From riots to Covid: recovery and resilience for firms after crisis
Friday 6 August 2021 marks the 10-year anniversary of the London Riots which led to five deaths and destroyed properties and businesses across England.
It was estimated that over 2,000 mostly small independent businesses were affected and that the four days of rioting cost the UK £200-500 million in damages, lost trade and policing.
In autumn 2011, Dr Rachel Doern, now Senior Lecturer in Entrepreneurship at Goldsmiths, interviewed small business owners in London about the impact of the riots. She interviewed them again in 2013 to understand how they were recovering.
Her current research uses diaries and interviews to study how business owners across different sectors are coping with the impacts of the Covid-19 crisis.
We caught up with Dr Doern to discuss the differences and similarities between how individuals and communities handled two very different types of crisis in the short and longer term, and what small businesses can learn from both events.
Sarah Cox: What happened on 6 August 2011?
Rachel Doern: The fatal shooting by police of Mark Duggan on 4 August sparked a chain of events that culminated in to one of the largest riots the UK has ever seen, affecting 22 of the 32 boroughs in London while spreading to other English cities.
The riots followed what began as a peaceful protest outside the main police station on Tottenham High Road on 6 August, where a small crowd assembled demanding to speak to a senior police officer about the shooting. Unrest grew over the course of the evening. With the help of social media, riots spread quickly to other boroughs, fuelled by grievances such as police stop and search practices, urban regeneration, unemployment and austerity cuts.
The police were not prepared for the intensity and pace of destruction – in some boroughs there were seven or eight riot officers and crowds of 200-300 rioters. Desperate business owners who called the police over break-ins to premises were turned away, told police resources were “stretched”, little could be done, and to enter premises “at their own risk”.
In London, 10,000 extra officers were deployed on 9 August, which along with pleas made by the father of a young man who was killed, put an end to the riots. Some 3,000 people were arrested following reports, CCTV footage and DNA samples taken from the blood of broken glass, and charged with burglary and public order act offenses, robbery, assault on police, possession of offensive weapons, and handling of stolen goods.
SC: What impact did this have on individuals and businesses?
RD: There were casualties, people left homeless, and there were five deaths – one man was beaten and died from injuries, another was shot, and three died when struck by a vehicle while protecting local businesses in Birmingham. Small businesses were burned down, some suffered from water damage directed at putting out fires, and the vast majority were looted or vandalised – windows smashed, metal grills and doors broken, fittings and fixtures destroyed, merchandise and stock cleared out or destroyed.
SC: How did communities and local government respond in the immediate aftermath to support those businesses?
RD: We saw a lot of pro-social behaviours following the riots in the form of community members cleaning up the streets and providing practical, emotional, or financial support to businesses affected. There was a show of support from the public, other local businesses and, in some cases, councils. Several business owners explained to me that this support had been critical to them carrying on. One emphasised that, “Although the riots might have been the catalyst to stopping me altogether and I did think, should I or shouldn’t I? … A lot of encouragement from local people and that sort of thing” kept him going.
On seeing the destruction, many business owners thought their days of trading were over. Others told me they thought the riots while devastating brought needed attention to small businesses who regularly struggle with stiff competition and resource limitations.
Crisis-intervention and support from councils varied across London, so business recovery depended in part on the borough. Councils were involved in clearing roads and pavements. Some sent letters of support to the businesses affected. Some went further to cancel or reduce business rates from a quarter up to a year, provide loans or grants, and council representatives visited affected businesses once or more frequently. Views on responses from local government ranged from “hopeless” to “wonderful”. Some funds were drawn on or put in to place to help affected businesses, including the Riot Damages Act, compensation to be paid by the police to those businesses that suffer damages during riots. The High Street Support Scheme could be applied for through the council and there was also a High Street Fund, set up by the private sector as a charity offering cash grants.
SC: When you returned to interview small business owners two years later, what did you find?
RD: Many businesses were nowhere near being back to normal. Most were struggling to recover what they had lost. Many contracted in size, with some moving to smaller premises. In most cases, businesses were operating at lower capacity. They were down 25-40%, running with fewer departments, product/service lines and stock, with lower sales as a result. Several complained they lost customers who turned to other businesses while they were closed; some initially over fears of further violence in the area.
Some were still waiting for compensation. The bureaucratic and lengthy compensation process, including difficulties with insurers and underinsurance, made recovery from the riots difficult. Business owners were disillusioned with the government and payments from the police fund, the Riot Damages Act, which was complicated by the need to make very detailed loss reports in terms of contents, properties and lost trade. One business owner said that neither the loss adjusters from the insurance company nor the police fund were “interested” and it had taken a toll on his mental health.
