(upbeat music) - [Narrator] Major support for Carolina Business Review provided by Colonial Life, providing benefits to employees to help them protect their family, their finances and their futures.

High Point University, the premier life skills university, focused on preparing students for the world as it is going to be.

And Sonoco, a global manufacturer of consumer and industrial packaging products, and provider of packaging services with more than 300 operations in 35 countries.

- Every year for the last few years, we have been honored to be included with the Charlotte Regional Business Alliance to facilitate a dialogue called the economic forecast.

It is a look at the coming year.

And it's pretty unique in that the panelists include the CEOs of the largest corporations, not just in the Carolinas, but also in the country.

This time we have the CEOs of Lowe's, Marvin Ellison, Bank of America, Brian Moynihan and Duke Energy, Lynn Good, all sitting down, talking about everything from employment, to DEI, to the economy in general.

We will take a look at it in two parts.

Please stay with us because we start part one right now.

- [Narrator] Gratefully acknowledging support by: Martin Marietta, a leading provider of natural resource based building materials, providing the foundation upon which our communities improve and gro.

BlueCross BlueShield of South Carolina, an independent licensee of the BlueCross and BlueShield Association.

Visit us at SouthCarolinaBlues.com.

The Duke Endowment, a private foundation enriching communities in the Carolinas through higher education, healthcare, rural churches and children's services.

This is a Carolina Business Review special presentation of the Charlotte Regional Business Alliance 2022 Economic Outlook.

Featuring Lynn Good, Chair, President and Chief Executive Officer of Duke Energy.

Brian Moynihan, Chair and Chief Executive Officer at Bank of America.

And Marvin Ellison, President and Chief Executive Officer of Lowe's.

Now, Chris William.

(audience clapping) - And thank you all, it's nice to see you Brian, Lynn, Marvin.

Madam chair, I start with you for better or for worse.

So, Lynn, over the last 20 months it's not a surprise, a public health crisis has changed many things.

What do you think the permanent new rules of engagement are for business strategically, tactically, in every way?

What do you think?

- It has been an incredible 20 months, Chris.

And I think about those early months where your focus was so keenly on customers and employees and community, because we weren't only dealing with the health crisis, but we were dealing with an economic crisis.

And I think what we learned in each of those areas are gonna be with us for a very long time.

So for customers, we really got focused on our vulnerable customers, those that were impacted most heavily by the economics.

And we had an opportunity to put technology in place, to really innovate around how we can connect our customers with resources that are available in the community.

And I'm proud of the fact that we brought over $45 million into the company to support our customers from all kinds of different social service agencies, federal support, et cetera.

For employees, it was all about safety, but it was also innovation and providing flexibility.

We sent half of our workforce to work remotely in March of 2020, and they remained that way for the last 20 months.

It gave us confidence that the technology and fundamentals that we'd been building for some time could be put to use in an incredibly powerful way.

And I believe this flexibility that we've introduced for employees is gonna be with us for a long time.

And then community, I'm so proud of how the Charlotte community came together around this issue.

And I know Duke, B of A, Lowe's, all made incredible contributions in the community, really to support whether it was hunger or education.

Over $11 million from the Duke Energy Foundation into the Charlotte community.

But I would also say as we were fighting all of that, trying to figure out how to keep the lights on during a pandemic, we also did not lose sight of strategy.

And I think that's a timeless reminder to all of us because we have to keep looking ahead five years, 10 years, et cetera.

And that's where progress around climate, progress around carbon reduction continued despite the pandemic.

And that's where our focus on racial, equity, social justice continued and was even heightened as a result of some of the events in 2020.

And that commitment to diversity and inclusion, that commitment to making sure we are doing our part both as employers and as community leaders, I think is unchanging as well.

And I'd like to just thank the 50% of the Duke workforce that was in the workplace every day, our line of service techs, our power plant operators for keeping the lights on with great reliability during that time.

And their commitment to all of you is unchanging.

And so I think there are a lot of learnings and a lot to be proud of from the last 18 months.

- Thank you.

We're gonna unpack a lot of that.

