Our partners often work with businesses in a management support capacity or as a non-executive director (NED). The focus of such services is to look at the medium to long-term strategy of the business and hold the board members accountable for achieving these goals.
However, during the coronavirus a shift was made to focus on the short-term and survival. We caught up with our Partners, Richard Kleiner, Sonal Shah and Howard Woolf, to see how they have been supporting clients through the coronavirus and their advice for bouncing-back.
What were the key challenges faced by your clients during the height of the pandemic and how did you support them?
Some of the biggest challenges faced by businesses globally were accessing capital they needed to stay afloat, keeping their supply lines open, making sure their employees could work remotely, and balancing increased family demands.
A halt to revenue
Whilst all sectors have been impacted with reduced or little revenue coming in, the hospitality and leisure sectors have been hit hard with many having no choice but to shut down whilst COVID 19 prevailed. Support for these clients was focussed on getting access to the much-needed government support.. This included claims under the furlough scheme to cover employee wages and applications for funding from the banks under CBILS and Bounce-Back loans.
The prime objective for businesses during the pandemic was to maintain as much cash reserves as possible – cash is king. Therefore, we encouraged, by providing the necessary guidance and support:
- A line by line review of overheads
- Non-essential Direct Debits to be stopped
- Business insurance policies to be reviewed to identify any possible loss of earnings claims
- Rental commitments to be negotiated
- New payment plans to be agreed with suppliers
- Identifying key employees, furlough considerations and redundancies
During this initial ‘response’ phase, the importance of making the right decisions to protect the business and its employees was essential. We offered an objective view and very quickly became our clients’ invaluable confidant. Remaining optimistic and resilient through the process was key.
What lessons have you learnt through working with businesses during the pandemic?
The human side of business
One of the most crucial lessons learnt is the importance of the human side of business. Whilst we collectively focus on financial matters, emotional intelligence is becoming more and more significant. The way business leaders communicate with their team, suppliers and customers determines the strength of their relationships. Leaders face a pivotal moment in needing to engage with radical empathy, provide complete transparency as well as balancing consistency and equity. We found this has brought the team at GE together more than ever before.
The importance of personable communication
The pandemic has proved that business communications can continue effectively whilst working remotely from home. Zoom, Teams and other mobile apps have kept us connected.There’s been something unique in seeing clients in their own homes, more relaxed and natural. It has enhanced relationships and, in many respects, has enabled clients and advisors to be more open and talk freely, culminating in better advice.
Was there any difference between the advice you gave during the coronavirus to the support you normally deliver?
Protection and Short-Term Crisis Management
Initial advice during the early stages of the lockdown focused on protecting the business and its assets. Whether that’s cash, employees or sheltering the business against the inevitable contraction and loss of confidence.
Ordinarily, the focus is on growth and the opportunities for the next one to five years. During the lock-down, the advice concerned the next three months.
However, some advice did remain the same:
- Corporate governance. It is always critical to maintain discipline at Board level. Board members must support each other, take individual and collective responsibility, be accountable and contribute. These factors remain vital for the success of any business.
- Focus on the businesses most valuable assets. The greatest asset of any business is its people. For any business to survive and thrive, you need to identify the top talent and create the best environment for that talent to flourish. That also requires the directors/owners to show leadership – to communicate and be transparent.
- Marketing. Often, during a downturn, the first area to cut costs is marketing, but we at GE believe it is vital. To be out there, vocal, visible, when others hide, presents an opportunity. At GE we maintained visibility with our clients, making personal calls to each one, sending regular news updates and being present on social media. A marketing strategy undertaken throughout this period should allow those businesses to bounce-back quicker than their competitors.
Why do you think businesses need a NED?
The management support services that are provided to clients, whether through a NED role or indeed through a consultancy arrangement, are invaluable. It is often said that external NEDs who have no vested interest in the underlying business and who do not work for the business, have no “baggage”. Therefore, they can challenge the business and its senior management team to ensure that the win is for the business and not any individual or individuals.
A NED doesn’t run the organisation – it’s the client that runs their business. However, they can help to identify the strategic vision, assist in setting key performance indicators and setting protocols for monitoring these and encourage accountability at board level. Businesses can also benefit from a NED’s experience with other clients, or in the case of GE, they can benefit from the experiences of several partners.
Looking to the future, what advice would you give to businesses going forward?
Whilst businesses can plan for an emergency, COVID 19 really did catch every business off guard. We all found ourselves in unknown territory. Whilst no-one knows what the future holds – could there be a second wave? It is important to be ready for anything. Whilst it is important to devise a lockdown exit strategy, if businesses are able to model as many scenarios as possible, this will ensure a robust strategy for whatever comes next. In doing so, don’t lose sight of other risks your business may be exposed to.
Adopt alternative strategies
Once there is a return of confidence, which will only take place once there is greater visibility as to what the new normal will be, the focus will once again turn to growth. Companies that have bounced back strongly from previous recessions usually did not cut their marketing spend, and in many cases increased it. We’re seeing a lot of businesses that never had an online presence get online for the first time, and those businesses that had an online presence are making them their primary way of doing business. Finding new ways of doing business is crucial. Be adaptable.
Digital transformation, artificial intelligence and automation of processes is at the core of any business and as we navigated our way through this crisis most businesses saw the value in improving operations. Selectively modernising technology capabilities will put most businesses in good stead and what’s required to thrive in a world remade.
Embrace the new normal
Businesses should keep track of any lessons learnt and consider what they can do differently in the future. For example, regarding working practices – businesses should embrace the cultural and behavioural shifts that COVID 19 introduced. It is crucial to strengthen an organisations ability to monitor well-being at work and detect signs of fragility. Continuing in the spirit of transparency and empathy that developed during lockdown will be key.
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