Those who felt that business had been improved following the riots were in the minority. Nevertheless, all reported having learned something from the riots, about their own relationship to the business, their staff, their councils/MPs and the broader community.
While initially most business owners were very angry with police for the way they handled the riots, two years on their views had softened somewhat and were of a more understanding nature. By that time, some had spoken to local officers, many of whom reported being fearful themselves during the riots and some of whom apologised for the lack of action. Additionally, most business owners told me they had received letters from the police documenting who had been arrested for the damages done to their businesses.
(London Road, Croydon on 9 August 2011)
SC: Could this signal what comes next for those affected by the pandemic?
RD: In a word, yes. Not all businesses will survive a crisis. For those that do, it can take years to recoup losses, settle into a new routine or realise a new business identity. For the majority of businesses today, the full effects of the pandemic have yet to be felt.
At present in the UK, the majority of restrictions previously imposed due to the pandemic have lifted but many businesses remain quiet (for example, in the arts, entertainment and leisure). Shop trade is slower than anticipated. Even some in hospitality continue to suffer due to staffing shortages and concerns over capacity and preserving quality/safety. People are understandably cautious and the implications of this for businesses are great. Business closures, from small ventures to large chains, will likely continue for the foreseeable future.
Businesses today might benefit from looking to those with previous experiences of major crisis events such as the riots, and factor this critical learning into their thinking around recovery. Also, while business recovery often focuses on activities or operations required to bring a business back to normal or return to stability, the riots have taught us that this definition tends to miss what transpires at the individual and community levels, both in terms of the actions needed to recover and the consequences of such for those involved.
SC: What are some of the factors required for small business recovery from a crisis?
RD: For the riot victims I spoke to, business recovery depended in large part on several factors including the extent of damages businesses suffered, the business strategies they adopted to adjust – their nature, pace and degree of adaptation – prior crisis experience of business owners, resource seeking behaviour, whether the business owner engaged in constructive thinking and emotion regulation, and, also, the presence of protective factors at the individual level, certain characteristics of the business owner such as determination, perseverance and responsiveness to others/to support; factors at the organisational level such as the ability of business teams to step up and improvise, flexible organisational structures; and community level factors including the support of family and friends, local customers/businesses/grassroots groups, and access to community/institutional resources – for example, rent and business rate relief, funding.
The point being in part that business recovery following a major crisis event like the riots or pandemic, whether it is feasible at all, or how it unfolds – its nature and pace – rests on a constellation of factors. More recently, the pandemic has reminded us that you can run a really successful business but that depending on the nature of the crisis, your business offer or the sector you operate in, your reserves (limited for many small businesses), support of landlords, the community and government response, the business may or may not survive.
SC: How do the events of 2011 compare to the current crisis for small businesses?
RD: The riots represent a very different kind of crisis event to the pandemic – a relatively localised one-off, human-induced, conflict-oriented crisis, in contrast to an evolving health and economic crisis on a global scale. They are also comparable in a lot of ways.
In both cases there was little advance warning of the crisis and high levels of uncertainty that followed. For many businesses, the riots or the pandemic represented the first crisis of its kind that they had been affected by. The riots were more sudden and short-lived than the pandemic, but in both cases business owners had little time to put new initiatives into place or to decide whether or not to close. Early in the pandemic business owners complained that direction from the government was lacking. For many, business closure was mandated. In some cases, the decision to close was regarded as more realistic than operating at unsustainable levels and/or at risk of damaging a business’s reputation overall. With the riots, business closure was largely dependent on the extent of the damages.
The consequences of both crises for owner-managers, their teams and businesses was significant: for many, there was a marked increase in the demands on time and workloads, and both had a profound impact on mental health. With both crises there was a need to balance crisis management activities – such as crisis planning, crisis communications, furloughing or laying off staff and chasing up compensation and/or funding – with more general business activities such as customer care, managing stock and marketing. In both cases, crises led to the loss of staff, operating capacity, sales and profits.
SC: Can you tell us more about the similarities or parallels?
RD: In both cases businesses often had to scale down and quickly adapt their products or services or try new things, new forms of delivery – this was even more pronounced in the pandemic. In both cases businesses had to engage more with staff, customers and local communities, enhance marketing and promotions to keep customers interested and businesses afloat, and provide reassurance to stakeholders generally.