We're gonna talk about employment, we're gonna talk about DEI.

Chairman Ellison, I wanna come back to you on how is Lowe's forever changed?

And I don't mean just from the stores or supply chain or sales, but how do you think differently now based on what we've learned the last almost two years?

- Well, first it's good to be here.

We went into the pandemic like most major companies, thinking that we needed to shore up our liquidity because we had no idea what was gonna happen to demand.

And the opposite occurred, demand went through the roof because all of us started to spend more time at home.

So I think what's changed, and I think what will be forever changed is how we viewed a home.

It's always been our largest investment, but the home went from just being a residence to our school, and office, your primary location for recreation and entertainment.

And because of that, people start to make modifications on how can I take my existing residence and make it into all of these things and make it more modular and make it more agile.

And so for us at Lowe's, I mean, that's kind of the role that we've been playing for the last 20 plus months.

I think the other thing that we learned as a retailer, is that customers desired and demanded choices.

Some customers remained very comfortable putting on their mask and coming into the brick and mortar environment like they had always done.

But you had customers who had never ever ordered anything online that became very efficient at ordering online.

Because they did not wanna take the safety risk of going outside and venturing into an environment that they were not comfortable in.

And so we had to create opportunities and options for customers that we currently didn't have in place at that time.

Things like curbside and touchless lockers and those types of things and same day delivery from source.

So the agility and flexibility to allow the customer to have choices in how they shop for retail, that was something that we think we'll never revert back on.

And another dynamic that I think we all saw play out in some cases in a tragic manner, is the impact for aging customers, aging residents that were not living in their own home, but were living in other types of facilities, and the risks that the pandemic brought upon them.

And so now this trend is a lot more aggressive where customers want to age in place.

They no longer desire leaving their home to go to a more broader residence, they just wanna stay where they are.

But then that requires modifications.

My dad's getting ready to turn 80 years old and I've tried to get him to move a couple of times and he's been very clear with me, that ain't gonna happen.

All right.

(all laughing) And so as a CEO of a home improvement company, I'm thinking, okay, well, great, I'll go out and I'll modify the home for him.

So, I'll get a walk in tub and I'll get pull down cabinets and I'll get non-slip floors.

And I had a very difficult time being able to do that.

I couldn't do it in my own company.

And I couldn't find one location to do it in.

And so that dawned on me, if I can't get this done as the head of a home improvement company, this must be really hard for everybody else.

And so we decided to collaborate with ARP and come up with an initiative where we are giving a project management one-stop shop for aging customers that desire to stay in their home and allow the home to be modified to their mobility changes and their lifestyle changes.

So those are things that we noticed that the pandemic accelerated.

And we don't think it will ever go back to.

- Chairman, and what did you notice that maybe you wouldn't have, had we not had this shock to the system?

- I think in the end of the day, some of the activities that were going on in terms of people's digital behavior and stuff were just, were on a line and they may have jumped up, et cetera.

But the real change really was in how we work and how we get things done.

So, whether it's Lynn or Marvin or our company, you had people who had to stay in the field, people in our branches, and they did a fantastic job, the people out making sure the stuff worked for you, the people in your stores.

But you had in our case, 180,000 people or 160,000 people went home overnight, basically.

And we had to position them, so we had to get ahold of 100,000 computers and put them in people's homes and get them wifi strengthened, types of functions that... People carry on a laptop if you're a certain type of function, but not if you're a call center operator.

And how do you run millions of calls a day and stuff.

So it really forever changed the way you thought about resiliency and about recovery, et cetera.

And then frankly, people forget that there was a time period here where it was very dicey.

And every...

It looks back and we sort of say it's inconvenient not to be able to do this or do that.

But there was a time period when people didn't know what was gonna happen here.

And so, people panic borrowed.

So everybody came and said, I want money, and $70 billion of loans in literally three weeks and stuff.

So, we were able to do it.

That was an amazing thing, we were able to actually meet the needs of the customers and end up with that surge of borrowing and then the surge of cash and then the governmental programs and PPP.

And these sound like almost trite things that we almost remember back there.

