With ten or so assignments as interim manager, General Management specialising in turnarounds for SMEs and ETI subsidiary, I have built an approach based on ethics, teams, operational pragmatism and results. I add action on the various performance levers.
The question arises of the impact of the economic crisis linked to the COVID 19 pandemic on the approach of the Transition Manager in General Management specialising in turnarounds.
- Should his approach be changed?
- Is it necessary to reinforce the work axes described?
I propose to share the following point of view.
The economic crisis linked to the COVID 19 pandemic has 4 unique characteristics:
- Its brutality
: the economy was shut down overnight following the decisions to confine the country on 17 March 2020;
- Its acuity, with turnover losses of
up to 100% in non-food distribution, 80% in construction, not to mention other sectors just as badly affected;
- The unknown that companies
are facing in terms of employee safety.
- The difficulty of projecting oneself
into the future: in short, what will tomorrow be made of?
Faced with this situation, I am concentrating on 4 points:
OVER-COMMUNICATING WITH IRP, EMPLOYEES, CUSTOMERS, SHAREHOLDERS
RESPECT HEALTH AND SAFETY MEASURES
1. To safeguard the health and safety of employees in dialogue with
the different stakeholdersIn addition to the substantive legal obligations – to safeguard the health and safety of employees – I am making sure to strengthen dialogue during this period of uncertainty. Overcommunicating with IORPs, employees directly, within teams and between departments, with customers and shareholders helps to create a climate of confidence conducive to new decisions: cessation of activities due to exogenous factors, drawing up of the business continuation plan, resumption of production with strong and new constraints – social distancing, wearing of new PPE, traffic flows, etc. -, projection in scenarios which, in the event of a proven case of COVID 19 would force the closure of part of the company. I also communicate on the difficulty of defining the level of return of activities in the short and medium term. I ritualize this over-communication, including with customers, in order to build a story that will unite as soon as the company returns to “normal” activity. The more this dialogue is constructed, transparent and regular, the more forces will be mobilized to adapt to the new realities.
CASH IS KING
2. Focus on cash flowMany companies are facing weakened cash flow during this period . I’m ignoring strategic issues. I am strengthening cash flow protection measures. High fixed costs, undercapitalisation in many sectors, loan repayment charges in the case of recent investments, and the sensitivity of earnings to the slightest drop in turnover, even marginal, are customary or even structural elements for many companies. What can we say in the face of this crisis? The action that I am taking is strict: freezing all expenses other than PPE and adapting to the crisis, postponing deadlines in the dialogue with suppliers, systematically implementing all expense carryovers and all bank reimbursements, using all means to raise cash (introduction of short-time working, use of stocks, product substitution in agreement with customers, strengthening the internalisation of certain functions in the event of structural fixed expenses, monitoring of customer accounts, refinancing by shareholders, etc.). In addition, the French government has put in place tools to secure cash flow and avoid payment defaults (PGE): use all levers and never accept an unfavourable response: the mediator will play his role. A legal watch by and with your legal advisers, human resources accountants completes my information.
GIVE MEANING, FAVOUR COLLECTIVE DECISIONS, CREATE A POSITIVE DECISION-MAKING SPIRAL
3. I place the action within the company’s strategic framework. Decisions will be better understood as a result. Also, the more widely the decisions will be approved, the more effective they will be demonstrated. Using field teams complements the management perspective – you will always find in an XLS table a good reason not to decide – and reinforces the role played by these teams. The results are positive through the recognition given to the teams: ask them for proposals, challenge the arguments, confront the different points of view and bring the teams to the decisions by favouring the lowest common denominator – forget the adage that if there is no agreement on everything, there is no agreement on anything – but don’t give up and reschedule a meeting where the undecided points will be put back on the job. Better 5 out of 10 points validated in 1 hour than blockages on the whole because you wanted to get agreement on everything. The role of your teams is to be the relay in the field for this strategic vision. The increase in competence of these teams is one of the keys to the future success of the company you manage.
PREPARING FOR THE POST-CRISIS PERIOD, IMPLEMENTING PROJECTS, ACCELERATING CHANGE,
NO TABOO: OPERATE ALL THE LEVERS OF PERFORMANCE
4. Any crisis, it is said, conceals opportunities: the company was developing projects, implement them. The company anticipated changes in its business, accelerate their implementation and invest to take technological steps. The company was suffering from a rate of non-service to customers, improve the level of quality. The company suffered from non-productivity costs, initiate reforms. Your internal and external logistics have been weakened by the crisis, reorganize this department which is a source of direct cost improvement and better service to your customers.
I first address the customer relationship and your customer’s customer (in B2B2C). Be a business development facilitator for your customer, lighten your administrative constraints in your daily relations, list all the steps and delete half of them, digitize. Quality is the second point of strengthening customer relationships. Trace non-quality, quantify the impact, analyse with the field teams the causes, empower these teams and give them a hand for improvement decisions. Set objectives with them. And monitor improvements. The third point is productivity. There is no doubt that your operators are performing well and that they have the best production tools at their disposal. Complete your analysis and that of your employees with the time spent between the quotation and receipt of payment. Shorten the physical, administrative and informational circuits within your company and put the information that the customer needs at his disposal.
The COVID 19 epidemic raises many more questions – will we have a second wave? Are young people safe from a variant of the virus? Will this type of pandemic be like seasonal flu? – . Through dialogue within the company, transparency with IORPs, employees and customers, improving service to your different customer segments and increasing the skills of your teams, I am striving to make the company agile to adapt to the new realities.
FIT in NETWORK® is one of the leading networks for Transition Management and Timesharing in the fields of Management, Finance and Human Resources. It currently has more than 1 200 expert managers with a very significant track record. Among them Jean-Michel Piau, Operational Director, who mainly works on issues of transformation, development, turnaround, change management, complex situations and crisis management.