What is your view on how businesses have responded to COVID?
I think businesses tend to fall into two categories; either adaptive or stand still.
The adaptive business makes changes to their way of working and the product/service offered to attend to the current needs and demands. An excellent example of this is the automotive sector making ventilators for healthcare, restaurants delivering groceries instead of selling meals, and distillery companies making hand sanitiser.
The business that stands still has not taken action and is stuck in paralysis. Perhaps playing a waiting game and looking to the Government for updates to make a decision. A lot of businesses in the hospitality and retail sectors are caught in this situation. In some cases, the inaction might be due to not having resources, the expertise or a flexible mind-set and structure to be agile enough to adapt.
I am intrigued to see how many small, high street businesses in the food industry have adapted and continue operating to stay afloat while more well known, larger businesses in the same industry remain closed! It is clear it has to do with their response capacity.
What is now critical for all businesses is what they are currently doing or able to do to redesign and restructure their strategies to return to operational health and growth.
What issues do businesses in these categories currently face?
‘Adapting businesses’ that allocated all of their resources to focus on covering current demands might have limitations to work on a new long term strategy due to lack of capacity. Some businesses currently ‘standing still’ want to adapt and develop a new strategy but are struggling; they need support to determine the scale, pace, and depth of actions required.
Many businesses have suffered drastically for not having a financial structure able to cope with adversity. Worryingly, businesses only spend ~3% of their time and resources building capacity for future difficulties. Marketing budgets are now experiencing their biggest cuts and reductions since the crisis in 2009.
What impact has the crisis had on how people interact with businesses?
Sadly, COVID-19 has left deep scars socially and economically. A shock of this scale has had a strong impact on the preferences and expectations of individuals as citizens, employees and customers. Health and safety, customers experience, social empathy and purpose (operating beyond just making a profit) connects businesses with people and will be strong drivers for which businesses people choose to interact with moving forward.
Employees will demand and expect more flexibility and an improved work/life balance and customers will increase their expectations on speed, variety, prices, quality and customer experience from e-commerce channels (i.e. online shopping).
These shifts and winds of change are likely to get stronger. Their impact on how we live, work and use technology are emerging into something different, forcing companies to alter their business models and operations to be able to compete with innovative businesses.
What should businesses consider to shape their future and environment?
More than ever, companies need to evolve by thinking and acting differently, so they can grow and remain competitive. They need to:
- Reprioritise growth by reviewing business purpose and values. Work closely in collaboration with other business functions to integrate their strategies and accelerate recovery
- Foster a culture of trust to embrace engagement and performance. Leverage emotional intelligence, empathy and compassion to better serve customers, staff, and stakeholders. Not only for immediate needs but also to forge meaningful relationships
- Create, develop and implement digital and business transformation strategies and innovation. Focus on future customers and competitors which are relevant to current ones
What crisis management advice can you offer Finance leaders and managers?
They all play a crucial role in reassessing and adapting their function and environment for a speedy business recovery and long-term results. Finance leaders require creative thinking and a flexible mind-set to build financial resilience. They must review and strengthen financial and risk management strategies, maximise resources, and leverage opportunities without threatening quality.
Working closely as business partners with the strategic functions in the business. They should support and promote cross-functional integration and collaborative work; using external expertise where necessary. These are all fundamental actions required alongside a dynamic structure that allows the capacity to respond to future adversities.
What strategies would you recommend?
- Prioritise and realign short/long term goals, resources and actions with senior leadership. Focus on ecommerce and human and working capital to get through the turndown
- Develop flexible financial/commercial models for agile decision making and the capacity to change, adapt, assess opportunities and respond to adversities
- Prioritise investments (i.e. automation, innovation, M&A)
- Assess the cost of capital (loans, new investors, M&A)
- Review forecast/KPIs considering external factors (i.e. market trends, competitors, economy, fix impact)
- Review budgets (opportunity cost vs. cost cut), i.e. changing to a full-time remote working model to save on travel costs, building and utilities to reinvest in customer experience, ecommerce and digital strategies)
- Plan and add contingencies for adversities and unexpected events
How can finance and business leaders manage virtual teams effectively?
The drastic change from office to remote working without any preparation has created numerous challenges to personal and family life. Some people are struggling to focus on work while coping with revised day-to-day responsibilities.
It is meaningless though to have robust systems and strategies if the business does not have a strong team and the human capital to operate and implement them successfully. I would recommend that leaders:
- Embrace a humble leadership across functions and teams by offering a positive working environment. Emphasise their needs, priorities and foster a culture of trust, diversity, inclusion and meaningful relationships
- Build, develop and sustain resilient and culturally diverse teams with a strong peripheral and creative vision. Be open to develop new solutions and carry concepts and new approaches across geographies, industries and technologies
- Work with functional leaders, HR and external experts to rethink engagement and performance strategies. Design and implement digital solutions that can be connected and integrated with systems, KPI’s and employees benefits
This facilitates virtual engagement, performance management across functions and international borders, and also supports employees’ well being and work/life balance.
Can you share some of your experience of managing through a crisis?
Yes, I managed the finance operations for Coca Cola for the Olympics Games in London 2012, Rio 2016 and the FIFA World Cup in 2014 in Brazil. Four months before the Rio 2016 Games in Brazil, we came across various unexpected events, which put us in crisis mode.
Not unlike the current health crisis, we were hit with the Zika virus and potential cancellation of the Games. In addition, there was a political scandal with the Brazilian President impeachment, riots and a volatile exchange rate, which impacted budgets and forecasts dramatically.
Due to the FOREX impact from the political crisis, I had to review and adjust budgets dynamically and present financial results in multiple languages to VPs, Directors in Global Finance. Addionally, I reallocated resources to other strategic functions and renegotiated payments terms with customers and vendors to help minimise the impact.
Olympic Boulevard, Rio
The crisis meant I had to be flexible and wear different hats at various times. Getting up at 2 am to make transfers to pay for urgent extra security support (due to the riots) and increase credit card allowances to operational staff to be able to resolve issues.On several occasions, I traveled during the torch relay to meet with programme directors, production agencies and operations teams to have a better understanding of the events operations and helped as a brand ambassador.
What got you through the crisis?
Maintaining a resilient mindset and continually strengthening it. From previous experience managing Olympics and global events we knew there could be unexpected events beyond our control. It was always our priority to spend the time and resources building and reviewing our contingencies and risk management plans to have the capacity to react rapidly.
Having experienced, diverse and collaborative teams. Right from the planning phase, teams worked closely as business partners across the project and business functions. Allowing an understanding of operations and the development of the right mind-sett to identify risks, implement relevant processes and controls. All essential to drive results under adversity.
Being open, curious, empathetic, and culturally aware and getting involved in other roles. It was important for me to understand the operation to give me the right mind-set, approach and a broader vision to support teams, build and implement the right solutions and drive results.
Having in place a flexible, robust and compliant financial structure. Integrated reporting systems enabled dynamic scenarios analysis to support the decision-making, prioritise actions and be agile to overcome the crisis.
What are your final thoughts on crisis management?
Remain positive and confident; these turbulent times will pass, and we will evolve stronger as human beings and professionals. Remember that crises are opportunities to get out of the comfort zone.
Change hats to develop or ‘bring to light’ new skills and embrace new opportunities; grow as a result. Forge meaningful relationships and collaborative results by connecting with customers, employees, colleagues and stakeholders with empathy and emotional intelligence.
And finally, regardless of whether your business is currently in a stand still or adaptive phase, seek and get support to shape a new commercial strategy and robust financial environment, to drive a speedy recovery and sustainable long-term growth.