger case for our product and our solution versus the competition? Another tech company acquired another company with complementary products and figured they can double their revenue ambitions for the year. There’s a lot of different ways that they can work.”

Norway’s major industry is tourism, and that is the crossover with Knagge and Barnes, who works with VisitNorway.

“We are in daily meetings with the industry,” said Barnes. “I think we employ about 170,000 people who are now furloughed or on temporary leave. It has catastrophic wild consequences, because the Norwegian tourism industry is built out of smaller and micro-sized companies, such as family-owned hotels. All these smaller companies have 72% to 90% of their revenues throughout the summer. Now all that foundation is gone. The government has come up with different relief packages, and they will continue to build on that and give them specifically to certain companies in certain sectors within the tourism industry. The ones that we see that struggle the most now are the tour companies, because they must fully refund travelers within 14 days, or their suppliers, who buy the products from them, including the airlines and hotels.

“Most European countries are considering first emphasizing local, domestic travel, or shorter distances, where you know you’re safe. At the pace you are looking at here, most likely 2020-2021 will be a recovery year and then, fully back. Instead of recovery, they will rebuild for the future, which can also be an advantage, because you can rebuild in a more sustainable way. The tourism industry is suffering everywhere.”

“If you look at the leisure travel for this summer, I think it’s going to be really tough to get to where we normally are,” said Knagge. “Traveling far is probably not something that people have on the top of their minds right now. A large part of our leisure travelers during the summer are customers who are traveling to Norway to go on a cruise. The cruise industry has been badly hit in this situation. Those factors tell us that this summer is going to be far from normal.

“Corporate customers are finding other ways to meet within the digital solutions, which I think will have a more long-term impact on corporate travelers. If you look at leisure [travel], my personal guess is that it will start picking up. But it will take some time before people want to travel again. I think short haul and domestic travel will be picking up earlier than the long haul one. About 70% of our flights are short haul, and 30% of our business is long haul. From that perspective, we have a business model in Scandinavia, which would have us getting revenues back earlier rather than later.”

This article originally appeared in the May 8, 2020, issue of The Norwegian American. To subscribe, visit SUBSCRIBE or call us at (206) 784-4617.