Lessons learnt from the Covid19 crisis…..so far
Two of the most difficult times in my career to date left me with scars, to be sure, but they also gave me a strength and a resolve that have served me well ever since.
The first was as a very young and inexperienced head of a small independent school in Kent, when NatWest bank rang me to ask how I was planning to pay this month’s salaries, as there wasn’t enough money in our account to do so. I discovered that our new bursar hadn’t been collecting the cash from parents for their children’s music lessons (we were well known as a music school, so this was a significant portion of our income) and had spent £250k on two huge heaters for our sports hall at a time of poor cashflow. For weeks I was unable to sleep properly.
But I made some good decisions. For the first time in my life, I realised that cash absolutely was king. I persuaded those parents who were able to do so to pay fees a year in advance and I offered them a discount to do so. Secondly, I took a 10% pay cut and invited the other highest earners to do the same. Thirdly, I was ruthless in keeping only the staff who gave greatest value and forced myself to part company with the others, following fair HR processes (before you ask).
The second was Christmas 2008 when the banks had crashed and Gordon Brown’s government was cutting funding to all new projects, to concentrate resources on saving industry, which by all accounts he did pretty well. So, The Key, which was a government funded service that was intended to be provided free of charge to every school in the country, was given three months’ notice to close down. This was despite demonstrating huge utility in the provision of trustworthy information, great popularity with school leaders and proving to be an enormous time saver.
The one thing I absolutely knew was that this was a great product and a great company. That’s all I needed to know to generate the actions and energy that followed. We went into intense negotiations with the government department to lease the brand, and started trading as a subscription service. We kept out best staff in a pretty horrible process of differentiating between great and slightly-less-great people; we reduced the business to its critical core and spent no money on anything else; and we took an enormous risk in forking out on an eye-catching publicity campaign which involved sending a ‘Hotel Chocolat’ box of chocolates to every school in the country. At the time, this took me to the edge of stomach ulcers, as I waited to see if it would pay off, or sink the nascent company. Looking back, it was an inspired stroke of genius. Isn’t it funny how time changes our perspective?
In McKinsey’s latest blog post, Beyond coronavirus: The path to the next normal, the writer states: ‘Leaders will need to reconsider which costs are truly fixed versus variable, as the shutting down of huge swaths of production sheds light on what is ultimately required versus nice to have.’
You’re telling me. When I’m up against it, something happens inside me. A fire comes to life. I focus in an almost manic way on what I need to achieve in order to make it through. It means that I can make huge decisions with a clarity and determination that might ordinarily be really difficult. In the school, I sacked the bursar straight away. I insisted that the chairmanship of our governor finance committee change to the person I had brought in for his financial brilliance, immediately. I changed a couple of key staff positions, to ensure we had the right people doing the right jobs, even though this was a bold (ie very risky) move. At The Key, we risked a considerable chunk of our income on chocolates….which saved us as a going concern. We reduced our staff. We narrowed our focus to our core product.
So, crises are horrible, they stress us, they cause pain, they leave us different. But they also force us to decide what is essential and what is not, who is essential and who is not, and to make those decisions in double quick time. I recently read that the civil service is currently doing things in four days that would ordinarily take two years. So, miracles can happen.
We’ll come out of this crisis exhausted maybe, relieved for sure, scarred most probably. But I put money on those organisations that come through the crisis being stronger, more agile, more focused. And that will be because leaders tightened their focus to what was essential.