In addition to our weekly discussion forums, we have hosted forums focussing on Family businesses, Charities and for Female leaders together with several specific events with speakers including;
- Iain Mackay – Group CFO of GSK Plc
- Will Dowson – Agent for Scotland at The Bank of England
- Chris Skinner – Partner and Head of UK Debt & Capital Advisory at Deloitte
- Andrew Wilson – Co-Founder & Partner, Charlotte Street Partners
- Tracy Black – Director Scotland, CBI
In the next week we will host;
- David Cruickshank – former Global Chair of Deloitte
- Graham Rusling – Sandton Capital Partners, Executive Chairman of the Institute for Turnaround and former Global Head of Restructuring and Recoveries for Barclays Corporate Banking
FWB Park Brown have been hosting a number of industry specific and functional leadership forums, focused on sharing issues and learnings from Covid-19 and what it means for both the current and future business landscapes.
Whilst the themes and challenges vary between each forum, there are common threads throughout.
A full list of upcoming forums can be viewed at the end of this article.
The following summary has been generated from our recent forums for Chair / NXD, CEO, CFO, and COO each of which were held under Chatham House Rules:
Finance & Support
Access to cash [liquidity] and management of cashflow remains the number one focus for businesses. As they continue to work through the open ended nature of the crisis, ensuring business continuity and security is of paramount importance.
Businesses continue to experience issues of access and express frustration with regards to Government support schemes.
The requirements around audit ‘going concern’ are likely to look very different for those companies who have not yet filed accounts and into the future, with likely tightening of audit criteria around credit ratings and cash flow amongst others.
Economy and the difficulty of forecasting remains a constant theme. What will the market look like in 6-12 months? Companies are desperate for as much insight as possible.
It is likely that the Job Retention Scheme, recently extended, is simply postponing mass redundancies. The future economic impact and fall out from this is concerning.
Business Operations and returning to Work
For many large scale organisations, planning for return to work is now a key area of focus.
Many businesses feel that they will not be able to return to full operational capability until well into 2021.
In one example, a large scale manufacturing business is planning for only 20% of the workforce is to be allowed in the building at any one time for the foreseeable future. Each shift is separated by an hour to enable deep cleaning between shifts.
Many organisations have now announced that they will enforce or actively encourage home working for non-essential staff until security can be ensured, such as if a vaccine is found. This will not only minimise the risk to employees, but allow a consolidation of property and estates.
Businesses continue to look for ways to manage employee wellbeing through enforced holidays, downtime and breaks during the day, shared workload planning and employee engagement tools.
Regarding communication with employees, this tends to be more formally planned than previously, and a concerted effort is being made to engage with and speak to staff on a regular basis. As a consequence of this, communication now happens with more certainty (and more regularly) than if it were still left largely to chance, as it may have been in some organisations pre-Covid.
Supply chain disruption continues to be a key theme. The foodservice sector provided example where entire channels have been lost, from coffee supply to recycling. In general, restaurants and cafes not opening back up again is having a huge impact on that stream of revenue for some manufacturers and many are turning to the online/home deliver consumer market as a consequence.
ecommerce and online marketing leadership talent is going to be particularly important as businesses experience this transition which in some cases has been rapid; 10 years’ worth of change in 8 weeks.
The import and export market is getting ready to return more fully to work but there were several instances where businesses were experiencing difficulty in moving products in and out of the country.
The transportation sector is focusing on how to achieve a safe environment for travellers, as well as how to get synchronisation across the UK and European regulation regimes to allow more free travel as the lockdown is lifted.
The FMCG sector are considering the change in consumer demand and how this will affect both their marketing and their production. The sector is also considering how to achieve profitable production and capacity from manufacturing sites with social distancing measures in place. 80% capacity was the maximum number achieved and this is of course greatly affecting productivity and in turn cashflow.
It was mentioned that in Scotland 70% of manufacturing companies are currently operational. Another 16% are planning to start again before the end of May. This contrasts with 87% in England.
The best manufacturing efficiency level reported currently was 86%. Many manufacturing businesses rely on a business model that can achieve 100-104% efficiency to meet profitability. Safety measures are necessary but eat into productivity and consequently profitability. Continued social distancing is a reality and businesses are considering how to achieve profitability in this environment.
There is wide concern that skills will be hit as companies reign in training budgets and reduce apprenticeships. Companies are expecting to make redundancies and it is certain that the job market will not be able to provide jobs for these people, hence we are expecting a significant rise in unemployment levels.
Strategy & Governance
For Boards, and in particular CFOs, forecast and scenario planning continues to be very difficult. This is due to uncertainties and multiple changing factors financially, politically and socially.
It was agreed that for those Boards who can see some sort of path through, even if that means businesses being of a far smaller scale or different shape, the current situation is driving significant innovation. Boards are also experiencing more entrepreneurialism as well as intrapreneurship.
Boards acknowledged that current and future employees would judge them on how they act in this crisis and that this could affect both recruitment and consumer/customer behaviours around brand and culture perceptions and reputations. Consumer brands reacting to social media pressure was mentioned several times.
The question was also raised as to the impact on “local” employment if companies can base certain roles entirely from home and therefore could recruit from anywhere. The rise of fully remote working was discussed, where employees never come to an office, and perhaps don’t work in the location, or even the same country, as the employing business.
Many Executives described the rapid increase in the variety of work they have had to become involved, gaining experience in business functions they would not have previously focused on. This could be of future benefit to businesses as their Executives become increasingly familiar with their functional counterparts.
The pandemic has enabled businesses to make tough (but often advantageous) business decisions they may have otherwise shied away from or put off as non-critical including property consolidation, business disposal, headcount rationalisation, digitalisation, changes to working practices and flexible working and many others. Various new sayings have risen to fashion, such as “from a digital perspective, society will advance ten years in ten months”.
Boards are preparing for multiple waves of the current pandemic and for social distancing to last long term. They are considering how to operate safely and productively whilst living with Covid-19. One positive is that investment in healthcare, wearable tech and apps now should make future outbreaks/pandemics much more manageable.
Government advice remains a huge frustration and the different approach between Scottish and UK Government is for many considered to be damaging. Scotland is felt to be running behind and at a major economic disadvantage the longer the differential remains.
Regarding Trade Unions there is a general view that their contribution so far hasn’t been as constructive as it will need to be. Campaigning for companies to close down operations is entirely understandable given the crisis but it has to be balanced by support to get these businesses back up and running otherwise the impact on their members will be all the more significant. Business leaders and Trade Unions should be acting in concert to ensure that all workers can (return to) work safely.
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FWB Park Brown
FWB Park Brown continues to deliver its full range of services which includes providing support and advice during the Covid- 19 Public Health and developing global economic crisis.
We have established a range of cross sector as well as sector focused discussion forums for Chairs, NEDs, CEOs and all the main business management disciplines. We are also working closely with the Scottish HR Leadership Group to provide constructive support including discussion forums and Q & As.
Summaries of the discussions will be posted on our news section and also on LinkedIn.
For further information about any of these forums please contact us via firstname.lastname@example.org