But it was a half million loans in three, six months time and stuff like that.

And 10,000 people working on Easter weekend.

So, I think you learned a lot about the ability to adapt.

You learned a lot about the ability to take a business model and move it to a different place quickly.

You learned a lot about the resilience employees.

We all learned a lot about medicine we probably didn't think we knew and how to work with that.

But it was really the teammates that got us through this.

They served the customers well, they took care of each other.

And then we learned a lot about changing your benefit plans to really meet the needs of teammates.

So we...

It was clear to us when we had all the people go home, that we had to make more convenient for them childcare.

So we basically gave everybody $100 to hire somebody to come in their home and take care of the kids.

No questions asked.

It could be your brother, sister, mother, whoever.

They will pay $100 a day to do that.

And that allowed people to stay on the phones and work with customers and do their job because they couldn't because they were... Overnight you became the tutor, yeah, prepared meals, were the hall monitor, made sure that you're the study hall monitor.

You were the technology person because the schools weren't that good at determining technology.

And so we just had to make sure (indistinct) comfortable and it got people help in their home and things like that they were instantly adaptive and were the right answer.

It costs...

In that case, we've done 4 1/2 million days of that, so $450 million.

But you couldn't serve the customers doing what you wanted.

And by the way, the mental stress in the household was stressful enough, and we did everything we could do to take that stress down so people could do their job.

So I think we learned a lot about that.

Now, how that all plays out, I think the world is relatively premature in deciding the world's changed forever.

There were things going on, they changed, all of our business models changed.

But the reality is that there was no choice.

Now there's choice.

Now what happens next is gonna be much more interesting because there was no choice.

You couldn't have anybody at work.

You couldn't...

There always is choice, and so how we're all gonna deal with that as business leaders, how economies are gonna deal with it, how the structure is gonna deal with that.

As Marvin talked about, assisted living and stuff, all this stuff has changed.

We don't know quite how yet, but we know it has changed.

And that'll take some time to really figure out when you can swing back and have choice again, what people will decide to do will be an interesting thing.

- Yeah.

I'm gonna move my chair 'cause I feel like you may feel like the Uber driver that you can't be turning around looking at me.

- And you didn't pay me anything for-- (Chris laughing) - This is the uninhabited part of the program that you have.

- You can pay me twice what you paid for last year, so... - Lynn, as Brian just described it, are we...

So, as kind of triaging the business gives way to almost some bit of just being tired of the situation and of course those are my words.

What are the next steps?

So where do you see 12 months from now?

Are we worried about the next variant?

Are we more focused on, as you talked about, getting people back in?

Are we focused on what the new worker looks like?

What do you think 12 months from now is gonna be the talk?

- Chris, I think we're still finding our way, but I think the mindset has changed to living with the virus.

So it's on Omicron now, I don't know what it is next time around.

We have more tools this time, right?

We have vaccines, we know more about the disease.

We have the confidence that we can adapt, the points that Brian made around flexibility.

We know we have a lot of tools to address this.

And so, our objective is to keep going, not only doing what we do every day, serving customers, but to make strategic progress on carbon reduction, on transforming the electric system, on meeting the needs of this growing economy.

The economic development engine of the Carolinas has continued with great force.

Just the announcement on Monday of the EV battery facility.

So, what I think about 12 months from now, is let's just keep adapting and adapt with confidence that came out of this pandemic to continue to grow the economy and continue to grow our businesses.

- So what is keep adapting?

What does keep moving forward look like?

Now, and this is for Marvin.

- Okay, I will moderate.

- I wasn't not looking at you, I was intentionally not looking at you.

- Well, I... Look, I think we all learned the importance of agility from a business strategy and even a tactical standpoint over the last 20 plus months.

I think you keep adapting by continuing to listen and staying engaged with your employee population.

One of the things that I've required all of my leaders to do is not just engage with your direct reports, but skip levels down so that you can be engaged and plugged in to what's happening and what is impacting the lives of your employee base.

'Cause at the end of the day, whether it's the energy sector or banking financial services or retail, it's all about people.

It's about the people that work for the company and the customers that you're trying to serve.

