Businesses in the UK, and across the world, are facing unprecedented challenges in order to survive and thrive in the wake of COVID-19.
Scaling businesses are facing an additional and unique set of challenges, as many will be in the ‘critical growth’ phase which is often loss-making – embarking on a stage of expansion in order to achieve future revenue growth. This makes the current climate daunting to approach.
To help scaling businesses successfully navigate these challenging times, Mark Sanders Executive Chairman of Scale Space shares his seven top tips on how to pivot, adjust and innovate now.
Mark’s insight comes from over 20 years’ experience in navigating and overcoming adversity in business, having led start-up TDX Group through the last recession. Mark oversaw the recovery plan and eventual sale in 2014 to Equifax for £200m with a headcount of over 400 and offices in three continents.
- Maintain perspective and consider all your key stakeholders
It is very easy to focus on the survival of the firm and that leads to a focus on the financials and inward-looking decisions. Try to maintain perspective and consider impacts and opportunities with all key stakeholders – especially Customers and Employees – as well as the business and its shareholders. There must be a focus on the safety and wellbeing of employees and keeping them informed during the crisis but making time to think about and engage with customers is important too.
With companies largely working from home you don’t get to see people you’d usually see during the day. Working is not just about the 9-to-5, it’s also about talking to people and some people will be missing social interactions – whether employees, customers or suppliers.
Investing in effective people management now will save on avoidable recruitment costs down the line. Leaders of companies should be making sure that they are considering their employees’ welfare above all else.
- Become nimble at budgeting
It is crucial for scaling companies to adjust quickly to an agile approach to budgeting and forecasting to support rapid decision making. What firms might have thought a week ago or even two days ago could be completely different, so companies need to be budgeting rapidly whilst still retaining enough accuracy. Making decisions quickly and understanding the financial position of the company is critical in these times.
Firms should consider invoking an 80:20 methodology as reforecasts need to be delivered faster to keep it relevant. Achieving 80% accuracy in 20% of the time might be acceptable as long as the output is caveated accordingly. It is absolutely essential, in a rapidly evolving situation, to have up-to-date forecasts.
- Take advantage of Government measures to support cash flow
Arrangements on PAYE or VAT payments are helpful and should support short term cash flow. Companies should try to the extent possible to offer furlough arrangements or arrange reductions in working hours or salaries in preference to redundancies. This could be a beneficial arrangement for both parties and it is very possible that colleagues have different childcare requirements now the schools are closed.
Secondly, make sure that you contact your suppliers and customers. Keep those conversations up, so you can plan what your cash flow in and out is going to be, and build up that trust with people in these extraordinary times.
In terms of other overheads, beyond rates relief there may be items that you’re not using, for example travel insurance, hotel bookings and club memberships. Go through your supplier list and add them up, there will be a lot of small savings which together will soon add up. Credit cards bills are a great one to scrutinise, as quite often you’ll find subscriptions on cards of five to twenty pounds that you no longer need.
- Keep innovating
Companies need to look to future proof, as there is undoubtedly going to be a massive shock from COVID-19 down the line. The economy is going to take a long time to recover and companies need to make sure they give themselves the best opportunity to survive throughout that.
Take time to analyse your customers and suppliers and work out which industries are going to be impacted, then reach out and make sure that you’ve got a good two-way conversation. Ask, are they going to be able to make payments? Is there a supply chain effect? Can you help them?
There are some brilliant examples of companies pivoting and innovating from being B2B focused to B2C and branching out in different directions to diversity their offer and importantly, their ability to trade and unlock new markets. Some may even choose to alter their business and may even choose not to revert back to their original model.
- Embrace your entrepreneurial mindset
Scaling businesses have an unusual challenge in that they will typically be loss-making because they are in embarking on a stage of growth in order to achieve richer revenue. They most likely will have committed to a lot of spend because they are scaling. For example, a 12 month contract they now no longer need, spend on advertising, or maybe they were planning to open an overseas office which cannot be pursued due to travel restrictions.
So, for a typical scaling business the threat is going to be more significant than an established business. These companies need to be ahead of the curve on their planning and exploration, because it will impact them more in the absence of having cash reserves than a mature established market participant may have.
On the flipside however, a scaling company will also be entrepreneurial in nature so they’ll have people in the business who can pivot and switch. They have a growth mindset which is willing to do things differently and able to make changes in the company quickly because that’s what they’ve been gearing up for. Now is the opportunity to repurpose that agility.
It’s going be rough for the next weeks or months, but out of this great opportunities will come. There will be whole new markets that never existed before and a number of companies will come out of it stronger and with greater market share.
- Get closer to your colleagues to boost productivity
Make sure that you’re taking the time to ask people if they’re okay. Typically, we take that for granted, but when you’re apart make sure in every conversation that you ask at the beginning or at the end or both. And, not just a throwaway comment of ‘are you okay?’ Create a space where people genuinely feel able to say how they’re feeling and making sure that they know that you are compassionate in the way that you’re asking.
You have a duty of care to the employee but there should also be an element of friendship and comradery – it’s not difficult to get in touch with people each day. Also, checking in to make sure a task isn’t taking longer than it should. If you’re sitting opposite someone you get a sense if something is taking the whole day and then telling them, ‘this is not that important it should only take half an hour. If it’s taking more than half an hour, then let’s stop and have a conversation about it’. I’m finding now I need to be more conscious of articulating time with my team to avoid that misalignment, and ensure we stay on track and adjust well to working at pace from home.
- Stay positive
Speaking personally, it’s about staying connected with your colleagues. One of the things that we’ve done in my team is regular informal catch ups. A Monday morning coffee, Wednesday is a bit of a show and tell and of course a Friday beer. Hopefully there’s something there for everyone. At the moment things are dominated by the virus, but we do get together and the interaction is good for everyone. It makes me feel happier being able to speak to those people more than just about business.
Make sure you’re taking the opportunity to exercise, eat well and embrace opportunities to upskill and challenge your team in new ways to keep their minds fresh. You need to consciously assign the time in the working day to exercise and get fresh air. Encourage your colleagues to do so also – you could even make it fun and competitive by tracking steps.
Mark Sanders, Executive Chairman of Scale Space said: “Whilst there are number of challenges over the coming weeks and months, there will also be opportunities and whoever can respond to this will do well. Businesses should try and see the opportunities rather just the threat because every business is in the same position. This is an existential threat that we are dealing with here, and there will be unique opportunities for businesses that are ready to take advantage of to aid recovery. Looking after your business, your people and your customers and being open to new possibilities will set you up for success.”
Mark Sanders is Executive Chairman of Scale Space.