The coronavirus means managers must make strategic financial decisions and support their teams in an uncertain environment. David Mahé, founder of HR consultancy Human & Work, shares his thoughts on an eventful couple of weeks. In his opinion, the mobilization of employees and time devoted to customers will prove to be crucial if the consultancy is to emerge from this crisis relatively unscathed.
Leaders League. What was your very first step in reacting to this extraordinary situation?
David Mahé. Our first step was to set up a crisis unit around a tight team of five people (HRD, director of operations, two general managers and myself), a sort of coronavirus command center. We meet every day at noon through videoconference. Then, I made sure that all of my partners – shareholders and associates – were well informed of the situation at hand and that they supported us. We have adopted three priorities: preserving the health of employees, guaranteeing operational activity and investing to successfully end the crisis. We have identified a certain number of projects to invest in, primarily that of cash management, which is vital for the survival of SMEs, commerce, operations and HR.
How have your customers reacted?
We swiftly moved to informed them of the continuation of our service, which reassured them. The second step was to explain the transformation of our business to them. This lockdown is creating anxiety and stress, but it is also a moment of innovation and incredible resolve, it is no time to feel sorry for oneself. We keep them informed about our ability to manage current contracts.
Have you contacted your bank to obtain assurances?
It was not my first reflex. I first focused on mobilizing the teams and my partners. We have multiplied our moments of interaction so as to share information. We have also taken the time to arbitrate between unnecessary short-term investments and those that are potentially structuring for the future.
How did you explain the situation to your teams?
We have communicated to all of our employees, in a videoconference, our priorities in this time of crisis. The issue of cash management is an important subject for any business: salespeople must be vigilant about payment terms. Then, we postponed and removed a certain number of investments planned for the second quarter, investments in communication and events for example. It was decided to postpone certain measures that required physical travel and meetings.
Did your company allow people to work from home before the crisis?
Yes, but it was mainly used for internal work and was limited to two to four days per month per employee. It now covers all working days. We have tried to develop it for a number of functions in which it was not routine practice up until now. We are transforming travel and meetings into useful moments for the company. In the field of training, we are accelerating the deployment of webinars to our customers, increasing distance outreach initiatives, expanding the use of videoconferencing, etc. We are now implementing on a large scale what we used to implement on a small scale.
What do you think of the measures taken by the French government to help companies in difficulty?
There are those that are necessary, directly related to the public-health situation, such as sick leave to care for one's children. There are also economic measures in support of cash flow, such as the postponement of social security contributions. We have chosen not to rush, we are willing to listen and take note of what is proposed. We need to understand what impact the crisis will have and then find the right tools to manage it. Regarding furloughing, we preferred to wait for the rules of the game to become clear and focus our energy on organizing our work and meeting the needs of our customers and those of our teams.
What about state-guaranteed loans?
It is a very good measure. It shows the government's commitment to get us out of the crisis. It will take several weeks for bankers and businesses to fully understand how these loans work. In principle, the idea of helping businesses get through a difficult stage is excellent, but the state is not Santa Claus, whether we are talking about the agreement of part-time work or loan guarantees. These are serious crisis-management tools which should be oriented towards helping companies capable of generating capital and honoring their liabilities.
What is your strategy, in a nutshell?
Rather than looking for state subsidies, we defined a policy and implemented actions from the get-go. They consist of measures linked to the crisis and those relating to the company's strategy on a long-term perspective. It is our teams, customers and partners that will allow us to survive in the long run. The mobilization of our employees is very important, we must take better care of them during this period. We are faced with unusual experiences and operational difficulties that may cause concern about the future. Empathy, transparency and communication are essential. Investing in teams is a key element in getting out of the crisis.
What are the possible scenarios for the coming weeks?
Different hypotheses have been considered. The first, which we believe is the most likely, is a kind of two-month break from which we would eventually resume our activities by mid-May. We then have to work to reschedule and reorganize all of our operations. It will be a tough year, undoubtedly we will enter recession, but we will move on. If the lockdown is still in place by the end of the summer, then I fear for the consequences. It will be a disaster that will affect the entire French and European economy. In the worst-case scenario, we have analyzed our means to see out this period and the levers that can be implemented. Two stand out: State guaranteed loans and fundraising. We have strong support from our partners, customers and bankers.
Is it really possible to raise funds in the face of this crisis?
Finance often follows sheep-like behavior and it does not like uncertainty. This period makes deals more complicated. However, the fundamentals are not bad. There is money available and projects to finance. As an entrepreneur, I stay focused on my goals, including geographic expansion and acquisitions. Our ambition: to create a European champion out of people at work. We address topics that have a considerable resonance in France, Spain and Italy. Obviously, 2020 will be a year of significant recession, but our projects meet current needs.
Do you think this crisis will lead to closer ties between companies?
Yes, clearly. Some companies will discover an ability to be durable while others will find themselves financially in a weak position. This compels leaders to think about partnerships. For our part, we wish to take the opportunity to reflect at length on our long-term investments.
What do you think companies will learn from this situation?
First of all, they will learn about the widespread use of remote working. It is a very different situation having employees operating remotely only two days a month than when you actually have them operating remotely 22 days a month. Then, there is the use of technologies to further develop collaboration. These practices have improved significantly during this crisis. We will probably no longer need to assemble as much as before in order to be effective. This does not however change our inclination to gather. I will also put a strong emphasis on mobilization: social distancing has been compensated by a much stronger bond and collaboration from a distance. I am pleasantly surprised to see the capacity of teams to innovate and produce in a different context. When you have made common cause on something like this, it leaves a lasting memory and creates a deep commitment. Lastly, the pandemic has forced people to see what really is necessary and vital and those things that are, in reality, disposable.