Crisis Talk with Andrew Cross - AIIB shows how working remotely can work
Can the capital markets function properly with its workforce operating remotely, whether from home or at disaster recovery centres? This question is becoming increasingly important as the Covid-19 infection rate rockets and the death toll grows. One organisation that has more experience of coping than most is the Asian Infrastructure Investment Bank, based in Beijing.
US president Donald Trump's European travel ban on Wednesday exacerbated many people's fears that the world's leading economies faced weeks, perhaps months, of lockdown and disruption.
Most institutions in the capital markets have had emergency plans in place for the last two weeks, whether formally splitting up teams and sending them to offsite back-up locations or running through test scenarios such as having 20% of staff work from home each day of the week.
While dealflow has been light over the last two weeks, so far the capital markets appear to have coped. This week has seen bond issues from JP Morgan, Starbucks, the International Finance Corp, Danone and Bank of Nova Scotia among others, and most participants have expressed optimism that they can operate proficiently, despite the problems.
However, with Italy ramping up its measures so fast and severely, and other European countries taking their own drastic steps, the prospect of extended shutdowns in the world's big financial centres has suddenly become very likely. So can markets cope with an extended period of disruption, perhaps for months at a time?
The China-backed supranational bank, the AIIB, advised staff towards the end of Lunar New Year to work from home rather than return to its headquarters in Beijing’s financial centre. China was progressively tightening controls on people moving about, in a — so far successful — attempt to stem the spread of the infection from its origin in Wuhan, central China.
For the AIIB it is so far, so good, according to Andrew Cross, its CFO. The bank's 300 staff, spread over 45 countries, have now been working remotely for most of this year. "Despite this," he says, "the institution is doing everything expected of a supranational development bank. We are working with our clients to implement and monitor projects, and we are building up our future pipeline of green, sustainable infrastructure investments."
Cross, who is currently to be found in his native New Zealand, thinks a positive and enlightened attitude to the problem has been essential. "It’s been an extraordinary experience — one with challenges that we have embraced. For example, many of us have posted about our remote work experiences on LinkedIn. Not only was this a fun way to connect and engage with each other, it also reinforced to the outside world that the institution was still open for business.
"We are guardians of an awful lot of government money and while it is not business as usual, we have overcome the obstacles to achieving a new business-normal set-up. But also important has been the social nature of it — just as important as the tech element. Posting on LinkedIn has been a very effective way of communicating with each other, sharing the experiences and of showing each other the practical lessons and tips of remote work."
Lessons from the AIIB
So what are those practical tips? For Cross, whose institution is admittedly a lot smaller than many supranational and agency peers and most investment banks, a crucial part is constant staff contact. "As managers we have to be really careful to make sure no one feels isolated. This involves very deliberately staying in touch with everyone. In a normal office environment you tend to bump into people, walk past someone’s desk and start up a discussion about something. This interaction is of course missing when working remotely. So you really have to make sure you reach out to people extremely regularly through the various mediums open to you.
"But it also involves making sure your people have the best communications that are available to them — for example, we’ve been able to fix people’s slow broadband connections for them. Funnily enough, we have found that just because you are based in a developed country does not mean you have the best WiFi or web access."
The bank has also set up a helpline for people feeling anxious or under pressure because of the situation they find themselves in. "We have found that improving their connectivity has really helped them," he says.
But Cross adds that on top of being extra-sensitive to staff needs, the foundations of good modern treasury systems also need to be in place. "While this has shown that management has to really step up to make sure a feeling of connection and engagement is looked after, you also need a really strong bedrock of technology."
AIIB staff have all become much more fluent with various tech systems as a result. "We have all become experts at Teams, Zoom, VPNs, Sharepoint, Wechat etc — we now know many of the tricks and functions, how to operate conference calls efficiently and how to share data and documents during screen-based group conversations."
Cross says that for AIIB staff, there have been three phases so far. First of all, there was a "clunky" period during which people were getting accustomed to the new ways of doing things, getting used to the technology and trying to improve their internet connections.
"Then we moved into the second phase, which saw people get in to the rhythm of this new way of life, getting used to the different time zones — you have to carefully manage your day and time when you have teammates all over the world. The third phase is when you start looking at what you can improve — how you can optimise the situation."
Long term change
So what are the long term effects of the coronavirus crisis on the operational side of capital markets? Cross thinks it could well challenge long-held views on the necessity of having everyone working together in big physical offices, possibly altering working practices for good. "This whole experience has brought the work-life balance debate to the fore — about just what is possible nowadays if you have the right tech and support. For me it shows that remote working can allow you to be a lot more efficient and productive."
However, he cautions that management needs to be very careful with this new way of working, emphasising strong contact with staff and sensitivity to their particular situations. "You have to make sure that people do not become islands and every leader has to make the extra effort to reach out to all your team, no matter where they are. Work-life balance also has to be carefully monitored because without deliberate schedule management, you can have someone start their workday at 3am."
The AIIB’s experience also confirms the value of secure, cloud-based systems. "The use and benefits of virtual working are compelling if you put in place sound cybersecurity measures," Cross says. "Perhaps it is a generational thing — the older ones among us perhaps are more wedded to the idea of face to face discussions and working together in the same office. But I think this crisis will really change attitudes towards remote working. We have shown that our business can carry on and thrive with the right culture, attitude and sense of teamwork."