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COMMUNITY UPDATE

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The global spread of COVID-19 has forced many businesses into crisis mode. How they respond over these first chaotic weeks will determine whether they survive. Pivoting to cash, flipping their organisational structure and thinking innovatively about staffing may all prove critical.

Julian Goldsmith, Senior Relationship Manager at Criticaleye, says now is the time for clear thinking. “At this time of crisis, understandably most senior executives will be heads down, dealing with the immediate problems.

“It’s important to find a way to give yourself space to think, reflect and plan how to bounce-back in the crucial recovery phase. Key to this will be drawing upon the learnings and experiences of others, including the non-execs on your Board and your wider network.”

Roger Bayly, Managing Director at Alvarez & Marsal, says that businesses should focus on their employees, set their continuity plans in motion and pivot to cash. “That means the budget is probably irrelevant. It’s time to enhance your forward-visibility of cashflow – a thirteen week, rolling cash forecast should be used as the basis for decision making in the short term.

“Take action quickly to reduce the cash burn rate – the more cash you can get around you earlier, the more options you have down the line,” he says.

Setting up a centrally co-ordinated command centre ensures the flow of information is prioritised and decision making is clear. Roger is working with a business that has adopted this structure and pulled out a member of its management team to oversee it.

He explains: “The latest supplier, customer and sales information comes into the command centre. There is a cashflow forecast being run on a weekly basis, with scenarios rolling off it – and that information platform is being used by the management team to make decisions and to keep the Board informed of what’s going on.”

While a command centre can get data moving, decisions will still need to be made with incomplete information. “One of the challenges for Boards and senior management teams is the desire for a fuller picture and better data – there isn’t going to be better data – it will change rapidly and we need to make decisions based on what we have at the time,” Roger confirms.

Catriona Schmolke, who is SVP for Operational Centres of Excellence at Jacobs and sits on their senior leadership team, agrees: “You are only going to get the data you have got, so we have focused very hard on pulling that in from all angles, up from the teams at the coal face and gathering intelligence.”

Jacobs are scenario planning by looking at the worst case and then considering what the upsides could be: “You need to look as far out as you can and then some more. You should draw on past experiences, but also bring in people who might think differently.

“When scenario planning, what you don’t need is people who say, ‘This is all going to get better’ – that will distract you from challenging each other. Bring in ‘glass-half-empty’ people,” she advises.

John Shelley, Independent NED at Standard Chartered China and a Criticaleye Board Mentor, says that the Board has a role to play at this point in ensuring the management team are anticipating what’s coming next

“Once you get into the command centre way of working then you need to think about what’s coming over the horizon that management may be too involved in the day-to-day to think about. As a Board, it’s the usual mixture of challenge, advise and support,” he says.

Maintaining this forward-looking perspective while firefighting isn’t easy. Dariusz Kucz, NED at PZ Cussons and a Criticaleye Board Mentor, says setting up and ringfencing dedicated groups can help. “You need to have a good crisis manager with their own team, and they need to report to the CEO and the execs. The CEO should not be the crisis manager.

“Parallel to that you need to establish a business recovery team. Those roles should not overlap, because they are working on different horizons. The first is managing the crisis and the second is managing business recovery including modelling different mid-to-long term scenarios, recommending changes to strategy and anticipating possible changes in the market,” he says.

Workforce continuity

Maintaining adequate staffing levels, particularly in key industries, while your people are becoming ill and self-isolating is a major challenge. Lorna Rose is Managing Director (Central) at Barchester Healthcare, which is having to think innovatively as it continues to provide vital care across its 240 homes and hospitals during the crisis.

"To make sure we have the right skills and staff numbers each day, we are using some tactical measures. That includes using bank staff, flexible working, extra shifts – and agency, if absolutely necessary,” Lorna says. “We are also asking our staff to become more generic workers: so, working in kitchens, laundry, housekeeping or care. We operate a ‘whole home approach’, so whatever your role, your job is to provide care.”

Workforce shortages means that businesses in the sector are having to recruit new people rapidly. “We are using technology: our care practitioner training is usually done over six months with lots of face-to-face – that’s now being completed with new modules and video linking,” she says. “Also, we have changed our training model – we can now induct new staff with online modules and by upskilling staff within the homes to support them as they come on board.”

But the scale of the pandemic means that Barchester’s thinking is extending beyond that. “Our HR director is talking to other HR directors, including a pub group, and looking at the opportunity for staff with transferable skills to come across, either temporarily or permanently, to take up roles such as chefs, kitchen staff, housekeeping, reception or maintenance. Some of our existing people within those roles could then move into care, as they are familiar with the environment. We are also talking to retailers about their staff with transferable skills,” she says.

The challenges across industry are massive and business leaders are having to adapt how they are responding on a daily basis. However, there are positives to take from how organisations are uniting around a common goal.

“Silos, egos and empires break down as people realise that they are better together in this. Everyone is working as one, and when we come out of this the business dynamics will be boosted,” Catriona says.

Emma Carroll, Senior Editor, Criticaleye

This article was based on Conference Calls including Benchmarking Responses to COVID-19