Joe Fuller: Eastern Bank is emerging from one of the most eventful periods in its 200-year history. When the coronavirus pandemic hit, the Massachusetts community bank shifted to remote work, while helping its customers weather the associated downturn. Eastern serves many minority-owned businesses and communities of color, which have been particularly hard hit by Covid. In the midst of these challenges, Eastern Bank also became a public company as part of a growth and modernization strategy. How will that strategy and the bank’s corporate philanthropy help the communities it serves in the post Covid recovery and beyond?

Welcome to the Managing the Future of Work podcast from Harvard Business School. I’m your host, Harvard Business School professor and visiting fellow at the American Enterprise Institute, Joe Fuller. I’m joined today by Eastern Bank Chair and CEO, Bob Rivers. In addition to steering Eastern through a period of rapid technological change and industry consolidation, Bob has championed a wide range of causes. Those include racial and gender equity, LGBTQ rights, and early childhood education. He has also significantly diversified the bank’s leadership, including its board of directors. We’ll talk about the post Covid recovery, fostering entrepreneurship, workforce development, and how fintech can help community banks. We’ll also talk about the appropriate role of corporations in addressing social problems. Welcome to the Managing the Future of Work podcast, Bob.

Bob Rivers: Well, thank you. It’s great to be with you.

Fuller: Bob, we’re really pleased to have you here because, as the CEO of Eastern Bank, you’re looking at issues of the workforce and employment through multiple lenses—as a lender, as an executive, and as a prominent figure in corporate philanthropy in Massachusetts. Many of our audience from outside the Boston New England area will not have heard of Eastern. Could you just give us a little background on the bank and how you find yourself running it?

Rivers: Sure. Eastern Bank is a $17 billion bank in assets, headquartered in Boston—an institution that just celebrated our 203rd anniversary in business. The first 202 and a half of those was as what came to be America’s oldest and largest mutual bank. And then we switched to a public company just six months ago. We’re largely a commercial bank. We service clients throughout Eastern Massachusetts, Southern coastal New Hampshire, and Rhode Island.

Fuller: Could you talk a little bit about how the bank has managed through Covid as an employer? What have the impacts been on your staff and your customers? And how are you thinking about this next phase?

Rivers: We saw this as clearly a responsibility, as well as an opportunity, to really step in and support the many constituencies that we have in terms of our customers, our community partners, as well as our employees in a number of different ways. Because of our substantial philanthropic resources, we were able to lean in in ways that others didn’t or couldn’t. And for us, as a very mission-focused company, this was really a matter of point of pride for our colleagues here at Eastern to really step up and do this. One of the examples of that is the Paycheck Protection Program—the small-business loan program that the SBA, or the Small Business Administration, launched in the early days of the pandemic last year really as the primary lifeline to businesses to get to the other side—service businesses, in particular, whose revenues have largely disappeared as they were shut down or as customers access to them were limited. So again, that’s one of the many things we did for our customers, in addition to hundreds of loan modifications, fee waivers, and other forms of financial assistance to those customers. To our community partners, we’ve always been one of the largest philanthropic givers in Massachusetts for many years. And over the past year, we have provided an additional $15 million in grants around various issues related to the pandemic, over and above our normal giving, which was also substantial. And then for our employees, we’ve had incredible flexibility. We certainly didn’t have any layoffs and provided a great deal of flexibility for people who weren’t able to work for one reason or another related to the pandemic. We have 1,900 employees here at the company, and we have very much a bifurcated workforce, in the sense that 40 percent of our team are our retail folks. They’re in our branches, they’re in our insurance offices, they’re staffing other critical areas. They’ve been onsite and working throughout the pandemic and have really enabled us to keep our doors open and to continue to service our customers and communities. So that’s really been our frontline. And then the other 60 percent have been working remotely from home—something that we were not equipped to do before the pandemic really in any way, shape, or form, and now do pretty fully. And so now we’re embracing the fact that we’ve functioned very well in that particular state of remote work and thinking about how do we adopt this model without snapping back to the way we used to do things before.

