April 7, 2020 | Eric Wittekiend
By Eric Wittekiend and Rebecca Oeltjenbruns, Center for Practical Management
In the first quarter of a typical year, leaders face any number of changes in their organizations: acquisitions, reorganizations, new product launches, new management structure. But the COVID-19 pandemic has added a new level of organizational change, combined with unexpected stresses at home.
Managers are critical to helping employees handle the worry, stress and anxiety they may be experiencing so they can move on to acceptance and productive engagement. But how?
It is natural in times of change for employees to have a variety of reactions, including denial, resistance and an urge to withdraw. Right now, these feelings are exacerbated by misinformation, frequently changing restrictions and constant media focus.
Worry, stress and anxiety are common reactions to change. Worry happens in the mind, stress happens in the body, and anxiety happens in both mind and body. In small doses, worry and stress can be positive forces in a person’s life. But it’s likely your team members are experiencing more than small doses at this time.
It’s important to remember that in times of great change, employees need two-way communication rather than just top-down messaging. Opening up the lines of communication also gives you visibility into employee reaction and response.
An October 2019 Raddon Research Insights’ analysis of nearly 1,900 full-time employees at financial institutions nationwide revealed the employees who grade their manager’s performance highly are much more satisfied with their employer and more willing to recommend their employer as a place to work. In the chart below, we group employees into thirds based on how strongly they agree with statements such as, “My supervisor does a good job of explaining the reasons behind important decisions” and “Communication is a two-way process with my supervisor.”
In addition, among institutions in the Raddon Viewpoint Employee Survey program, institutions whose employees grade their manager well perform better. Their return on assets is 28 percent higher than those who grade their management poorly. Their household balances are 17 percent higher, and their Raddon Performance Index (which measures profitability, growth and depth of relationship) is 11 percent higher.
Here are some activities designed to help you lead employees through change in the coming weeks:
According to an article posted by Harvard Medical School, research shows that just 8 to 10 minutes of writing can help calm obsessive thoughts. This quick activity can be done in a team touch-base call. Ask everyone on the team to write down their worries in 3 minutes or less. Sharing worries in this way allows people to know they are not alone; it gives voice to their concerns.
“I did the worry activity with my team today. During our virtual team meeting, we all took 3 minutes to write down all of our worries. We also analyzed which of these worries we can control versus those that we cannot. We spent the rest of our team touch-base talking through the worries. This process was reassuring to the team members and had a distinctively calming effect on everyone. Thank you for the suggestion!” -Marketing Director, Community Bank in New England
Encourage each team member to come up with at least one “next step” or action to take. This can be done in collaboration with you during an individual touch-base call. Allow employees an amount of time each day to focus on their worry. Once the time is up (say 10 minutes), consciously redirect thoughts. This could easily be incorporated into a morning huddle.
Understand that right now much of the employees’ worry relates to their health and their families’ health. Don’t diminish or disregard that employees have already moved ahead in their minds to “what’s next?” That may be worries about layoffs or loss of wages due to missed sales numbers or quarterly goals. Remind employees to stay in the present. Think in two-week increments. What’s most important to plan for now?
As time moves forward, and the worst has abated, you can shift to having conversations about the “new normal” that will come after the crisis passes. Keep those lines of communication open.
Make a list with each employee of things he or she can control and those which cannot be controlled. Do this during an individual touch-base meeting. This is a time when employees may share the stress being caused by Covid-19 on a spouse in the food service industry, a child unable to attend university or an elderly at-risk parent in their home. However, there are many things the employee can control, and seeing this on paper can often help manage stress, turning it more effectively to productive action.
Appreciate that each employee will experience stress differently, including the stress of working from home, not working at all or not meeting goals because customers or members are staying home. Also, be realistic with your expectations. If you’re asking people to work from home, find out whether or how it will work for each employee. Do they have space in their home for this? How will they handle childcare when children are home from school? What are their plans to limit distractions?
While you shouldn’t compare employees, encouraging them to share their best practices on managing these issues can help them cope with the stress, as well.
Your ability to positively and productively lead employees through change may lead to an unexpected outcome at the most unexpected time in our world: higher levels of employee engagement. If you don’t already do so, consider an employee engagement survey in the near future. Asking what you did well and where you could have improved demonstrates your commitment to deeper engagement with your most valuable resource.
One of the reasons for this tremendous growth is falling prices.
The U.S. Department of Energy’s National Renewable Energy Laboratory (NREL) says that solar photovoltaic (PV) prices have fallen more than 60% since 2010. The drop in cost along with governmental incentives such as the solar Investment Tax Credit (ITC) has made systems far more accessible for both residential and business scale installation. The Center for Sustainable Energy estimates that the average solar panel system, including installation, can cost between $12,000 and $25,000, compared to around $45,000 just over 10 years ago.