And I think adapting means just staying plugged in and being aware and being sensitive to the needs of those constituency groups.

And we have over 300,000 employees that we call associates.

And what I love saying to my team is we have all of God's children working for us.

Which means that you got every problem, every socioeconomic impact.

You got everything happening in society, is happening in the workplace.

And the pressure and the stress that comes along with what we've all dealt with in the last 20 months, continues to manifest.

And I think as leaders, we have to stay plugged in, we have to listen and we have to be willing to adapt, be agile and make the necessary adjustments.

And I think as long as we're able to do that effectively, then we can stay in front of some of the trends that we're gonna have to address.

- Brian, as we return to work, what are the permanent work models that are emerging for you?

- Oh, we'll find out.

And we...

So you get the question sort of work from home and the flex starting at different hours and working 10 hour shifts for four days, as opposed to eight hour shifts or five.

All those were concepts that played out.

It's just so you never had, in our case 200,000 people doing this all at once.

You had 10,000 people on work from home before this, and suddenly had 180,000, whatever it was.

So I think all those principles will swim together and then we'll figure out ways to do it to address specific needs, the needs of, if people are gonna have their parents living at home with them, they're gonna want a certain type of flexibility or... And things like that in terms of hours, started hours, and it was kids, maybe start at the end of one day.

It's also got an implication of location of work.

We were all in our central offices, almost all companies are on this, basically hotel space and stuff.

This is not a new concept.

This just allows you to frankly have the trave of the employees saying, we'll go to hotels and you can have more flexibility, what we can't do is have offices that are only used three days a week.

Because that's inefficient use of real estate, and that does it.

So I think all the implications of this in people are how people work, where people work are interesting, but also we do have to remember the other side of the tolerance from the customer base to things that could happen in the mold we're in will go down over time.

So, a long line at one of your stores, a long line at one of our branches, not responding to the call, the call going into someone's home and disrupting... All these things that we, you could kind of... People are just so happy to be okay from the virus, and so happy that you're... Will start to change and that exacting your customer driven experience that we all try to achieve, will change.

And when that changes, it will change again.

So I think we got to...

The principles probably aren't that different, we'll have people want more flexibility, location flexibility.

We'll probably have different types of building configurations over time, which we are doing.

You'll have different types of technology demands on your systems because the distributed systems at this volume are completely different than consolidated systems.

And...

But I don't think any of these are, holy, geez, we never thought of that.

But the difference was, when a storm hit these coasts and we may have had our Jacksonville call centers go down.

Because the hurricane shut them down.

We had call centers all over the country that could handle the volume.

Everybody had this happen at once.

That changed everybody's thinking.

What happens if the entire system goes down at once and we have to put everybody at home?

We now learned how to do it.

We had to make it up as we went along.

But that to me, those are the kinds of things that are different.

Which is this could affect everybody's operations as opposed to locationally specific, unit specific, partial unit specific, et cetera.

And so you have these broad themes and these very tactical themes at the same time.

- Lynn, when you try to plan out, look around a corner with this, when you're trying to figure out what to do with the workforce that's fair of course.

But you also wanna measure productivity, you want the integrity of the job getting done right.

You don't want your workers overworking at home either.

- Sure.

- So, how do you figure out, well, this is how we're gonna purpose our real estate, or this is how...

These are the folks we need back in.

This is the permanent work, the new work model.

This is the permanent hybrid model.

If you don't mind, what are those privy conversations?

- Chris, we have taken a stab at this.

I think Marvin was sharing that they have as well.

We've defined what we think is full-time in the workplace jobs.

We've also defined what we think are full-time remote.

And then we've defined hybrid, which is somewhere between maybe two, three days in the office with flexibility, depending on what the work requirements are.

And we are in the process of bringing back our corporate center employees.

So we are doing it in three phases, we're in the middle of phase two.

And I share that because I think we'll make refinements to all of this.

I think when we get back, we will figure out that maybe something that we thought was hybrid could work remotely.

We may find that remote needs some hybrid time in the office.

And I feel like maybe this is a reflection of my generation, that we have lost something from working remotely.