Fuller: Let’s unpack that a little bit. Let’s go back to the payroll protection support and the type of impact Covid had on communities, on small business. What lessons did you take out of that? And in retrospect, how do you feel about the way those programs were constructed? Did they have the type of impact that they were designed to? Or could we have done a better job?

Rivers: I think in all things, those programs could have been better. We all could have been better. Certainly in the moment of the pandemic—it came on fairly suddenly, shocking in its impact and its duration. It was often confusing in the early days of the program because of the requirements you needed to meet and the capabilities businesses have. Generally, smaller businesses were left behind and weren’t focused on as intentionally as they should have been. That has become much better in later rounds of the program. And if I look at our applications that we’re processing now, one of the great things about our whole PPP experience in 2021 versus last year in 2020, is in 2020 at the beginning of the pandemic and the program, it was very chaotic, and funds were being depleted quickly. It was really a gold rush in who could get in first in line. And that was really the requirement, is if you had your application ready to go, you got funding. This time around, because the money is much more focused to small businesses, it hasn’t run out as quickly, and it’s given us an opportunity to be much more proactive, not only with clients that weren’t able to get their applications in, but also with other businesses that aren’t clients of Eastern, and reaching out to them to support them through the process.

Fuller: What have you learned about how you were going about managing processes or configuring work that you’re going to take forward and change permanently based on this kind of crucible that Covid proved for so many employers?

Rivers: Well, speaking for the 60 percent who are remote and working from home here, their experience is the one that has changed the most. Prior to the pandemic, Eastern’s culture was very much an in-person, onsite kind of culture. We had really very little flexible work arrangements. There was essentially no work-from-home policy. We’ve done a complete 180 here, where, because of the experience we’ve had, we completely embrace and see the benefits of having flexible work policies and actually being more remote than onsite in the future, which is my expectation. We use Zoom and Microsoft Teams as ways to engage people online in meetings. Again, these were not tools that we had used previously. When we held a meeting, everyone came into the same room, and maybe if you couldn’t make it, you dialed in on the phone. So now we’re all in front of each other on the screen. And that has been a very, very positive thing in a number of different ways, not the least of which is the degree of engagement and in the democratization, if you will, in participation in those meetings. We run, for example, company-wide town hall meetings for all employees on a monthly basis. So now I do these from my office, with other members of the management team participating from their office, and everyone else participating from where they are, all on the same platform, in the same way. And our participation and attendance have never been higher. We used to run these town hall meetings for an hour, and the content would run for 45 minutes, and the Q&A only 15, because we didn’t get a lot of questions. Today, they run easily for 90 minutes. The program’s never more than 30, and the Q&A is an hour. And, again, we have a very engaged workforce in a very positive way. We have worked as effectively, if not much better, in this particular state than we did before. Now, there are certainly benefits to people coming onsite, whether they be new employees, an ability to build relationships, and continuation or perpetuation of the culture that way. So we’ll bring people onsite in certain ways for certain specific reasons. But our whole mindset has shifted as we think about what the future looks like, really challenging our managers to think about, so why would they need to bring anyone back to the office?

Fuller: Let’s turn to the third thing you mentioned and talk about your response to Covid, which was enhanced your grant-making to philanthropic institutions. Eastern, within this community, has a reputation for being an outsized presence in supporting causes related to diversity, equity, inclusion, and being a very active and visible player in the community. What did you learn about the needs of the community through the lens of Covid? And where were you deploying those extra $15 million? What were you trying to accomplish with that?

Rivers: We support over 1,500 nonprofits every year and have done that for a while. So it’s always been a very broad-based giving. But this was a way to double down on some of those issues. As I think back to the early days of the pandemic, there were so many issues, in terms of supporting community health centers that were overrun with volume. How do we provide them resources to support that relief? We were mindful of the mental health issues and the stress involved. Certainly, our initiative around early childcare became more important than ever, as really most of the daycare system here in Massachusetts was completely shut down, and the public schools were fully online. So, many parents could no longer, including our own employees, get to work because they had care responsibilities at home. So, really reaching out and addressing those issues. Other things related to the disparities that have been all around us for hundreds of years that were just laid bare by the pandemic, with respect to race and gender, and really trying to figure out, how do we support organizations that are addressing that work, particularly as it became more acute following the murder of George Floyd in May of 2020. It continues up to present day. We’re just about to announce our latest round of giving another package of over $2 million—it’s really built around equitable access to the vaccine—with organizations that are increasing their resources to provide greater outreach and access. So really that’s how it’s been over time is just continuing to listen to the community about where the needs are greatest and then responding accordingly.