In the immediate period after the riots and the pandemic’s initial lockdown, the emphasis in both cases was on minimising and absorbing losses, defending businesses against further risks. In the case of the riots this involved boarding up and closing businesses, laying off staff and deferring payments where possible. In the case of the pandemic, it involved furloughing staff, cutting wages, clearing stock and debt, deferring VAT payments, paying off or stopping payments to creditors such as suppliers and landlords, and/or closing. In both cases the emphasis was often on acting quickly to trade again as soon as possible. Businesses were also conserving and building up resources – e.g., seeking out compensation or funding.
In both crises there were safety concerns but of a different variety – fear following the riots of further rioting, and with the pandemic, concerns over the health of staff and customers, and businesses closed or implemented hygiene practices and social distancing as a result.
Other similarities include but are not limited to – identifying and researching opportunities to expand businesses (albeit the minority), local or industry-wide business collaborations, promotions to bring customers back, concerns over lost customers and staff, appeals to local/national government (due to the scale of the pandemic, this manifested in more organised lobbying by certain industry groups), the arrangement of local and national responses, although there was more reliance on the former during the riots and the latter in the pandemic. In both cases, while the Government had made provisions for business support, not everyone was eligible, which caused considerable anger and frustration.
SC: How have you found business owners are coping psychologically?
RD: Crisis management research hasn’t always paid due consideration to the impact of crises on mental health and wellbeing, but the personal and emotional costs can be profound. The identities of business owners can be intimately wrapped up in the identities of their businesses. New and onerous demands in conjunction with feelings of uncertainty, resource limitations and concerns around business continuity and viability can take a toll.
After the riots, business owners reported a decline in their mental health – they reported experiencing intense negative emotions (grief, anger, frustration, fear), a loss of sleep, energy, and sense of security. Some referred to poor health generally. Several business owners told me how they had cried upon seeing the destruction to their businesses. Some experienced what they described as a state of mourning; they struggled to find their sense of humour through it all due to the exhaustion. In 2013, one shop owner told me he felt he had “lost two years of his life” due to the stress, longer working hours, and not being able to take a holiday. Others added that they had spent less time with their families as a result.
Negative emotions were also particularly high following the first pandemic lockdown. Emotions became heightened again when plans for reopening or launching new products and services grew closer, when restrictions lessened, new or complex restrictions were introduced, or the likelihood of receiving support or clarity from the Government diminished. Dealing with staff wellbeing was a significant concern for many, particularly staff members who were young, living away from family and isolated, or those with caring responsibilities, and this occupied much time. It led business owners to check on teams more frequently, especially in the first few months as they rearranged the business offer, reverted to new forms of communications and furloughed staff.
The riots have shown that the workload created due to a crisis can be enormous, can be more than double that of more stable times, and that this, along with the failure of some institutions to provide adequate support, can lead some business owners to become more detached from their businesses over time, even if other owners become more passionate and attached to their businesses as a result of additional engagement during/after a crisis.
SC: What can other business owners learn from those affected by the riots and pandemic?
RD: In both cases we’ve learned how quickly human beings, businesses and communities can adjust to adversity. At the same time, a crisis can be personally painful, enduring and take its toll. So what keeps some people going? What can business owners do? My research suggests in addition to outside support and other factors, they may benefit from emotion regulation, constructive thinking and prioritising mental health in or following a crisis.
Emotion regulation involves adapting emotions, bringing them back to a baseline so they are neither too positive nor too negative. In a crisis, it allows one to cope more effectively, to respond to demands in a timely fashion. Constructive thinking is kind of positive self-talk. In a crisis it can facilitate problem solving and drive situational responses. For many business owners, constructive thinking involved reflecting on the ways they’d been fortunate in comparison to others (thinking about businesses that burned down or closed permanently), focusing on what was important and had been saved rather than lost, and seeing the good to come out of the crisis – such as certain stakeholders including staff stepping up to help, rediscovering their values, re-focusing priorities, and creating opportunities to change the way they work or the kind of work they undertake.
Finally, prioritising one’s mental health in a crisis is paramount. When, for example, in both crises business owners felt emotionally drained, a few reported taking time to step back and reflect on whether they were attending enough to self-care and what they could do differently. Taking breaks and varying their routines were also important. Having this kind of self-awareness is critical.
Thinking about the future, one business owner told me: “I am nervous about the medium-long term toll something like the crisis we are going through could take on me. I don’t think I have done enough to look after myself particularly in the last few weeks. In the same way that I am turning my attention to longer term strategy with the business now that the storm of the crisis has passed, I probably need to start doing the same with myself and take a longer term view to my wellbeing."
(Image 1, CC BY-SA 2.0 Andy Armstrong, Image 2, CC BY-SA 2.0 George Rex)