‘COVID-19 has ripped off the band-aid for the old way of working’ – BLM roundtable brings together leaders to discuss CV19 impact – Business Leader

Posted: June 1, 2020 at 6:42 am


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The business world may have changed forever because of COVID-19. But how are different sectors reacting and what do leaders think the future will look like?

To answer these searching questions, Business Leader brought together a high-calibre panel of business leaders.

The aim of the debate was to look at how business leaders are responding to the challenges presented by COVID-19.

The panel:

Dr Oliver Prill Tide Bank

Paul Beach Arbuthnot Latham

Asma Bashir Centuro Global

Johnny Palmer SXS Events

Paresh Modi Vodafone

Andrea Reynolds Swoop Funding

Gary Fletcher Gallagher

Jackie Fast entrepreneur and investor

John Stapleton entrepreneur and investor

Pat Lynes Sullivan and Stanley

The first question asked was, How is COVID-19 affecting your business and your clients?

Asma Bashir, who has run various businesses in her career, kicked off the debate by saying: We have several businesses in our portfolio and were able to react very quickly. As soon as the government announced we were going into lockdown, we were able to respond efficiently due to the technology infrastructure we had in place.

In regards to the shift to remote working, there was a high-level of excitement in the first couple of weeks, with working from home being a new experience and people feeling united with their families, but gradually it is starting to wear on people and the excitement has waned.

From an external perspective, the impact on our clients has been varied. For the start-up clients we deal with, they are being challenged by cashflow, their business runway in terms of funding and also how they navigate the various government schemes.

For our larger customers, we have had challenges with their expat population and people being stuck in other countries and weve been trying to support them with crisis management and getting them the advice and support they need.

On how Vodafone is responding, Paresh Modi, comments: We have 100,000 employees across the world and 95% are now working from home.

We have also seen a 50% increase in broadband traffic and, somehow, we have managed to keep the networks going by using our technology to push bandwidth levels at short notices through clarified structures. In our business we are having 40,000 virtual calls happening every day in our employee base. Keeping that up and running was a monumental task.

We have also been quick to support our customers, by shortening our payment terms to give them cashflow and also by setting up affordable business accounts and infrastructure for companies that may not be used to remote working.

Paul Beach has a large client base consisting of entrepreneurs and private businesses. On how they are being impacted, he said: Our private clients have been looking at how the wealth they have created is being impacted by the volatile nature of the global oil and equity markets. Its an uncertain time and naturally this client base is seeking advice and clarity.

For our entrepreneurial clients, it has been interesting to see how they have been innovating and pivoting during this time. For example, we work with a business called Seven Cherries an ethical catering firm who have moved into home deliveries across London.

Another business, Twipes, has also responded by moving their whole business online and into a B2C model, where they can deliver disposable wet wipes to UK households.

One sector that has certainly been impacted by COVID-19 is events. Johnny Palmer has looked to try and find opportunities though, as he has explained: Our industry (events) has been affected more than any other and it does not exist now. This made us look at our priorities which are our clients and employees and for the former we have been looking at how we can host their events virtually and also help them with advice around venue contracts and ticket prices.

In response to COVID-19 we have also developed our own education learning platform called Intelligo, and we have also launched a new online platform to host conferences. As a business, we are reacting where we can.

One of the biggest challenges for many businesses during COVID-19 has been accessing vital funding and navigating new government structures and systems.

To get an insight into the pressures this is putting leaders under, Dr Oliver Prill was asked to give his thoughts on the current funding context.

He said: At Tide, we have 150,000 SME business customers, which is one in 40 of all UK SMEs, so this allows us to see the whole spectrum and it is very tough for them now. The sad story is that the UK governments business response is well intentioned as from a Conservative Government this is unheard-of generosity but the execution has been found wanting, as large parts of the government machine are not working at the level that they are required to work.

This is in part because they have never had to work to this scale, but they too also have high rates of absenteeism which makes things difficult. We are trying to be supportive of government when representing our members but we also need to pick out these execution gaps.

The grants on offer only apply for one fifth of all SMEs because many small firms do not pay rates; and the loans have been an absolute disaster, as only 1% of SMEs have been able to access one.

Many companies are going to go into hibernation unless funding kicks in and investors will only inject funding if they see a light at the end of the tunnel and a coherent plan.

Andrea Reynolds sits on a fintech consortium which is talking to government about the challenges businesses are facing. On this subject, she said: We have seen a 1000% increase in customer demand and we are also seeing lots more mature and traditional businesses looking for funding, which we didnt see before COVID-19.

Businesses heard amazing things from the Chancellor, such as the 330bn fund, and if youre in business you assume it will be available to you, but the navigation has been very difficult. There is a huge disconnect between the announcement and reality and you have a situation where the lenders are inundated with demand and the business is stuck in the middle.

The system should be centralised so businesses can see who they can receive a loan from because now they going to their bank, being rejected, and not seeing the other lenders that are available.

The bandwidth for execution is not there and although government is moving at a faster pace than they ever have in their history, it is just not fast enough for business.

Individual investors, like large funders, are vitally important to the business eco-system and COVID-19 has naturally shaken portfolios.

To find out more, Jackie Fast, explained: I own a wine business and that is dead at the moment, but what you are seeing in this space is that Sommeliers and high-profile people within the drinks industry are building their own personal profiles with events like wine tasting and cocktail masterclasses.

They are building their profiles, rather than thinking only in a commercial sense.

What has surprised me is that in one of my companies a luxury handbag brand business is booming. It must be that people are sitting at home and happy to drop a large amount of money on a handbag, as they are not spending it elsewhere.