Changing regulation and shifting policy have also contributed to the rise of solar. The past 10 years have seen expansive regulation, nationally in the form of tax incentives, and locally in the form of solar easements, which provide more protection to solar customers by prohibiting or limiting private restrictions on solar energy installations. Additionally, implementation of and revisions to existing state net metering laws have encouraged the growth of solar installation.
And looking forward, there is ongoing dialogue in the industry and among policymakers shaping the way rooftop solar generation is used and valued.
To that point, said Severin Borenstein at a solar competition and consumer protection workshop, a typical distributed system (rooftop) sends much of what it generates into the grid. In the past, that contribution was largely undervalued, but with new regulation, the rooftop provision to the local and national electricity supply is getting a fair shake.
And that fair shake comes in the way of net metering, an essential piece of the solar conversation.
Net metering is essentially what the utility pays for the excess electricity generated by the rooftop system. It will largely determine the time it takes the homeowner or business to recoup the cost of the solar installation. Again, these laws, the rates paid and the cost of electricity vary from state to state, but net metering laws help to promote distributed solar. Currently, 41 states use net metering as a mechanism to compensate customer-sited distributed generation. Delaware has some of the strongest, most liberal net metering regulation in the country, and, according to grading by SolarReviews, it receives perfect marks across the evaluation criteria for its renewable energy policies.
Conversely, an article by the Brookings Institute illustrates how more restrictive policies in Nevada resulted in not only a 92% drop in permits to install, but three of the state’s largest providers of solar panels to exit the market.
While there is ongoing debate over how to best serve all stakeholders equitably, the vast majority agree that some form of compensation must be available to promote wide-scale solar installation.
For financial institutions, a diversified offering of loan products is vital as they attempt to not only survive but to thrive in these uncertain times. As trusted advisors, they should be helping customers and members understand the benefits associated with renewable energy sources like solar, both from a financial perspective and as a citizen of the planet.
There are numerous reasons consumers choose to be part of the solar movement: lucrative tax incentives, an assumption of lower overall energy bills, environmental concerns, and the desire to self-generate and become self-reliant. Regardless of the reasons, solar offers a long-term sustainable loan product that has benefits far beyond the income statement.
The data outlined above paints a bright, sunny picture for those willing to jump into the solar lending space. But, like any new product, institutions will have to evaluate how best to position solar as a loan offering in their portfolio. As with any loan product, there are risks that need to be assessed, and the pricing and structure of solar-specific loan packages will need to be set up in a way that meets the risk posture of the organization and fits with the long-term lending philosophy.
As previously mentioned, a residential rooftop solar installation now costs between $15,000 and $25,000, roughly the same as buying a new car. And while there are a variety of structures and loan types that can be used to offer solar financing – like in auto financing – an indirect financing channel has proven valuable.
Institutions like Mosiac, Dividend Financial, Digital Federal Credit Union and other lenders are choosing to partner with local solar installers in much the same way banks and credit unions receive auto loan applicants.
Denver-based Clean Energy Credit Union, a 100% online credit union, has partnered with local installer Amicus as well as one of the country’s largest solar distributors, Soligent, to provide residential installation and financing to its members.
Clean Energy Credit Union’s solar product is fairly straightforward. Solar customers can choose either a 12- or 18-month loan that covers the solar tax credit, a 12-, 15- or 20-year fixed rate loan on the remaining portion of the solar electric system cost, or a combination of the two. The loan is secured by the solar equipment that’s installed, has a fixed rate, has no prepayment, and loan amounts can range from $3,000 up to $90,000.
Obviously, using the indirect channel may not suit all institutions based on their business model. Many credit unions and banks are using existing products like personal loans, home equity loans or lines, or cash-out refinance. Each of these options has certain pros and cons. They can be secured or unsecured and have differing terms (rate, length, down payment) based on the prevailing economic conditions. Each should be explored to find the best option that fits the institution’s business model.
Regardless of financing methodology, state and federal tax incentives, along with state programs such as rebates and Renewal Energy Certificates, not only make rooftop solar installation loans an attractive addition to the product line but help to mitigate loan loss.
Years of environmental neglect has put the United States and other countries around the world in a position where alternative fuel sources are essential for long-term sustainability. The push for clean energy is being driven by public awareness and demands for immediate action that not only mandates but promotes the use of solar power. The volatility in price, the damaging effects and the dwindling supply of fossil fuels coupled with falling solar prices for installation and upkeep has spurred demand of alternative fuel sources with solar leading the charge.
A solar loan product is a win, win, win. It creates much-needed, sustainable interest income for banks and credit unions. It reduces the consumer’s reliance on fossil fuel, lowers the household cost of energy and, according to Zillow, increases the value of the home by over 4%. And solar is the cleanest, most abundant fuel source.
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