And we don't even remember it, because we've been home for 18 months.

And my hope is that we reignite the power of coming together, innovating, having conversations, the hallway conversations, solving those small business problems that are not worth setting up a teams meeting.

Or texting or making a cell phone call.

So we're gonna start with this approach and I think we'll check and adjust all along the way.

And this adaptability and flexibility we've been talking about gives me confidence that we can keep adapting and adjusting.

The north star for us is customer experience and customer service, 24 hours a day, all seasons, great reliability.

And if we keep our focus on that and the safety of our employees, of course, foundational, I think we'll make good decisions as we go forward.

- The thing that we all have is if you think about the class of '19 out of college, the class of '20 and the class of '21 that came to work for us in our programs-- - That we've never met.

- That never met each other physically.

We brought all ours back.

But yeah, but that was 5,000 kids in New York.

Just noodle on that.

Never met their boss, never met each other other than informally and things like that.

We're also not in a central location.

It's just, you sort of noodle on it, you start to say, even with normal attrition over a couple of years, and we've all had K-cups and attrition at normal.

And again you start to think, how many people have never met.

So there's an element of this that I think you can't be premature on, and you have to remember, we have to get people back to something.

And then as Lynn said, then you have to adjust again because whatever we think now, I guarantee you in two years from now, we'll look back and say, we really thought that?

Just like two years before this, we said, we really thought that?

That the way to recover was this way?

So I think we gotta be careful about being absolute as business community and think about around a city like this, bringing hundreds and hundreds of kids into town to work for the first time who literally went to college and went home in three class years.

Three class years were disrupted.

- Marvin.

- Well, look, I don't disagree with anything that Lynn and Brian said, but my situation is a little more complex.

And I think Brian just as well with his branches, while we had corporate associates working remote, I had 1700 plus stores opened every day throughout the pandemic.

So, of my roughly 340,000 employees, 95% of those are store and distribution center based.

And they didn't get the option to work remote.

- [Chris] Yeah, sure.

- Because customers needed us to meet the demand of the changing environment in their residence.

And they also needed us to ensure that they could buy our product to maintain the degree of safety.

So, we have a balance of having a corporate staff, so to speak that we were forced to put it into a remote environment, but yet we had store associates that were out literally on the front lines, serving customers on a day in and day out basis.

So one of the things we had to do was create a level of trust with our frontline associates, that they were not the exception to the rule of the other procedures that we had in place for our corporate base associates.

One of the ways we did that is I required all of my officer level leaders, including myself to be out in the stores every week.

Because I felt if we were going to mandate that our store managers and cashiers and the receiving associates, et cetera, if they came to work every day, then I wanted my vice presidents and senior vice presidents and executive vice presidents and chairman and CEO and everyone else to find ways to be out in stores every week, engaging with those associates, making sure that they had what they needed.

And also to reinforce to them that we're no better than you are.

If you're out here in the stores and we're gonna be out here with you as much as we can to make sure we're listening, learning and trying to help you manage and maneuver through just a really challenging environment.

- Did your leadership team do that easily?

Did you get pushback from them?

- Oh, sure I did.

Some people, a small group that would say, well, I don't feel safe going out in the stores.

And I said, well, great, go anyway.

Because-- (audience laughing) - Go anyway.

- No, no really.

And here's why, because every cashier, every receiving associate, every store manager, every product associate could have made the same argument.

But in order for them to provide the livelihood for their families financially, we needed them to be out there.

Now, along with that, I'm pleased to say that we paid out, just in 2020, almost a billion dollars in bonuses for frontline associates.

(audience clapping) - You've been watching part one of a two part series of an economic forecast with the CEOs of Lowe's, Marvin Ellison, Bank of America, Brian Moynihan, and Duke Energy's Lynn Good on what may happen in the region, in the Carolinas.

Next week, we start with part two.

- [Narrator] Major funding for Carolina Business Review, provided by: High Point University, Martin Marietta, Colonial Life, The Duke Endowment, Sonoco, BlueCross BlueShield of South Carolina.

And by viewers like you, thank you.

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