19 March 2021|Crisis Management, Latest Posts, Psychology
By Mark Roy. The challenges of the last 12 months have stretched all of our abilities to the limit. Yet the founder’s role has been thrust front and centre as it is their hands that are firmly on the tiller in a time of crisis: colleagues know that you alone will determine every decision the business makes.
Business founders, almost without exception, have an innate ability to sort the wheat from the chaff. That skill, perhaps, might be why many of us came to be leading our businesses in the first place. As the founder of a company that in the last 12 months has bucked the trend of falling revenues and income, I’ve taken a look back at what other skills (in addition to ‘getting to the point’!) we have employed to make 2021 look like a boom year for us.
As a marketing services business, REaD Group has clients across every primary sector. As one might have expected in April 2020, many of our clients completely pulled the plug on their entire marketing activity. Tricky to say to an airline, a cruise line operator or the founder of a large restaurant chain that they should be doing otherwise and that they should be ‘pushing hard right now’. For many businesses, this was indeed an existential moment.
Conversely, we also work with many large financial institutions, insurance companies and online retailers who have thrived throughout. We were able to adapt and focus on growth areas and had the resilience to park those sectors that had had closure forced on them.
Understanding the pandemic’s real impact on our revenue line would determine where our overheads needed to be. Bearing in mind that some clients would be stopping altogether, we knew there was a big hit coming. We had to get our costs in line with revenues as quickly as possible. A quick shout out to the government here: the furlough scheme was genius. It allowed businesses to lower their most costly overhead, overnight and without the pain, cost or delay of terminations or redundancies. Without wishing to sound like my mother, we and millions of other businesses had to cut our cloth accordingly and to do it quickly.
We furloughed about one-third of our staff, with many very difficult and often emotional chats with team leaders. When my CEO and I addressed the business (virtually), we were at pains to be completely honest; this was not the time to sugar-coat anything. We had no idea what the next few months held for us, we had a new worst-case scenario forecast and had necessarily cut costs accordingly. We explained that we were focused on ensuring the business continued to operate as normally as possible and get them back to work as soon as we could. Like every business, we had done what needed to be done.
As we enter 2021, our monthly run rate is far exceeding our Q1 2020 rate, and 2021 looks like it will be our most successful ever, generating around £2m EBIT. I think we can safely say that what we did around the crisis worked, so how did we make it work?
Well, there’s no magic wand or silver bullet here. It’s more a combination of many things really, and top of my list would be:
Be brave: In uncertain times, your teams and your clients want the same things: certainty and confidence. We had the opportunity to buy a competitive business in May, right in the thick of the pandemic. The easy route was to say, are you kidding? The challenging route (the brave route) was to seize the opportunity. We bought the business in 10 days, have spent the last six months integrating the technology into our environment and are smarter, quicker and more capable as a result, not to mention seeing a 10x return on investment to date. But the broader message to our clients and our staff was that I, as the founder, was investing in the company and its future, building confidence, building certainty.
Be honest and open: again, to colleagues and clients. Your staff want to hear the approach you are taking is working. In our case, we were completely open that we were furloughing deeply, but because we had shared our approach of worst-case scenario forecasting, our staff understood and were in favour of the rationale. Our clients also understood why things were taking a bit longer than expected: we were honest with them, said we had furloughed about one-third of our teams, most of the time they said, ‘Oh well done, we have furloughed more!’. Once again, the broader messaging was building confidence around our behaviour: if we had a problem, we would tell them.
Caveat Emptor! Pandemic or no pandemic, the rules of business do not change. Inevitably some companies that have struggled to make ends meet or indeed survive have sought to generate cash in any way possible. As is the way in a crisis, once in a lifetime deals seem to appear magically! As ever, of course, you only get what you pay for. So, on numerous occasions where clients, and in particular agencies, have approached us and said, “Look, I could buy x at y price (from your competitor),” our response has always been, “Our price is Z”.
In the majority of cases, the buyer has returned to us. Why? The simple answer is because if a deal looks too good to be true, it probably is! And in a crisis, clients need to be sure about the decisions they are making. Our approach says to the client that we have great products and services, and if you want it, you need to pay the right price. Far from disappointing your client, this approach places your product in the top slot and fills the client with confidence that he is buying the best his budget will allow.
The truth is that, no matter whether it is a stock market crash, a global pandemic or a good old straight forward recession, what your staff and your clients wish for is business as usual. Sure you might have to adapt and do things a bit differently, but amid a global pandemic, the status quo would be an outcome most businesses would happily take, especially if that also translates into corresponding financial performance.
Crisis management has been talked about a lot over the last year, but ironically, what is needed is to get your head down and deliver that which made you successful in the first place. Don’t be tempted into changing course other than doing what is absolutely necessary. What makes you great in normal times will make you outstanding in abnormal times. If that opportunity comes up in the middle a crisis? Go for it: a great opportunity in normal times is most likely an exceptional opportunity in a crisis.
About the Author
Mark Roy is chairman and founder of marketing data and insight company REaD Group, which uses its unrivalled data products, insight and expertise to help its clients get closer to their customers, offering market-leading data quality and cleaning solutions and trusted marketing data. Mark launched REaD Group in 1991 and has since grown the company to become the UK’s largest independent data communications company. Over the course of his career, he has transformed the marketing industry by pioneering data suppression and data cleanliness, as well as introducing industry-defining products including The Gone Away Suppression File (GAS) in 1993 and The Bereavement Register (TBR) in 2000.