Fuller: It’s going to take a while for companies and members of the population to understand what the long-term effects of everything that’s happened in the country in the last couple of years. Let’s start with the diversity-inclusion issue, the emergence of Black Lives Matter as a strong voice in our communities. As an employer, how are you thinking about that? How are you thinking about your policies and programs—whether it’s in recruiting, hiring, training, upskilling—as a response? A lot of employers we’re talking to are very keen to do something, genuinely believe that it’s a time for them to step up. But they’re not too certain what to do, other than maybe broaden the aperture on their hiring. How are you thinking about it?

Rivers: We have a long history of work addressing racial and gender disparities, also disparities experienced by the LGBTQ+ community. So we’ve been focused on those for a long time and in a number of different areas, certainly in terms of hiring and advancement, supplier diversity, or procurement in our spending, and making sure that less-represented vendors have access to contracts. But what we’ve done in this moment is really become much more intentional. I think, to some degree, we haven’t been as intentional as we need to be, particularly in the senior ranks of our organizations. Our board is very diverse and is represented by more than 50 percent people of color and/or women and/or members of the LGBTQ+ community. Same thing with our management committee, which is over 40 percent of those groups combined. And that’s our senior-most people in the company. But when we start to get through the layers of that overall grouping and look at, so what is the representation among the Black community, the Latinx communities, the representation among women of color, and really start to break this down and be more intentional about what we’re measuring, we found a lot of areas that we haven’t done as well as we’d like to. We do a great job at attracting talent, and we’ve hired what you would call “diverse candidates,” if you will, really well over a third to usually in the 40 percent range of our new hires consistently every month, something we track and monitor. But we haven’t been as intentional about making sure that those employees advance to the senior ranks, and that our recruitment in the senior ranks has been intentional in that regard, and we know we needed to do better. When we looked at our supplier diversity efforts, again, we’ve had a focus on that. But has it been intentional enough? And then, when it comes to our grant-making, even though our grants certainly are directed toward communities of color, gender equity issues, and so forth, have we been as intentional in making sure that we’re supporting nonprofit organizations led by underrepresented groups? Again, diversity, equity, and inclusion, in my mind, the pursuit of it is, ultimately, a more robust collective mindset to address more-challenging problems in increasingly changing times. Ethnicity, race, sexual orientation, gender—all of these things are markers for our different experience, and they’re important. I think we have a pretty good idea of what we need to be doing. Now we just have to execute it better.

Fuller: Bob, as we sort through the long-term financial impacts of Covid—particularly on small and medium-sized businesses—how are we going to think differently about providing banking services and, particularly, credit to those institutions? You’ve been a leader at Eastern in using so-called “fintech advanced technology” to automate small business lending. Is Covid going to accelerate that? Is it going to change that? How are you thinking about your go-to market strategy, post-Covid?