John Stapleton, who is also an active investor particularly in the food and drinks sector added this when talking about investor sentiment and how the sector is being impacted.

He said: There are positives and negatives from COVID-19, depending on the industry you operate in, what your route to market is and what stage of growth your business is at. In food and drink you have of course seen many companies diversifying and moving supply online where they can, as this is where there is now an opportunity.

I am also seeing an investment mismatch, where investors think valuations should be coming down given the challenges businesses face but business owners argue that this is just temporary and theyre saying come back to me later in the Summer as Im holding my valuation.

Going forward, I feel there will be a boom in investments once we begin to come out of this as there is pent-up deal flow and where businesses can demonstrate momentum they can attract investors and reasonable valuations.

Generally, the fundamentals of your business need to kick back in. Hold tight, conserve your cash, get in what you are owned and do not spend where you dont need to. Try to return to momentum and focus on making the second half of your year successful by preparing for the new normal. You need to turn uncertainty today into competitive advantage tomorrow.

The debate then moved onto remote working in more detail. To find out how organisations are responding to remote working, we spoke to Gary Fletcher.

He said: Our business is spread over seventy offices and prior to COVID-19, we didnt operate with many of our staff remote working. But we are robust as an organisation and we had a well-tested business continuity plan in place in the event of something like this happening. We did not expect to have to move our entire estate in one go but we did it; and the implementation has been very successful.

We are proud of what we have achieved, as we did not expect to have to do this on such a big scale. For our customers were also proud to be giving them business as usual service and investing throughout this period to support them. They are talking to us about cyber risk, unoccupied premises and other matters and we are working hard to be by their side.

Back to our people, the challenge has not been the move, but its been about how we communicate with them. This is important from a wellbeing perspective and keeping our culture going is our focus now.

Inspiring remote works is all about strong leadership. To find out how COVID-19 is changing the way we think about leadership, Pat Lynes gave his thoughts.

He said: Many businesses are hibernating, cutting costs to the bone and retreating but I think the ones which will come out stronger from this will do the opposite reset, reorganise and reinvent; and this comes down to strong leadership and a clear vision for the future.

This challenge has given us a free pass to assess how we operate as leaders and to rethink how we want our organisations to be. COVID-19 has sped up the future of work as it has ripped off the band-aid for the industrial world of work, moving away from hierarchy and control to a more servant style of leadership, based on trust, collaboration and empowerment.

Most executives and change experts Ive spoken to do not want to go back to death by business case, analysis paralysis and slow decision-making indicative of hierarchical structures. So, Im hoping to see less time and activity-based management to more inspiring leadership with a product and services-based outcome, which is focused on the delivery of value to customers and the bottom line.

The recent World Economic Forum at Davos predicted that the businesses who will thrive in this decade will be those that embrace change as a constant and bring learning back into their organisations.

Pat added: I believe that the leaders who put change at the heart of their agenda and capability will be the organisations that succeed.

The debate then looked at mergers and acquisition activity and whether this will increase going forward, as stronger companies look to acquire weaker ones.

Paul Beach said: I think that could increase in the future but, initially, the concerns are around funding companies and investors. The number of deals has fallen very low in the last few weeks and possibly as low as 2014 numbers.

Some deals are still going ahead though and there is some positivity out there. Investors are taking longer to go through the deals though and there is less money involved and lots of deals are going into follow on deals.

Asma Bashir added: I relate it to 2008 and the recession back then. We were approached to be acquired and, because of the challenging conditions, I considered it, but I stood my ground and we waited it out. Rather than focus on activity in the UK, we pivoted into new markets and became a global business. This decision in 2008 changed the landscape of our business and we became a large company off the back of it.

I would say if you can survive without being bought, Id hang on and look at how you can enter new markets and how you can innovate. If you can get through this, it transforms you as a leader and it can inspire people. Difficult times are the real test that can show your resilience as a leader.

Overall, M&A activity is there but if a company is just looking at this as a way to resolve cash flow, there may be other things they can do to solve this issue.

John Stapleton also said: Being an entrepreneur is all about taking advantage of tough situations. It is not just about being prepared, its about being more prepared than the other guy and thats about developing a competitive advantage.

I remember the 1990 recession well, as we had set up New Convent Garden just before. We were scared at what might happen to our early-stage business, but our sales rose during the economic downturn. In recession, consumer behaviour shows that people trade up and they trade down simultaneously. They trade down from going out, but they eat in much more, so our sales of New Convent Garden Soup rocketed. And they traded up to consumption of premium products in the home consumers dont want to eat staples all of the time. Were undoubtedly heading into a recession following this first Covid wave. Those who understand their consumer base and have an insight to how their behaviour will likely change post Covid, will be ahead of the game of survival come the recession.

The debate concluded by talking about how leaders themselves can stay mentally resilient during this period. When asked how he keeps himself motivated during this time, Johnny Palmer said: The first thing I did was launch a campaign called Boss Take it First. In the early days of this crisis, when people were not behaving well and putting their own shareholders and dividends ahead of their staff, I felt that leaders needed to be practically and visibly taking the first hit. The boss needs to get paid less and the boss net worth needs to get hit first.

This is about strong leadership and a statement to your staff. You also need to work on your mental and physical fitness as a leader, to make sure you can look after everybody else.

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'COVID-19 has ripped off the band-aid for the old way of working' - BLM roundtable brings together leaders to discuss CV19 impact - Business Leader

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June 1st, 2020 at 6:42 am