Rivers: Well, certainly our go-to market strategy is becoming increasingly digital, because it’s just more convenient for our customers. But so much of our engagement is really based on relationship and one to one. And it’s really those physical engagements that really help us develop the relationship to figure out where we can best provide resources or direct people to resources. So having the experience of using tools like Zoom and others really is an advantage—not something we had in our toolkit, by and large, but is now increasingly in our toolkit to make it more convenient for us to reach those who are very busy. And obviously, the greater Boston area is very difficult to get around in normal times, certainly, because of the traffic. Our approach will remain the same, even though the use of these tools will be greater: to provide access and greater convenience. As we think about how Covid shapes the small-business sector, it really remains to be seen. We’ve had increasing concentration within the business community across the country toward larger businesses, as opposed to smaller businesses. Ultimately, that’s not healthy, and certainly not good for our business, but fundamentally not healthy for the economy, because so many of those small businesses, those Main Street businesses, really provide the essence of the quality of life in a community, the essence of the community, itself. And as we look at the wake of Covid and the economic carnage that’s really been rendered out there—those are some of the things we really worry about, particularly as coming back to work is slower. Those are the businesses that are really going to suffer. I look out my window here in the financial district in Boston, and every day looks like a Sunday. There’s one business that closed at the pandemic, which has never reopened. And there’s another business right next door that kept open, that was very popular here, and their volume is a trickle. It’s not a volume that’s coming back quickly. So even though vaccinations rise, and we all get more comfortable to resume our lives as normally as we can, I think for many of these Main Street businesses, the bridge to the other side is still very long.

Fuller: You alluded to new businesses—business formation—and one of the most troubling trends in the United States up until 2020 was, we were seeing actually net business deaths, and specifically in some regions of the country, that there were fewer and fewer enterprises. Do you see the type of surge that’s occurred recently as just a temporary Covid phenomenon? And what’s going to have to happen to keep dynamism, in terms of business formation, going forward on a business-as-normal basis?

Rivers: Well, certainly the reasons for concentration are really built all around resources and efficiency and the power of scale. We see it in our own industry, in the banking industry. There’s been a long consolidation. I think the surge in formations that we’re seeing now are really just a function of so many people displaced from what they were doing before, trying something new, not necessarily because they see an opportunity in this moment—maybe more geared out of necessity or because they’ve been unhooked from what they were doing before, a desire to try something new and give it a go. It’s very, very difficult, when you think of what small businesses need to go through to raise capital and really to have the, if you will, the technical or administrative infrastructure to support their businesses and sustain their businesses. It’s a very, very difficult road. We deal with entrepreneurs all the time, and certainly they’re characterized by many of the same things. And fundamentally, it’s they have an interest in an area, they have an expertise in an area, it’s built around the product that they’re providing. But too often, they don’t have the capital resources to invest in—whether it be technology or HR or some of the financial systems that you need, really, to not only scale your company, but also put you in a position to obtain financing, because you just don’t have the robust reporting systems nor the robust financial condition and performance to support it. So I’d like to think it would be sustained, but I do think it’s going to require a lot of support in different ways that have been provided to this point, particularly around businesses of color. Businesses of color on average are only 20 percent of those of white-led businesses, if you will. So they’re the smallest of the small. They’re the most resource challenged and fragile. And when a downturn hits, they’re the first to be negatively impacted. And in order for us to address that and really keep some of the cultural vibrancy of many of our communities here in greater Boston and throughout the country, there just needs to be much more capital supports outside the banking system, more of an equity investment, forgivable loan structure, subject to certain conditions around experience and so forth. But, nonetheless, many of these businesses, in order for them to really get a good start, we’re going to need to do more.

Fuller: Bob, one of the topics we’re interested in in the project here—Managing the Future of Work—is this topic of automation and how automation is going to change the nature of work and the degree to which people anticipate work being either reconfigured or workers being displaced by automation. Fintech—financial technology—is a very, very dynamic sector. Eastern has been a leader in deploying certain automated tools to address markets. How are you thinking about the evolution of technology? What are the types of impact you think it’s going to have on your workforce?

Rivers: Well, certainly in our industry, for sure, automation over decades has impacted the nature of our workforce, starting with the ATM. There’s less transactions in branches. Therefore, there are a lot less tellers in the business than there were when I first came into it four decades ago. In some ways, the opportunity I had as a college student to work in the business part time is less available by a lot than it used to [be] before. It’s resulted in fewer employees. But those that remain are much more skilled. So in our own offices, we, of course, still process teller transactions for customers that want to come in and do them. But there isn’t enough volume to justify many people dedicated solely to doing only that. So, therefore, they do other things, such as opening up new accounts—something that was always separated in the days when I first came into the industry. So the jobs are fewer, but they’re better paid. They require a higher skill set. And that’s always the way in any implementation of automation that you see, anywhere. Overall, I think that that is a necessary thing and an inevitable thing. And so I think the key for us, as an industry, and the key for us in the business community is to really just make sure that we’re investing in the training for those who do get displaced to be able to access those jobs that require greater skills so that they are not only employed but have access to jobs that have closer to family-sustaining wages than they would have had before if they had stayed in that prior position.

Fuller: Well, certainly re-skilling and upskilling is a topic that’s very much more on people’s agenda today than it has been, although if you think about our classic skills infrastructure—which is, primarily in the United States, rooted in the education system—it’s not particularly well configured to support mid-career learning or working learners, particularly if they already have families, children, and other responsibilities outside of going to school. One last question, Bob. In the recent past, Eastern went public, became a public company, having been a mutual company for a long time before that. Does that change how you think about your role in the community and the kind of legacy of Eastern? How does your responsibilities to your shareholders influence your thinking about your work in the community, where you want to grow the business, and your very significant commitment to support local philanthropies?

Rivers: Thankfully, the reception that we’ve had from the investor community is that people are very attracted to Eastern because of what we do in terms of community engagement. They like it from the standpoint of not only the enhancement of the brand, but they also know that it drives business. And it certainly does. They tend to work hand in hand. So I think that, certainly, people have recognized it is an integral part of this company, what makes us different from others. That’s, again, good for business. We went public, really, to be able to continue to scale and better meet the needs of our customers and compete and allow us to continue to be relevant. One of the sayings we have around here is “No margin, no mission”—which means that if we don’t have earnings, then we can’t fund our charitable activities, we won’t have the capacity to engage in volunteerism and in advocacy in a way that we’re able to do that today. So being larger, being more sustaining, allows us to do those activities to a much greater degree than before. And, of course, through our initial public offering, we took 4 percent of the proceeds—of what was initially a $90 million contribution that, with the performance of the stock, has doubled to about $180 million—into the foundation. So it took our foundation—that previously, before we went public, was $120 million—to one that today is in excess of $300 million. Those philanthropic resources are really the fuel that allows us to engage in a very meaningful way—and now, as a public company, in a much more meaningful way than we were able to do before.

Fuller: Bob, one of the recent initiatives Eastern has been associated with is the Massachusetts Business Coalition for Early Childhood Education. What is that, and why is it relevant for a company like Eastern to be doing things like that?

Rivers: The Massachusetts Business Coalition for Early Childhood Education was really born first and foremost out of a sharper focus of our community engagement activities around issues of economic inclusion and mobility. So our grant-making through our foundation, particularly for our larger grants, is increasingly focused on four pillars. The first one we engaged with was around entrepreneurship, particularly focused on scaling Black and brown businesses. We also have in our mind’s eye workforce development and affordable housing for the future. But the second real pillar that we’ve engaged in was really around early-childhood education. All the things that we engage in really come from the perspective as a business, as an employer. It has to have that link so it has relevancy to us and our team, and we can be a greater influencer within the business community to have others come along with us. Early-childhood education is a natural fit for the business community. It’s a matter of not only the future workforce, but it’s also a matter of the current workforce. The degree of interest has been much higher within the midst of the pandemic. Again, it’s one of those silver linings of Covid. Our job of assembling what is today 77 companies—representing over 225,000 Massachusetts employees—on this issue was much greater in the pandemic, as employers weren’t able to get their employees back to work, whether it be physically onsite or certainly at home, given the fact that care facilities were closed, schools were closed, and employees needed to be home with their children to take care of. So the fragility and the importance of the early-childcare system as a matter of the current workforce came much more into the fore in this moment. And again, it’s born out of this mission focus that we have here around having an impact around issues where we’re hoping to have businesses also lean in with us, because it’s a principle of not only the right thing to do, but the smart thing to do. It’s a moral imperative, but it’s also a business imperative.

Fuller: Well, Bob Rivers, Chair and CEO of Eastern Bank, one of Massachusetts’ leading financial institutions, it’s been a pleasure to have you on our podcast.

Rivers: Great. Well, thanks so much, Joe. It’s been a pleasure talking with you.

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